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Botswana Loan Entangled in Zimbabwe's Political Woes

Zimbabwe has failed to gurantee a $64 million line of credit signed with Botswana a month ago as the loan scheme for reviving distressed industries has been entangled in the country’s political problems.

Some treasury officials told VOA Studio 7 the Ministry of Finance is being blocked by the Zanu PF arm of the government from writing a credit guarantee letter to the Botswana government fearing that Gaborone is trying to tie the loan to democratic reforms.

The officials said it should have taken treasury a few days to write the letter but indications are that President Robert Mugabe’s party is reneging on the deal signed by the two governments.

Botswana indicated that it will only release the funds when Zimbabwe provides credit guarantees.

Finance Minister Tendai Biti and Botswana authorities were not immediately available for comment.

Walter Mbongolwane, economist and director of business consultancy firm, The Expert Factor, said Zimbabwe should have written the credit guarantee letter on the day of signing the loan agreement.

Under the credit facility, 70 percent of teh funds will be utilized for reviving the manufacturing sector. Other targeted sectors are tourism, information and communication technology and steel and leather industries.
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