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Zimbabwe to Engage South Africa on Reviving Rhodesia-Era Credit Facility

Economist Rejoice Ngwenya commented that that while credit lines are needed to jump-start growth, drawing upon them will also worsen Zimbabwe's s external debt position

Having secured lines of credit totaling US$90 million from Botswana and the European Union, the Zimbabwean government is soon to open talks with South Africa in which it will seek the revival of a loan facility that existed between the two countries before Zimbabwean independence in 1980.

Sources said Finance Minister Tendai Biti will meet with South African officials in Pretoria within the next few days for final discussions on the credit line which is much needed to sustain economic recovery.

The sources said Biti will also ask South Africa to revive a R3.3 billion loan facility once tapped by the Rhodesian government in the days when South Africa was still white-minority ruled. That amount would be equivalent to some US$460 million. An estimated US$10 billion is needed for reconstruction.

Economic commentator Rejoice Ngwenya told reporter Gibbs Dube that although such credit lines are needed to jump-start growth, they will also worsen the country’s external debt position.