Maravi

African banks give Zimbabwe $428 mln credit lines

African banks give Zimbabwe $428 mln credit lines
Written by Nelson Banya
Friday, May 08, 2009 4:55:44 PM

HARARE (Reuters) - Zimbabwe has secured a further $428 million in credit lines from African banks as the unity government battles to rescue an economy ravaged by years of hyperinflation and contraction.

Finance Minister Tendai Biti said on Thursday the African Export-Import (Afrexim) Bank and the Eastern and Southern African Trade and Development (PTA) Bank had offered Zimbabwe $250 million and $178 million respectively to revive the key mining, agriculture and banking industries.

This takes African support for the unity government's efforts to rebuild Zimbabwe's battered economy above $800 million after trade bloc the Common Market for Eastern and Southern Africa (COMESA) as well as neighbours South Africa and Botswana offered $400 million in credit lines.

Biti said Afrexim Bank would also help Zimbabwe float a "diaspora bond" to try to raise funds from non-resident Zimbabweans and other investors. He did not say how much the bond would seek to raise.

The southern African country's new unity government, formed by rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai, has said it requires $8.3 billion to rebuild an economy shattered by years of hyper-inflation and contraction.

Although much of the funding is expected to come from sceptical Western donors who have demanded more reforms, Zimbabwean officials are looking to raise about $1 billion from the African continent.

Speaking to reporters after meetings with officials from Afrexim and PTA Bank, Biti noted his recent trips to Washington and London showed Western governments were still sceptical about the unity government.

"There are some Western colleagues who still have some bones to chew with us, and we understand. We welcome African institutions that want to help us," Biti said.

The International Monetary Fund (IMF) said on Wednesday its board had decided partially to lift the suspension of technical assistance to Zimbabwe and would provide help in targeted areas from May 4.

The IMF said in a statement it would help Zimbabwe with tax policy and administration, payments systems, banking supervision and central banking governance.

Former U.N. Secretary-General Kofi Annan and South African Nobel laureate Archbishop Desmond Tutu -- members of a group of leading figures known as The Elders -- said on Thursday the group had written to donor countries and the European Commission urging them to respond more swiftly on aid to help stabilise Zimbabwe.

"The inclusive government needs more support to ensure that it can initiate the urgent stabilisation and early recovery programmes that the people so desperately need," Tutu, chairman of The Elders, said in a statement.

"Now is not the time for donors to take a 'wait and see' approach. This is the best chance Zimbabweans have had for peace and prosperity in decades."

Labels: CREDIT FACILITIES, TENDAI BITI, ZIMBABWE

posted by MrK @ 3:57 PM