News / National
China to give Mugabe massive $10bn part loan lifeline
12 Aug 2014 at 08:55hrs | Views
HEIDELBERG - China has once again come to the political and economic rescue of President Robert Mugabe's bewildered government, by agreeing to disburse part of a massive $10b credit loan facility, to help Harare pull out of mounting economic recession, The Telescope News reported.
The economic lifeline is a culmination of negotiations between China Exim Bank , the Chinese government and the country's finance ministry following, a begging bowl trip made by finance minister Patrick Chinamasa, last month, where Zimbabwe all but put the nation's mineral wealth security under threat, owing to the opaque nature of the new bailout, which critics fear will leave the Asian economic powerhouse, with an iron grip on precious minerals such as gold, diamonds, platinum and uranium as Harare battles for collateral cover for the credit line.
After Chinamasa initially came back home empty-handed, it has now taken Mugabe himself to make a State visit to China, where we gather he shall leave in smiles due to the confirmed bailout loan, to be granted in phases as opposed to a lump sum.
Intelligence information shows that Mugabe made a personal call to Chinese leader, Xi Jinping, last month to convince him to approve the much needed loan, citing the dire economic situation which the country was degenerating into.
"A Head of State cannot just leave the country, to visit another country for fun," high level government informants said this week. "His Excellency (President Mugabe), who now speaks basic Chinese, telephoned with his counterpart last month, who was convinced that it was necessary to give out the loan facility, for strategic political reasons, because Zimbabwe is now a special ally of China on the continent. Zimbabwe also had the good fortune, of Xi Jinping having already formed political chemistry with Mugabe when he was still deputy president. They might appear as if they are not that close, due to international media scrutiny, but believe me leaders across the world have ways and means, in which they communicate."
Mugabe's Chinese visit it would appear, has been precipitated by Central Intelligence Organisation (CIO) warnings about the unhealthy state of the economy, which if not urgently addressed could ignite political mayhem and pandemonium, the agency has warned in classified documents to The President's Office.
According to our media contacts in Hong Kong, Beijing is going to roll-out the red carpet for Mugabe, and his presidential delegation this month, which is thought to comprise mostly of Zanu PF businessmen, fundraisers and a coterie of top cabinet ministers.
China will then host a lavish welcome banquet for Mugabe, courtesy of Chinese leader, Xi Jinping, whose wife Peng Liyuan, is also expected to grace the occasion, and link up with flamboyant First Lady, Grace Mugabe.
"Your President (Robert Mugabe) has admitted that his government is broke," said one of the press sources. "Without a substantial amount of financial resources, his five-year ZimAsset economic policy will suffer a stillbirth. Reports coming out of China, suggest that Beijing will unveil a monetary loan package of about $10b, to be debited into Zimbabwe's accounts in phases. We do not expect China, to announce an initial loan layout of more than $1b, because any money that is going to be released shall be backed by Zimbabwe's mineral resources."
ZimAsset is an ambitious economic blueprint, which Zanu PF hopes to turn around the dwindling fortunes of the economy, currently gnashing in the throes of ballooning domestic and external debts.
Chinamasa last month disclosed that, the outstanding debt, domestic and external now tops a staggering $9,9b.
Austria, Belgium, Finland, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, Switzerland, United Kingdom and United States, who are members of the Paris Club, are owed a total of $3,3b by Mugabe's administration.
Non-Paris bilateral creditors, namely China, Kuwait and South Africa are owed $692 million with the largest debt owed to Beijing at $666 million.
Creditor multilateral institutions also owed money, are among others: African Development Bank (AfDB) which is owed $597 million with arrears pegged at $519 million, ADF Bank at $58 million (arrears $16 million), Afrexim Bank $20 million, BADEA $20 million, World Bank $833 million (arrears $828 million), IDA $563 (arrears $205 million).
The European Development Bank is owed $314 million with arrears amounting to $278 million and IMF $125 million.
Mugabe requires $27b to fund, his ZimAsset project, which runs from 2013 to 2018.
"In pursuit of a new trajectory of accelerated economic growth and wealth creation, my government has formulated a new plan known as the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset): October 2013- December 2018," says Mugabe in a foreword to the policy document. "ZimAsset was crafted to achieve sustainable development and social equity anchored on indigenization, empowerment and employment creation which will be largely propelled by the judicious exploitation of the country's abundant human and natural resources."
China has become the most important and influential investor nation in Zimbabwe. According to the Association of Chinese Enterprises in Zimbabwe, Beijing has about 60 registered companies in the country. The firms are spread across different economic areas, mainly in agriculture, mining, telecommunications, and manufacturing.
Chinese ambassador to Zimbabwe Lin Lin recently disclosed to a local weekly that China was working with the finance ministry to reach an agreement on the extension of lines of credit between Beijing and Harare.
"Normally, during a head of state's visit to China my government provides some development assistance. This is normal practice, but I don't know how much it will be this time. I can assure you that every year China provides development assistance to friendly countries," Lin was reported saying. "As for the extension of lines of credit, this is between the Zimbabwe government and financial institutions in China and that is subject to negotiations. Minister Chinamasa visited China in January and put forward proposals to China Exim Bank for getting assistance, but I haven't got any details. But I would like to make it clear that both the Chinese financial institutions and the Chinese government would like to help our friend, Zimbabwe. We would like to see if an agreement can be reached. But it is not something very simple. It is not like you have US$5 and you spend it to buy a T-shirt, something as easy as that this is a serious issue. So it needs a serious study from both sides and lots of discussions."
The economic lifeline is a culmination of negotiations between China Exim Bank , the Chinese government and the country's finance ministry following, a begging bowl trip made by finance minister Patrick Chinamasa, last month, where Zimbabwe all but put the nation's mineral wealth security under threat, owing to the opaque nature of the new bailout, which critics fear will leave the Asian economic powerhouse, with an iron grip on precious minerals such as gold, diamonds, platinum and uranium as Harare battles for collateral cover for the credit line.
After Chinamasa initially came back home empty-handed, it has now taken Mugabe himself to make a State visit to China, where we gather he shall leave in smiles due to the confirmed bailout loan, to be granted in phases as opposed to a lump sum.
Intelligence information shows that Mugabe made a personal call to Chinese leader, Xi Jinping, last month to convince him to approve the much needed loan, citing the dire economic situation which the country was degenerating into.
"A Head of State cannot just leave the country, to visit another country for fun," high level government informants said this week. "His Excellency (President Mugabe), who now speaks basic Chinese, telephoned with his counterpart last month, who was convinced that it was necessary to give out the loan facility, for strategic political reasons, because Zimbabwe is now a special ally of China on the continent. Zimbabwe also had the good fortune, of Xi Jinping having already formed political chemistry with Mugabe when he was still deputy president. They might appear as if they are not that close, due to international media scrutiny, but believe me leaders across the world have ways and means, in which they communicate."
Mugabe's Chinese visit it would appear, has been precipitated by Central Intelligence Organisation (CIO) warnings about the unhealthy state of the economy, which if not urgently addressed could ignite political mayhem and pandemonium, the agency has warned in classified documents to The President's Office.
According to our media contacts in Hong Kong, Beijing is going to roll-out the red carpet for Mugabe, and his presidential delegation this month, which is thought to comprise mostly of Zanu PF businessmen, fundraisers and a coterie of top cabinet ministers.
China will then host a lavish welcome banquet for Mugabe, courtesy of Chinese leader, Xi Jinping, whose wife Peng Liyuan, is also expected to grace the occasion, and link up with flamboyant First Lady, Grace Mugabe.
"Your President (Robert Mugabe) has admitted that his government is broke," said one of the press sources. "Without a substantial amount of financial resources, his five-year ZimAsset economic policy will suffer a stillbirth. Reports coming out of China, suggest that Beijing will unveil a monetary loan package of about $10b, to be debited into Zimbabwe's accounts in phases. We do not expect China, to announce an initial loan layout of more than $1b, because any money that is going to be released shall be backed by Zimbabwe's mineral resources."
ZimAsset is an ambitious economic blueprint, which Zanu PF hopes to turn around the dwindling fortunes of the economy, currently gnashing in the throes of ballooning domestic and external debts.
Chinamasa last month disclosed that, the outstanding debt, domestic and external now tops a staggering $9,9b.
Austria, Belgium, Finland, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, Switzerland, United Kingdom and United States, who are members of the Paris Club, are owed a total of $3,3b by Mugabe's administration.
Non-Paris bilateral creditors, namely China, Kuwait and South Africa are owed $692 million with the largest debt owed to Beijing at $666 million.
Creditor multilateral institutions also owed money, are among others: African Development Bank (AfDB) which is owed $597 million with arrears pegged at $519 million, ADF Bank at $58 million (arrears $16 million), Afrexim Bank $20 million, BADEA $20 million, World Bank $833 million (arrears $828 million), IDA $563 (arrears $205 million).
The European Development Bank is owed $314 million with arrears amounting to $278 million and IMF $125 million.
Mugabe requires $27b to fund, his ZimAsset project, which runs from 2013 to 2018.
"In pursuit of a new trajectory of accelerated economic growth and wealth creation, my government has formulated a new plan known as the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset): October 2013- December 2018," says Mugabe in a foreword to the policy document. "ZimAsset was crafted to achieve sustainable development and social equity anchored on indigenization, empowerment and employment creation which will be largely propelled by the judicious exploitation of the country's abundant human and natural resources."
China has become the most important and influential investor nation in Zimbabwe. According to the Association of Chinese Enterprises in Zimbabwe, Beijing has about 60 registered companies in the country. The firms are spread across different economic areas, mainly in agriculture, mining, telecommunications, and manufacturing.
Chinese ambassador to Zimbabwe Lin Lin recently disclosed to a local weekly that China was working with the finance ministry to reach an agreement on the extension of lines of credit between Beijing and Harare.
"Normally, during a head of state's visit to China my government provides some development assistance. This is normal practice, but I don't know how much it will be this time. I can assure you that every year China provides development assistance to friendly countries," Lin was reported saying. "As for the extension of lines of credit, this is between the Zimbabwe government and financial institutions in China and that is subject to negotiations. Minister Chinamasa visited China in January and put forward proposals to China Exim Bank for getting assistance, but I haven't got any details. But I would like to make it clear that both the Chinese financial institutions and the Chinese government would like to help our friend, Zimbabwe. We would like to see if an agreement can be reached. But it is not something very simple. It is not like you have US$5 and you spend it to buy a T-shirt, something as easy as that this is a serious issue. So it needs a serious study from both sides and lots of discussions."
Source - www.thetelescopenews.com
