Zimbabwe struggles to service DBSA loans

Zimbabwe's cash strapped government said it is struggling to service its $206 million loan sourced from the Development Bank of Southern Africa due to deteriorating economic conditions.

The funds which were secured during the Government of National Unity period were used for the rehabilitation of the 820 Kilometer highway from Plumtree-Bulawayo-Harare-Mutare.

Finance minister Patrick Chinamasa said government was seeking various ways to re-negotiate the loan repayment scheme.

Market watchers said Zimbabwe's failure to service its obligations could explode into a diplomatic tiff between Harare and South Africa, which guaranteed the loan.