China offers 950 million dollar credit to Zimbabwe

Jun 30, 2009, 15:29 GMT

Harare - China has agreed to provide Zimbabwe's coalition government with US 950 million US dollars in lines of credit, Prime Minister Morgan Tsvangirai revealed Monday.

That represents the biggest single financial package since the new power-sharing administration with President Robert Mugabe was inaugurated in February.

Tsvangirai has just returned from a lengthy trip to the US and Europe, where he sought funding and aid from Western governments previously hostile to Mugabe.

The prime minister said that the credit was secured by finance minister Tendai Biti, his number two in the Movement for Democratic Change former opposition party.

Finance has been one of the new government's biggest obstacles as it struggles to rebuild the once-prosperous economy, shattered by Mugabe's land-seizures from white farmers.

Western government have so far shied away, saying they will only contribute large sums directly to the government once the new administration ends repressive policies, introduces human rights reforms and fully establishes the rule of law.

Tsvangirai, back from his three-week tour of nine Western countries, said that each of the leaders he met 'asked why, after almost five months, had fundamental obligations' signed by Mugabe and Tsvangirai to carry out reforms not been implemented.

'If we want outside assistance, we must first prove that we are able to fulfil the obligations,' he said.

Tsvangirai said he had received pledges for humanitarian aid and assistance amounting to about 500 million dollars on his tour.

MDC parliamentarian and financial adviser Eddie Cross explained that part of the Chinese credit took the form of concessional credit to government-linked projects, one of which was the construction of a large new airport at Victoria Falls, Zimbabwe's largest tourist destination.

The other segment was commercial credit for private companies to import goods from China, and included a major consignment of fertiliser to help boost the country's food production, as well as vehicles, packaging, industrial equipment.

'It's a huge boost to our economic recovery efforts,' Cross said.

Besides the Chinese and new Western finance offers, the government has also secured close to half a billion dollars in credit from African development banks and the South Africa and Botswana governments.

In an apparent reference to the 85-year-old Mugabe, Tsvangirai said that 'old attitudes that refuse to change' were the greatest problem facing the government.