Gono announces a rival US$500 million rescue package

HARARE – International and regional financiers have offered Zimbabwe $500 million in credit lines to help repair its economy, but they remain cautious over conflicting government signals on policy, the central bank said on Friday.

Central bank governor Gideon Gono told reporters the funds would be used to rescue the economy following moves to liberalise the economy and the formation of a unity government, which is expected to ease political tensions.

Zimbabwean Prime Minister Morgan Tsvangirai met South African President President Kgalema Motlanthe on Friday asking for at least $600-million (R6-billion) in the form of a rescue package to fund salaries for Zimbabwe’s civil servants and to meet other essential services expenditure in the next six months.

On Thursday, SA foreign affairs director-general Ayanda Ntsaluba said the two teams would be discussing the reconstruction of Zimbabwe, but he had no more information because the meeting had been requested by Tsvangirai.

Authoritative sources said Tsvangirai, in his first visit to South Africa as prime minister, would plead with Motlanthe for the rescue package, which he wants as a loan to be repaid when "the new government gets Zimbabwe’s revenue system re-established".

If South Africa cannot afford the package on its own, Tsvangirai will ask Motlanthe to help get other Southern African Development Community countries to contribute.

In addition to the rescue package, Tsvangirai will also ask South Africa to open new lines of credit to Zimbabwe’s beleaguered private sector.

The sources, who did not want to be quoted before Tsvangirai actually met Motlanthe, said the new government would face an uphill struggle in meeting its promises unless South Africa helped.

At his inauguration last week, Tsvangirai promised to start paying professionals in foreign currency immediately. They are now paid in worthless Zimbabwean dollars.

The United States and several European countries have already said they will not help fund the new government until a number of benchmarks about restoring the rule of law and democracy are met.

The EU and the US are also worried about the continued influence of Reserve Bank of Zimbabwe governor Gideon Gono, who has facilitated the salting away of millions of dollars from the bankrupt treasury for Mugabe and his family. Any help that has come into the country, including the R300-million in farming aid from South Africa, has seemingly been abused by the ruling elite at the expense of the poor.

SADC executive secretary Tomaz Salamao has announced a fact-finding mission to determine how the inputs were distributed.

Biti has reportedly already asked Gono to resign, but observers consider it unlikely that Mugabe will agree to let him go.

The disagreement could provoke a major showdown in the new government.

Mugabe reappointed Gono for another five-year term before the unity government was installed.

The move incensed the MDC because the unity agreement that both parties signed barred Mugabe from making senior appointments unilaterally until the new government had been formed.

The figure of R6-billion is based on a mini-budget of R1-billion monthly to pay civil servants’ salaries and to meet other essential humanitarian costs.