The Financial Mail quoted Finance Minister Trevor Manuel as saying a credit line made sense given that most of the goods needed to restock bare stores in Zimbabwe would be bought in South Africa.
"We will look at the credit facility. There is an old (Reserve Bank) credit line from 1967 that goes back to (Rhodesia’s) unilateral declaration of independence, and we are exploring using that," he said in an interview.
While a credit line will not solve the country’s funding problems, it will allow private banks to lend money to wholesalers, retailers and producers to purchase goods using credit, and ultimately give millions of poor Zimbabweans easier access to essential products.
Asked for comment, a Zimbabwean economist Itayi Matambo, said, “While we try every means to find ways and means of reviving our economy, we should be aware of South African economic interest in the Zimbabwean political process.
The risk of South African retail invading Zimbabwe economy in its weak mode might not be reversible in the future and this might link its politics into our internal affairs or inhibit the growth of our own industry.
In the long term, Zimbabwe needs an industrial policy that has synergies with its new land policy, and this can be impeded by the South African influence in the economy," he said in an interview with The Zimbabwe Mail.
Robert Mugabe and the Zanu PF regime have argued for years on Trade imbalances between the two nations and we as a nation must not lose our desire to use our instruments that protect our local potential, said Mr Matambo.
A Zimbabwean business consultant with Godfrey Marimo of ECOBIZ, pointed out the dominance of Edgars Stores, Sales House, Markro amongst South African retail giants that have been in existence for years in Zimbabwe as a result of the Rhodesian ties with Apartheid South Africa during the times of sanctions imposed on Ian Smith.
These South African High street stores have made it difficult for home grown innovative entrepreneurs to enter the market, condemning them into running tuck-shops and grinding mills, while massive dividends are repatriated to South Africa every year, and boosting its textile industry at the expense of Zimbabwe.
In the coming months South African businesses will flock into all Zimbabwean sectors of the economy with the help of its government and acquire a significant share of the market and mineral rights without transparent measures to protect the local industry.
Zimbabwe has estimated it needs $1 billion now to get farms, schools and hospitals working, and another $5 billion later to fully rebuild the economy.
A new power-sharing government has raised hopes of an end to an economic meltdown in the once prosperous southern African country where inflation was last calculated in mid-2008 at 231 million percent, and a cholera epidemic has infected more than 80,000 people.
Food and fuel are scarce and the currency virtually worthless, leading to widespread use of the U.S. dollar and South African rand.
The Financial Mail said officials would not be drawn on the details of discussions, but analysts said a credit line was likely to have negligible impact on South Africa’s reserves and sovereign credit ratings.The $1 billion in aid would still have to be sourced, although South Africa could consider a smaller grant.
South Africa, the continent’s biggest economy, has already transferred 300 million rand to Zimbabwe for agricultural aid.