Biti dismisses Gono's latest call on IMF loan

The special credit line of US$510 million was extended under a Group of 20 facility to help developing countries deal with the impact of the global economic downturn.

Gono reportedly said Robert Mugabe, Prime Minister Morgan Tsvangirai and Deputy Prime minister Arthur Mutambara – head of a rival MDC grouping – should instruct Biti to tap the US$510 million line to step up the pace of economic recovery.

Mr. Tsvangirai’s formation of the Movement for Democratic Change, of which Biti is secretary general, has been demanding the removal of Gono from his post at the central bank, but Mr. Mugabe, who reappointed Gono in late 2008, has adamantly refused to do so.

The finance minister earlier said that if Zimbabwe, which has US$5.7 billion in external debt, drew on the credit line, it would do so in order to rebuild the national infrastructure.

In its weekly market report, Zanu PF linked Kingdom Financial Holdings Limited (KFHL) said Biti’s position could prolong the current liquidity crunch.

Former Finance Minister Hebert Murerwa and Nigel Chanakira owned Kingdom Financial Holdings is supposed to have been siezed alongside other business units of Kingdom Meikles Africa Limited, but the bank is now being used by Zanu PF to give party line financial signals for a political agenda.

“With the Finance Minister saying the funds would only be used under a new budget … it may be another four months before the money is used as a new budget would only come into effect with the beginning of a new year,” KFHL said.

“This may mean that the liquidity crunch will continue and it would take longer for companies to increase capacity utilisation to acceptable levels.”