China rules out Zim budgetary support

HARARE - China has ruled out budgetary support to Zimbabwe.

Finance minister Patrick Chinamasa, who recently returned empty-handed from Washington after being denied funding by the International Monetary Fund (IMF), has bging for external budgetary support to finance the ambitious Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset).

The economic blue-print, launched last year by the Zanu PF-led government, requires $27 billion to be fully implemented.

Running on a meagre budget of $4,2 billion since 2009, Zimbabwe is grappling with funding challenges that are affecting economic recovery following a decade of decline.

Lack of investor confidence and fresh capital injection into the economy have spawned a serious liquidity crunch, forcing many companies to either scale down or close operations.

In an exclusive interview with the Daily News, Chinese ambassador to Zimbabwe Lin Lin said it was not his country’s policy to provide budgetary support to other nations.

“We don’t normally provide budgetary support to other countries but we try to help Zimbabwe in our own way,” he said.

The latest development comes as a slap in the face of President Robert Mugabe and his Zanu PF government which established a “Look East” policy in 2003 aimed at harnessing economic and political support from the emerging Asian giant.

Zimbabwe cannot access external credit lines from international financial institutions such as the World Bank and the IMF after the country was stripped of its voting rights in 2003 and was nearly ejected from the grouping in a rare move for the Washington-based institution in 2006.

The restrictions were imposed after Zimbabwe fell behind in repayments to the Fund.

But in June last year, ahead of fresh elections, IMF said it would work with the country for the first time in more than a decade although ruling out new cash advances.

Lin, however, noted that China will always assist the southern African nation through donations and loans for infrastructure projects.

“In recent years, China has provided our Zimbabwean friends with donations such as food, fertilizer, and machinery worth millions of United States Dollars,” Lin said.

“Moreover, we encourage Chinese financial institutions to provide concessionary and commercial loans to Zimbabwe. As a matter of fact, since 2009, China Exim Bank has approved loans to 6 projects in Zimbabwe, including the construction of the National Defence College, the Harare Water Treatment Project, medical equipment for hospitals in Harare, the Victoria Falls Airport Upgrading project, the NetOne Upgrading Project and the expansion of the Kariba South Hydro Power Station, with a total worth of over $820 million.”

On Tuesday, China donated $500 000 towards the Tokwe-Mukorsi disaster.

In a desperate attempt to lure Chinese investment in the country, Zimbabwe in January this year added the Chinese Yuan to its multiple currency system basket, which include the United States Dollar, South African Rand, Botswana Pula, Indian Rupee, Australian Dollar and the Euro.

Comments (4)

"Lack of investor confidence." As long as ZanuPF does not question themselves and follow their conscience, we will remain with this for as long as they rule. It is so simple, when the West invested in the country they also built it, when China was said to be investing they built the army barracks and scrapped to the core of the earth all the diamonds and nothing developmental can be said in those areas with diamonds. If the West had been allowed in this industry we could be having a diamond cutting and polishing factory here.

Maita Manyuka - 6 March 2014

When you hear China, our all weather friend say they are not giving Zimbabwe money to finance the budget then we a. re heading for crush unless if we find money urgently to finance govt operations and salaries. Govt is now broke and will soon default on salaries and local loans. We are in trouble. Wait and see.

Bernard - 6 March 2014

@ Bernard thats the rumour floating around brother that we will not get our pay l am scared l got two girls going to school what am l going to do my wife is also a civil servant and if our money doesn't come we are DOOMED

roland dube - 8 March 2014

seriously the main problem is that the government expects to go to china with a mickey mouse proposal that doesnt say how the money is going to be paid back and also act in a way that no ountry can determine or trust any policy cz any tom dick or harry can come along and change it overnight to suit their needs. hapana mari inouya. the chineses said it last yar change or die i mean russia and china hard core communist countries went to the west for assisstance they choose to back down on some areas gave assurance of respect for international investors if they obeyed laws curbed corruption and also importantly paved way for transperancy and puished / jailed peple who operated unethically. manje in zim the air of unaccountability and lac of transparency will always cause problems. and seriously i cant believe in this day and age that someone can come ad act unethically and illegally but at the end of the day just use the fact that ndakarwa muhonda as a crutch to justify actions that have nothing whatso ever to do with the liberation struggle.

are they serious - 10 March 2014

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