SA approves US$100m Zim bailout
South Africa will help Zimbabwe deal with its weak economy with a US$100 million bailout.
JOHANNESBURG -South Africa has approved $100 million in budgetary support to cash-strapped Zimbabwe, helping plug a gap in its finances ahead of elections expected in the second half of the year, Finance Minister Tendai Biti said on Monday.
Zimbabwe's economy has been on the mend since President Robert Mugabe and Prime Minister Morgan Tsvangirai agreed to share power after disputed 2008 elections but is still suffering a hangover from a decade-long recession widely blamed on Mugabe.
Last year, Biti said Harare had approached regional economic giant South Africa and oil-rich Angola for $150 million amid a lack of aid from Western donors who have imposed sanctions on Mugabe and his inner circle over charges of human rights abuses.
"Pursuant to discussions in September 2012, I'm aware the South African cabinet has made a decision and it's a positive decision," Biti told a news conference.
South African officials could not be reached for comment.
Biti said he had also made an additional plea to South Africa and Angola to fund elections expected later this year. The government borrowed $40 million domestically to fund a March 16 constitutional referendum.
"It is self-evident that Treasury has no capacity to fund elections. We're not going to borrow again for the elections," he said, repeating his call for foreign funding for polls which have an initial budget of $132 million.
Zimbabwe has also appealed to the United Nations for election funding. A visit by a U.N. team to assess Harare's needs has been delayed due to squabbling in the unity government but is now expected to take place soon, he added.
Biti said government revenues remained depressed while expenditure, mainly wages, continued to exceed receipts.
A poor farming season and lower-than-expected diamond revenues from the government's Marange fields continued to weigh on the budget, Biti said.
He added that Zimbabwe expected to harvest 900,000 tonnes of maize, the staple food, this year, down from just over 1 million tonnes in 2012 because of a mid-season drought.
Zimbabwe would import 150,000 tonnes of maize, mostly from Zambia and South Africa, Biti said, but the bulk of purchases would be by private millers and not the government.