{"id":10925,"date":"2019-07-05T16:44:44","date_gmt":"2019-07-05T16:44:44","guid":{"rendered":"https:\/\/www.africa-press.com\/zimbabwe\/?p=10925"},"modified":"2019-07-05T16:44:44","modified_gmt":"2019-07-05T16:44:44","slug":"zim-looks-up-to-china-for-rescue","status":"publish","type":"post","link":"https:\/\/www.africa-press.cc\/zimbabwe\/all-news\/zim-looks-up-to-china-for-rescue","title":{"rendered":"Zim looks up to China for rescue"},"content":{"rendered":"

PRESIDENT Emmerson Mnangagwa\u2019s government has upped the ante on its quest for a bailout package from China in a desperate bid to rescue the floundering economy with Finance minister Mthuli Ncube and Reserve Bank of Zimbabwe (RBZ) governor John Mangudya visiting Beijing on a \u201crelations management trip\u201d, the Zimbabwe Independent can report.<\/span><\/p>\n

This comes after several failed attempts to secure a US$2 billion bailout package with the Chinese government demanding Zimbabwe to service US$700 million in loans that have since accumulated about US$300 million in arrears.<\/p>\n

\u201cThe minister and governor were in China last week for a relations management mission which included meetings with government officials and departments, the private sector and financial institutions,\u201d a source said.<\/p>\n

\u201cBasically, they were trying to bilateral issues. This means economic, trade, investment and funding issues.\u201d<\/p>\n

While Zimbabwe remains isolated by international financial institutions as its re-engagement drives continues to face hurdles due to political problems and gross human rights violations, China has remained a viable option for a bailout package, although the Asian giant has been cautious in its engagement.<\/p>\n

Although Mnangagwa in February denied approaching his Chinese counterpart Xi Jinping asking for a US$2 billion bailout package on the sidelines of the Forum on China-Africa Co-operation in Beijing last September, last week\u2019s trip by Ncube and Mangudya shows Harare is keen to get fresh funding from Beijing, sources said.<\/p>\n

This follows reports that Harare has tabled a request for the critically needed bailout in a desperate bid to ease the country\u2019s crippling liquidity crisis, although Beijing insists that Zimbabwe must clear its arrears with the world\u2019s second largest economy first before getting new funding.<\/p>\n

Zimbabwe has for some time been engaging funders to help raise US$1,8 billion to clear arrears to multi-lateral institutions under the Lima Plan to enable the country to secure US$2 billion in fresh funding.<\/p>\n

After several deadlocks, Zimbabwe turned to South Africa for as alternative source of funding to the tune of US$1,2 billion, but was last December turned down when Pretoria cited its own domestic obligations and Harare\u2019s record of failure to repay loans.<\/p>\n

Ncube and Mangudya left Harare last week Monday for Beijing where they met Chinese government authorities, department officials, financial institutions, the private sector and other stakeholders.<\/p>\n

Mnangagwa\u2019s emissaries also used the visit to motivate for a rescue package in the form of loans and grants. Zimbabwe has benefitted from Chinese loans at concessionary rates of between 2% and 2,5% per annum.<\/p>\n

Although the Chinese have kept doors of negotiation open and pledged to continue funding infrastructural projects, Beijing has maintained that repayment of arrears was a precursor to fresh funding.<\/p>\n

The Chinese have told Zimbabwe that it would also require credit guarantee by the China Export and Credit Insurance Corporation \u2014 Sinosure \u2014 to get funding.<\/p>\n

Sinosure is a major Chinese state owned enterprise under the administration serving as the provider of export credit insurance, in particular coverage for the export of high-value added goods in China. Zimbabwe owed it money.<\/p>\n

Ministry of Finance and RBZ officials have also been negotiating for a loan from the Industrial and Commercial Bank of China and the Export-Import Bank of China, but a breakthrough has been slow in coming as the Chinese remain worried about Zimbabwe\u2019s country and political risk profile, lack of creditworthiness and the capacity to repay.<\/p>\n","protected":false},"excerpt":{"rendered":"

PRESIDENT Emmerson Mnangagwa\u2019s government has upped the ante on its quest for a bailout package from China in a desperate bid to rescue the floundering economy with Finance minister Mthuli Ncube and Reserve Bank of Zimbabwe (RBZ) governor John Mangudya visiting Beijing on a \u201crelations management trip\u201d, the Zimbabwe Independent can report. This comes after […]<\/p>\n","protected":false},"author":84,"featured_media":9284,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,12],"tags":[471,174,450,150,320],"class_list":{"0":"post-10925","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-all-news","8":"category-policy","9":"tag-china","10":"tag-finance","11":"tag-mangudya","12":"tag-ncube","13":"tag-relations"},"yoast_head":"\nZim looks up to China for rescue - zimbabwe<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/zim-looks-up-to-china-for-rescue\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Zim looks up to China for rescue\" \/>\n<meta property=\"og:description\" content=\"PRESIDENT Emmerson Mnangagwa\u2019s government has upped the ante on its quest for a bailout package from China in a desperate bid to rescue the floundering economy with Finance minister Mthuli Ncube and Reserve Bank of Zimbabwe (RBZ) governor John Mangudya visiting Beijing on a \u201crelations management trip\u201d, the Zimbabwe Independent can report. 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