[It didn’t take long eh? What’s the bet this was all planned, and “signed” beforehand eh? They say there are “conditions” attached to this deal. Well, I’m skeptical. Let’s see if any of these conditions come to pass, and if any of it translates into anything tangible. I don’t trust the ANC. They’re proven liars, and we’ll see if anything genuine comes of this. Jan]

SA has already signed a provisional memorandum of understanding with Zimbabwe for a $1bn (R6,54bn) credit facility to help its troubled neighbour pay an overdue International Monetary Fund (IMF) debt.

Normally reliable Zimbabwean sources said officials of the South African Reserve Bank and their Zimbabwean counterparts agreed on a draft deal last week.

Government spokesman Joel Netshitenzhe confirmed last night that “other consultations involving the national treasury and the reserve banks of both countries” had taken place. He would not say whether a memorandum of understanding had been signed.

“I am not aware of it, but that doesn’t mean a memorandum of understanding doesn’t exist,” said Netshitenzhe. But he said no decision on whether to grant the loan had been made.

Senior officials of the Zimbabwean central bank confirmed the agreement, but would not release details of the draft, fearing this could scupper the final deal.

“A provisional agreement was signed, and SA commits itself to providing Zimbabwe with the funds to settle our IMF debt,” a source said.

Gideon Gono, governor of Zimbabwe’s central bank, said he was unable to discuss the issue. “I don’t comment on our bilateral relations (and) consultations with our counterparts in the region,” he said yesterday.

President Thabo Mbeki may make an announcement on the loan when he addresses the media on the outcome of this week’s cabinet lekgotla on Sunday.

SA has set stringent terms for the granting of the $1bn rescue package requested by President Robert Mugabe’s government.

The terms include demands that Mugabe restore the rule of law, restart talks with the opposition Movement for Democratic Change (MDC), lift restrictions on the media and stop Operation Restore Order, a controversial urban clean-up campaign.

Sources say reports from Harare that there is a memorandum of understanding on the $1bn loan signal Mugabe’s acceptance of SA’s tough terms.

Gono met his South African counterpart, Tito Mboweni, last Friday for talks on the loan.

Herbert Murerwa, Zimbabwe’s finance minister, is also said to have met Finance Minister Trevor Manuel. Sources said the ministers discussed the loan and then tasked Mboweni and Gono with finalising an agreement.

Murerwa has refused to comment on the issue.

Zimbabwean officials said although they failed to meet an IMF deadline on Wednesday, meaning the country would be automatically expelled from the lending agency, they still had a two-week grace period in which to pay the $295m arrears.

Gono said yesterday Zimbabwe would “escalate IMF repayments over the outlook period” to meet its financial obligations, but did not say where the money will come from.

“Over the past 18 months, Zimbabwe has progressively escalated its repayments to the IMF from $1,5m per quarter to the current level of $9m per quarter, giving a cumulative total repayment of $36,6m,” he said.

The IMF board meets in two weeks’ time to decide Zimbabwe’s fate in the fund. A process of formal expulsion is already in motion — the last step in a series of escalating measures the fund applies when acting against members that fail to meet their financial obligations under the articles of agreement.

Meanwhile, Zimbabwe yesterday devalued its currency by a massive 94,6%, from Z$9000 to the dollar to Z$17500 to the dollar. Gono announced the move during his monetary policy statement review in Harare.

The latest devaluation came barely two months after a 45% adjustment, which failed to stifle the thriving parallel market. The current devaluation is also unlikely to close the gap between the official rate and the black market rate, which fell two days ago to Z$35000 to the greenback.

Gono also raised secured lending rates from 160% to 180%, while unsecured lending rates rose to 190%, from 170%. He raised the gold support price from Z$175000 a gram to Z$230000 a gram. Mining is a major forex earner.

Source: AllAfrica.Com
URL: http://allafrica.com/stories/200507220088.htm…/p>