Zimbabwe gets $400m in loans

Harare - Zimbabwe's new power-sharing government has secured $400m in credit lines from neighbours to revive the country's moribund economy, a state daily reported Wednesday.

Citing industry minister Welshman Ncube, The Herald newspaper said Zimbabwe had secured about $200m in credit from nations in the Southern African Development Community (SADC).

Countries in the Common Market for Eastern and Southern Africa (COMESA) will extend another $200m in credit, the paper added.

The report did not say which countries would extend the credits or what form they would take, except that the loans could only be used by private companies to meet their capital requirements to revive their businesses.

Ncube was not immediately reachable for comment.

Once a model economy and food exporter, Zimbabwe's economy has been on a downturn for nearly 10 years, battered by hyperinflation that only stopped when the government this year abandoned the local currency in favour of the US dollar and the South African rand.

The economic crisis blamed on the policies of long-time President Robert Mugabe, including controversial land reforms, saw many companies pulling down the shutters while the few which remained operated at a fraction of their capacity.

Ncube said the money secured by the government would help companies buy raw materials.

"We hope to start accessing the funds in next few weeks but I must point out that this money is working capital for companies seeking to procure raw materials to improve their capacity," the newspaper quoted minister Ncube as saying.

"The money is not for expansion purposes."

Zimbabwe's three main political rivals formed a new powersharing government in February aimed at tackling a chronic economic crisis and easing political tensions in the aftermath of contentious presidential elections last year.

- AFP