21 March 2011

China lends Zimbabwe $700 mln, seeks protection

By MacDonald Dzirutwe
HARARE (Reuters) - China signed nearly $700 million in loan deals with Zimbabwe on Monday, its biggest loan package to date, and urged the government to protect Chinese firms from nationalisation plans.
Shunned by the west, President Robert Mugabe has increasingly sought help elsewhere. China, meanwhile, covets the mineral resources of the southern African country as Zimbabwe struggles back from economic collapse.
Zimbabwean Vice President Joice Mujuru gave details of the loan agreements during a visit by Chinese Vice Premier Wang Qishan, the second high-level Chinese visitor to Harare in little over a month.
Mujuru said loans from China's Export-Import Bank would be used for priority areas such as agriculture, machinery and equipment -- nearly half the money would go for that -- as well as health and water systems.
Wang said $100 million of the money would be a concessionary loan for the government itself.
Zimbabwe needs the money badly.
There are food shortages in six of ten provinces because of drought. Western countries, which don't trust Mugabe, have not stepped up funding despite the unity government he formed with the opposition two years ago.
Mugabe has ruled for over three decades and the west has imposed sanctions on his ZANU-PF party, accusing him of human rights abuses and election fraud. Donors seek more political and economic reforms before releasing more money

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