People of the South

R1-billion Zimbabwe loan controversial but strategic

Zimbabwe’s appeal for financial assistance puts South Africa in a position to make requests for political change in the cash-strapped country.It follows a request from Swaziland for a loan of R2.4-billion that was first mooted in 2011. This was after its main source of revenue, payments from the Southern African Customs Union, fell sharply during the economic recession. The tiny kingdom has also faced financial administration problems, which contributed to pro-democracy challenges to billionaire King Mswati III’s rule.

Whether Zimbabwe succeeds in its plea will only be revealed following a meeting later this month between Gordhan and his Zimbabwean counterpart, Tendai Biti. The situation in the country is fraught under the coalition government of the Movement for Democratic Change (MDC) and Robert Mugabe’s Zanu-PF.

Media reports suggest that Biti is looking for nearly R1-billion from South Africa, but neither the treasury nor the department of international relations and co-operation would confirm this.