Botswana government denies $600m loan to Zimbabwe

Reports about a $600m loan to the Republic of Zimbabwe from the Botswana government are unfounded
President of Botswana - Mokgweetsi Eric
Mokgweetsi Eric Keabetswe Masisi President of Botswana gives a speech during the General Debate of the 73rd session of the General Assembly at the United Nations in New York September 27, 2018. (Photo by TIMOTHY A. CLARY / AFP)

Botswana’s government has denied reports that it will provide a $600m credit facility to debt-ridden Zimbabwe, dealing a new blow to President Emmerson Mnangagwa’s efforts to jump-start its ailing economy.

Zimbabwe is experiencing its worst economic crisis in a decade marked by high inflation, which peaked above 50% in January and acute shortages of foreign currency.

The country owes the World Bank $1.4bn, amongst other international creditors and currently seeks financial bailouts from its Southern African Development Community neighbours as it is blacklisted by multilateral lenders including the World Bank and IMF. Its international debt stands at  $10bn.

The Southern African country reportedly requested $1.2bn in emergency credit from South Africa but was turned down.

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Botswana’s permanent secretary, Carter Morupisi denies a commitment from Botswana to provide a loan to Zimbabwe.

“The office of the president wishes to inform members of the public that the government of Botswana and the government of Zimbabwe are currently holding discussions under the framework of the bi-national commission which covers a wide range of issues that are mutually beneficial to the people’s of the two countries.

“As such, media reports currently circulating about a line of credit worth $600m being extended to the Republic of Zimbabwe from the Botswana government are unfounded,” Morupisi says.

Botswana’s president, Mokgweetsi Masisi, is in Zimbabwe for talks.  The two countries have elevated ties to the high-level bi-national commission following years of tense relations.

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During his visit to Botswana last year, Mnangagwa expressed an intention for Zimbabwe to start processing its diamonds at the Diamond Trading Company of Botswana.

“In Zimbabwe, we have diamonds but we do not really have a diamond policy. We are now crafting the policy, discussing with Botswana, Namibia and Angola to assist us in formulating one for Zimbabwe.”

The countries’ mines ministers had discussed bringing diamonds from Zimbabwe to be processed in Botswana, Mnangagwa said at the time.

Botswana’s minister of International affairs, Dr Unity Dow, said on Wednesday there has been a paradigm shift in relations between the two countries.

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“We want to improve trade and investment and all this should be beneficial to the ordinary people from the two countries,” Dow said. Ministers from the two countries are on Thursday expected to sign eight bilateral agreements.

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