Harare - Zimbabwe has unveiled US$490 million worth of mainly foreign loans, which the central bank said would help rescue its struggling economy, including a $200 million (R1.5 billion) facility from China.
Most of the loans would be directed at the agricultural sector, which has been hit hard by drought and President Robert Mugabe's backing for the seizure of white-owned farms for landless black people.
"In unveiling these initiatives amounting to $490 million, it is the Reserve Bank's minimum expectation that all economic players can now take up the challenge and get on with progressive economic enterprise," said central bank governor Gideon Gono.
The Chinese facility announced this week would be the first major foreign loan extended to the country after six years of recession, during which the economy shrunk by a third and inflation soared to more than 1 000 percent.
Mugabe's government has embarked on a "Look East" policy to strengthen economic and political ties with Asian and Muslim countries. International donors such as the International Monetary Fund have stopped lending to Zimbabwe because of policy differences, including the land seizures.
"A lot more is in the offing I am abundantly positive about the future of this country," Gono said, adding that the Chinese loan was a culmination of a visit by vice-president Joyce Mujuru to China in June.
The loan package unveiled by Gono included a $35 million facility to import 120 000 tons of wheat from an international bank based in Zimbabwe and a $25 million loan to import fuel through local NMB Bank and South Africa's Musa Capital.
It also included a syndicated $45 million of credits from PTA Bank and Afreximbank, both Africa-based development banks. The two banks provided $20 million separately through local banks to fund imports of farming inputs.
Some of the money had already been received while more was on the way, said Gono.
Analysts said the influx of cash would help but was unlikely to address underlying fundamental problems in the country's economy, now grappling with shortages of foreign currency, fuel and food, unemployment above 70 percent and deepening poverty.
"The key question with Zimbabwe is much more fundamental than loans to fund their forex shortfall. There are a lot of problems like hyperinflation and budget deficits," said Citigroup sub-Saharan Africa strategist Leon Myburgh. "From an investment point of view there is uncertainty about the political future this might help alleviate the short-term problem without addressing the root causes." - Reuters