Johannesburg - Zimbabwe’s state-owned rail company has agreed to borrow $460 million (R4.8 billion) from the Development Bank of Southern Africa to develop its unprofitable network that relies mainly on rolling stock acquired before independence in 1980.

The loan will be signed within the next week or two, Lewis Mukwada, general manager for National Railways of Zimbabwe, said by phone today.

Jacky Mashapu, a spokesman for the Midrand, South Africa-based DBSA, declined to immediately comment.

“Now the real work starts,” Mukwada said from Bulawayo, Zimbabwe’s second-largest city.

“This is good news for NRZ.”

The country’s railways require $1.9 billion of investment after freight volumes declined by about two-thirds since 2000 to 3.6 million metric tons last year, Mukwada said July 7.

Zimbabwe’s economy has stalled and is threatened by deflation after contracting by 40 percent in the eight years following land reform programs that dispossessed white farmers in 2000. - Bloomberg News