South Africa offered to use its influence with the International Monetary Fund and World Bank to help broker a debt-clearance plan for Zimbabwe, according to a person familiar with the matter.
The continent’s most-industrialized nation may be able to help its neighbor negotiate a credible plan to clear arrears owed to the creditors such as the World Bank to make the country eligible for fresh loans to revive its economy, said the person, who asked not to be identified because the information is private. Helping Zimbabwe to reach a deal with its lenders is the best the government is able to offer Zimbabwe, said the person.
The two countries have close links because many of the estimated four million Zimbabweans who were driven away by the economy’s collapse under former President Robert Mugabe live in South Africa. Hopes of an economic revival in Zimbabwe lie in tatters 14 months after President Emmerson Mnangagwa took office, as the nation reels from an acute shortage of foreign exchange and fuel and surging food prices, which has led to violent protests.
Zimbabwe’s total debt is about $16.9 billion. Arrears total $680 million with the African Development Bank, $1.3 billion outstanding with the World Bank and $308 million with the European Investment Bank, Finance Minister Mthuli Ncube said in October. The government can’t access fresh financing without an acceptable arrears-clearance plan.
South Africa in December declined Zimbabwe’s request to borrow $1.2 billion, the National Treasury said on Monday.