Zimbabwe News and Internet Radio

Stanchart Plc awaits British government nod for Mugabe bailout

Standard Chartered Bank, a British multinational banking and financial services group, has said it is waiting for approval by the British government to give the autocratic Zanu PF government a $262 million bailout loan.

President Robert Mugabe (Picture by AFP)
President Robert Mugabe (Picture by AFP)

The British domiciled bank confirmed it had been asked by regional banks to consider a financing deal, following Zimbabwe’s commitment to International Financial Institutions (IFIs) to honour its $1,8 billion arrears. 

Zimbabwe wanted to settle the $600 million African Development Bank (AfDB) debt ahead of AfDB’s board meeting on December 7. Zimbabwe’s debt issue will be high on the agenda on the day.

Standard Chartered and the Afreximbank were due to make an equal $262 million payment towards Zimbabwe’s AfDB arrears, with the broke Zimbabwe paying the balance of $82 million.

“…we were asked by regional banks to consider a financing deal. We won’t proceed without full support of UK government and reforms,” the London Stock Exchange-listed financial institution said in a response to a Twitter inquiry.

The United Kingdom embassy in Zimbabwe also distanced itself from the deal.

“…we are not involved & our position could not be clearer,” UK envoy in Harare Catriona Laing tweeted.

Zimbabweans on the microblogging site also questioned the bank on its plan to assist President Robert Mugabe’s government.

“This is really disturbing! You know there’s no hope in the world when corporations like @StanChart start bailing out … Mugabe! Sad!” one Twitter user said.

Tendai Biti’s opposition PDP warned that when democratic change finally comes to Zimbabwe, the new government will repudiate this debt as it has been used to prop up “a rogue regime” and “oppress the people” of Zimbabwe.

“We are therefore alarmed that the Standard Chartered Bank like the IMF and the World Bank has chosen to align itself with a corrupt and ruthless regime,” Jacob Mafume, PDP national spokesperson said in a statement.

“It is shocking that the IFIs want to bail out Zimbabwe when every government minister or senior public official in office has this year been implicated in some form of corruption running into millions of dollars.

“The international community is also turning a blind eye to the fact that in order for Zimbabwe to receive any form financial assistance, it must first meet certain conditions and reforms.  . . . issues of the indigenisation and empowerment policy, land, electoral reforms, tackling corruption and the promotion of ease of doing business remain outstanding.

“Zimbabwe must also reduce its wage bill for civil servants, where tens of thousands of ghost workers are employed. Instead, Zanu PF is on a recruitment drive for thousands of young people to train as soldiers as it readies for the 2018 elections and suppress the people’s will.”

Zimbabwe missed its self-imposed June 30 deadline for paying its $1,8 billion to the IMF, AfDB and the World Bank (WB).

Zimbabwe recently paid off its $124 million IMF arrears through its special drawing rights held with the Bretton Woods institution.

Finance minister Patrick Chinamasa last year proposed an arrears repayment plan at the IMF/WB annual meetings in Lima, Peru where consensus was reached with creditors on a repayment strategy which entailed the clearance of the $1,8 billion arrears by May 30 2016.

The date was later on pushed to June 30, but the treasury chief still failed to meet the deadline.

Presently, multilateral financial institutions are barred by law from extending loans to Zimbabwe because of its outstanding debts. The clearance of the arrears is anticipated to pave way for fresh lines of credit. Daily News