Mugabe prepared to repeal repressive laws to get loan from SA

President Robert Mugabe was prepared to repeal repressive laws like the Access to Information and Protection of Privacy Act and the Public Order and Security Act to get a loan of about $500 million from South Africa in 2005.

According to one of the cable released by Wikileaks, central bank governor Gideon Gono told former journalist Sydney Masamvu that Mugabe had given him flexibility to discuss political terms for the loan with the Pretoria government.

South Africa reportedly wanted the normalisation of the political situation in Zimbabwe as a condition for granting the loan.

Full cable:

Viewing cable 05PRETORIA4436, ZIMBABWE LOAN TALKS RESUME; AGREEMENT NEAR

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This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 PRETORIA 004436

SIPDIS

DEPT FOR AF/S B. NEULING, M. TABLER-STONE

TREASURY FOR B. CUSHMAN

E.O. 12958: DECL: 11/02/2015

TAGS: PREL ECON ZI SF

SUBJECT: ZIMBABWE LOAN TALKS RESUME; AGREEMENT NEAR

REF: A. PRETORIA 4375

¶B. PRETORIA 4071

¶C. PRETORIA 4024 AND PREVIOUS

Classified By: Charge d’Affaires Jeff Hartley

Reasons 1.4(b) and (d)

¶1. (C) Summary. Talks on the proposed South African loan to

Zimbabwe resumed November 3 in Cape Town, according to ICG

analyst Sydney Masamvu. The two sides have agreed on the

economic conditions, but are still negotiating the political

terms. Mugabe has reportedly given Reserve Bank Governor

Gono some flexibility to negotiate political conditions, such

as a promise to review repressive legislation and resume

constitutional dialogue. While there will be haggling over

the loan’s political conditions, we believe both sides want

an agreement and could conclude a deal as soon as this

weekend. End Summary.

¶2. (C) Zimbabwean Finance Minister Herbert Murerwa and

Reserve Bank Governor Gideon Gono traveled to South Africa

November 2 for negotiations on the proposed South African

loan to Zimbabwe. According to International Crisis Group

(ICG) Analyst Sydney Masamvu, Murerwa and Gono began meetings

with their South African counterparts, Finance Minister

Trevor Manuel and Reserve Bank Governor Tito Mboweni,

November 3 in Cape Town. In a November 3 telcon, Gono told

Masamvu that the Zimbabweans plan to remain in South Africa

through November 6 and hope to conclude the talks in that

timeframe. Masamvu said that the two sides want to keep the

talks secret, which is one reason they are holding them in

Cape Town, instead of Pretoria. (Note. To date, the SAG has

not announced the talks, nor has the South African press

picked up the story. Post has been unable to confirm the

talks with Treasury officials, but has learned that National

Treasury Chief Director for International Economics flew to

Cape Town on November 3rd. End Note.)

————–

Conditionality

————–

¶3. (C) Gono told Masamvu that the two sides have agreed on

the economic conditions for the loan. These include exchange

rate reforms and “depolitization” of the Zimbabwe Reserve

Bank. Masamvu said that the economic terms generally mirror

those pushed by the IMF, and that South Africa had been in

contact with IMF staff to discuss appropriate conditionals.

(Note: The SAG refuses to use the word “condition” to

describe the loan terms, but this is in fact what they are

imposing. End Note.)

¶4. (C) On political conditions, Gono told Masamvu that

President Mugabe had given him some flexibility to address

South Africa’s key terms. South Africa reportedly seeks the

“normalization” of the political situation, which includes:

(1) repeal of repressive legislation (the Access to

Information and Protection of Privacy Act (AIPPA) and the

Public Order and Security Act (POSA)); and, (2)

constitutional dialogue with the opposition. According to

Masamvu, Mugabe gave Gono authority to guarantee to the South

Africans that he would “review” repressive legislation in the

near future, and would consider repealing AIPPA and removing

the more repressive elements of POSA. On the constitution,

Gono planned to explain how the new Zimbabwean Senate and

proposed harmonization of the election cycle would advance

reform. The GOZ would promise to seek an “appropriate

platform” to discuss constitutional reform with all

stakeholders, not just the opposition MDC party.

¶5. (C) Early indications suggested that the South Africans

were being “tough” on the political conditions, Gono told

Masamvu November 3. Masamvu speculated that Gono would be on

the phone with Mugabe often during the negotiations.

———–

Loan Amount

———–

¶6. (C) Gono told Masamvu that the total loan amount is

approximately $470 million, although the GOZ expected

approximately $200 million in the first tranche. Deputy FM

Pahad told CDA October 28 that South Africa was negotiating a

Rand 1.2 billion loan for Zimbabwe (approximately $180

million) (Ref A). (Comment: The R1.2 billion could refer to

the first tranche. End Comment.)

——-

Comment

——-

¶7. (C) We believe South Africa wants to conclude the talks

and make the loan. Stability in Zimbabwe remains a major

preoccupation for the SAG, and it views the loan as a means

to shore up Zimbabwe’s collapsing economy, and at the same

time advance political reform. Mugabe’s alleged

“concessions” on political conditionals, such as his

agreement to “review” AIPPA and POSA, seem vague, and South

Africa will likely push for more specific commitments.

However, both sides want to make a deal, and we suspect that

they could find common ground as soon as this weekend. End

Comment.

HARTLEY

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