Categories: Stories

Zimbabwe says China to cancel $40 million debt

China will cancel about $40 million worth of Zimbabwe’s debt due to mature this year and Harare hopes to facilitate use of the yuan currency in its economy as bilateral trade increases, the Southern African country’s finance minister said yesterday.

China has become the largest investor in Zimbabwe, which has been shunned by the West over its human rights record and is struggling to emerge from a deep 1999-2008 recession that forced the government to ditch its own currency in 2009.

Finance Minister Patrick Chinamasa said China and Zimbabwe were negotiating the final amount of debt to be cancelled.

“They (China) said they are cancelling our debts that are maturing this year. Right now, preliminarily, we are coming up with a figure of $40 million,” Chinamasa said in a statement.

In the last five years, Zimbabwe has received more than $1 billion in low interest loans from China, which is Harare’s second largest trading partner after South Africa.

On a rare visit to Harare by a Chinese leader, President Xi Jinping this month witnessed the signing of 10 economic agreements, including a $1 billion loan to expand Zimbabwe’s largest thermal power plant.

Chinamasa said Zimbabwe planned to increase local use of the yuan after the central bank last year added the Chinese currency to a basket of currencies used in Zimbabwe that includes the U.S. dollar, British sterling and the South African rand.

The International Monetary Fund last month admitted the yuan into its benchmark currency basket, a recognition of Beijing as a global economic power.

As a start, Chinamasa said, Chinese tourists could pay for services in yuan and Zimbabwe could use the currency to pay its loans to China. The central banks of the two countries are already negotiating on a yuan clearance system, he said.

“There cannot be a better time to do this. It is now about looking at the modalities, specific sectors and how it can be done,” Chinamasa said.- The Source

(40 VIEWS)

This post was last modified on %s = human-readable time difference 6:15 am

Charles Rukuni

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

Recent Posts

Can the ZiG sustain its rally against the US dollar?

Zimbabwe’s battered currency, the Zimbabwe Gold, which was under attack until the central bank devalued…

November 10, 2024

Will Mnangagwa go against the trend in the region?

Plans by the ruling Zimbabwe African National Union-Patriotic Front to push President Emmerson Mnangagwa to…

October 22, 2024

The Zimbabwe government and not saboteurs sabotaging ZiG

The Zimbabwe government’s insatiable demand for money to satisfy its own needs, which has exceeded…

October 20, 2024

The Zimbabwe Gold will regain its value if the government does this…

Economist Eddie Cross says the Zimbabwe Gold (ZiG) will regain its value if the government…

October 16, 2024

Is Harare the least democratic province in Zimbabwe?

Zimbabwe’s capital, Harare, which is a metropolitan province, is the least democratic province in the…

October 11, 2024

Zimbabweans against extension of presidential term in office

Nearly 80% of Zimbabweans are against the extension of the president’s term in office, according…

October 11, 2024