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

ZiG loses steam, falls against US dollar for five consecutive days

The Zimbabwe Gold fell against the United States dollar for five consecutive days from Monday…

November 22, 2024

Indian think tank says Starlink is a wolf in sheep’s clothing

An Indian think tank has described Starlink, a satellite internet service provider which recently entered…

November 18, 2024

ZiG firms against US dollar for 10 days running but people still do not have confidence in the currency

Zimbabwe’s new currency, the Zimbabwe Gold (ZiG), firmed against the United States dollars for 10…

November 16, 2024

Zimbabwe among the top countries with the widest gap between the rich and poor

Zimbabwe is among the top 30 countries in the world with the widest gap between…

November 14, 2024

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