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China to Fund Zimbabwe’s “Comprehensive Financial Package”

The government of Zimbabwe is looking to China to help fund its $27 billion plan to rebuild its economy. The Africa Report wrote on Wednesday that this fund would be more than twice the size of the economy of the impoverished southern African nation. The five-year plan will seek to improve basic services and revitalize the slowing economy.

On February 11, Zimbabwe’s Finance and Economic Development Minister Patrick Chinamasa and the Chinese Ambassador to Zimbabwe Lin Lin had signed the deal in Harare. As reported in People’s Daily, it included the loan amount of $23 million earmarked for the construction of clinics, primary and secondary schools in resettled areas acquired under the land reform program, as well as boreholes drilling and acquiring meteorological equipment.

Not revealing details, Chinamasa, who visited Beijing last month, said, "The government of the People’s Republic of China and the government of Zimbabwe are working towards a comprehensive financial package. (We) have committed ourselves to finalizing the matter within three months."

Zimbabwe had not been able to obtain funds from western governments and funding institutions such as the World Bank, as it had previously failed to repay billions of dollars in debt. Since 2005, the nation has adopted a “Look East” policy as a result, relying increasingly on emerging Asian economies to offset sanctions from traditional Western partners, People’s Daily reported.

China, on the other hand, is interested in the rich mineral resources in Zimbabwe, including the world’s second largest reserves of platinum, huge deposits of gold, alluvial diamonds, coal, and chrome. China had previously loaned nearly $700 million to Zimbabwe, in March 2011, the biggest package to date. In addition, last November, China’s Export Import Bank agreed to lend Zimbabwe $320 million to expand its Kariba hydro-power plant.

Source: BBC Chinese, February 11, 2014