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Home > HOME > Zimbabwe, China sign US$5 billion deal

Zimbabwe, China sign US$5 billion deal


Ralph Nkomo

Fri, 03 Jul 2009 01:16:00 +0000




LOCAL Government, Urban and Rural Development Minister, Ignatius Chombo (left), Finance Minister Tendai Biti, outgoing Chinese Ambassador to Zimbabwe Yuan Nansheng, Higher and Tertiary Education Minister, Stan Mudenge and Industry and Commerce Minister Welshman Ncube (far right) pose in front of one of the 173, 20 tonne containers used to ferry 4 000 tonnes of soya bean seed donated to Government by the Chinese government. The seed was officially handed over by Mr Nansheng to Minister Biti at a function held at Olivine Industries on Tuesday

ZIMBABWE and China have signed a US$5 billion loan deal securing half of the amount the inclusive Government needs in delivering its Short Term Emergency Recovery Programme (Sterp).

The deal becomes the largest deal that has ever been signed between the two countries and is secured on various mining and infrsatructural development rights.

Sources in Harare say Finance minister Tendai Biti and Reserve Bank officials on June 8 signed a Memorandum of Understanding (MoU) with China Exim Bank (CEB) guaranteeing the loan.

"They signed a large package of documents, including those in the mining industry and infrastructure development, in Harare on June 8," says our source in government.

“It became possible owing to the use of the mechanism that we created with the leader of the People’s Republic of China some years ago.” 

CEB is the export and credit guarantee agency of the Chinese government in Africa. The bank has played an important role in fostering the rapid expansion of Chinese trade and investment in Africa.

Under the deal Zimbabwe will get US$5 billion from CEB and in return the Chinese get some equity in a US$40 billion platinum concession. The actual size of the stake still remains undisclosed.

The loan will, in line with the Sterp program, be used to boost capacity in agriculture and other key sectors such as mining, tourism, construction and public works.

Prime Minister Morgan Tsvangirai this week announced that Zimbabwe had secured a US$950 million credit lines from the Chinese government. The credit line is separate from the platinum-backed loan.

China also donated 4,000 tonnes of soyabean this week (see picture above). The consignment was handed over to Olivine Industries whcih has entered a vegetable oil processing deal with Government.

The inclusive Government has separately secured about US$3 billion since it came into office in February, mostly from African governments and institutions.

The West has has not been forthcoming with aid preferring to adopt a wait-and-see approach until "certain benchmarks" are achieved by the inclusive Government. 

Tsvangirai recently toured Western capitals seeking the easing of sanctions against Zimbabwe and in search of money, but his spokesman James Maridadi said the trip had brought home pledges of a modest US$200 million.

On Tuesday this week he inflated that figure and said US$500 million was raised, saying the breakdown would soon be made public by his office.

The US$5 billion deal has been kept under wraps as underwriters complete the necessary legal paperwork.

China’s trade, investment and aid activities in Africa have been growing rapidly over the past decade.

Chinese aid to Africa totaled $5.75 billion in 2006, and China the world's third largest food aid contributor. Trade between China and Africa has grown tenfold since 1999, reaching $56 billion in 2006.

By September 2006, there were 259 China Exim projects in 36 African countries, 79 percent of which committed to infrastructure development, such as railways (Benguela and Port Sudan), dams (Merowe in Sudan; Bui in Ghana; and Mphanda Nkuwa in Zambia), thermal power plants (Nigeria and Sudan), oil facilities (Nigeria), and copper mines (Congo and Zambia).


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ARTICLE ATTACHMENTS

READER OPINIONS

goodpeople n/a
Subject: n/a
Tue, 07 Jul 2009 12:10:22
N/A, it is hard to reply to people that do not have the grey matter to even give themselves a name to communicate with.
I am the son of an Elder her in Australia and the problem with Koories is that we waste the money and energy on a few instead of it helping all. The problem here is that it has become a full blood and half cast battle of trying to work out o medium.
Compared to Zim the Koories are 100 years in advance and they are a whole of what makes the country!
To many idiots like yourself on here have never seen what the real world is about and how good most people really are around the world no matter there colour or religion.
Zim is now being held back by those more racist than any in history. Everyone has there right but those in power in Zim now think they are empowered to have more rights than anyone
They are kidding themselves and destroying there country and killing many people in the process.
The world is Zims oyster, only if Zim sees others as they do there own.

Mugabe and regime has destroyed a country as quick as anyone in the history of the world. Mugabe and regime should have no arrogance or even a voice on the world stage because they are as bad as any government or ruler in the worlds history at destroying with ignorance, a prosperous and very able country.
Mugabe and regime has stolen in 20 years more from Zim, than anyone or country could ever hope to in 500 years.
People that think mugabe and regime have note stripped Zim bare are kidding themselves and the good people of Zim that are Zim.

Question, how can mugabe and regime live{if you think they dont your an idiot} an opulent life style over and above the leaders of the best financial countries in the world and earn more than the leaders of the top 5 countries??
Mugabe and regime has bled Zim dry for years, those that think otherwise please tell me how in a poor country they are more wealthy than any other public servant!


N/A N/A
Subject: N/A
Mon, 06 Jul 2009 16:49:21
Good people -You are an Australian who writes a lot of twaddle about Zimbabwe. If Zimbabwe decides to do deals with China , what the heck has that got to do with you? You country Australia treats the native Aborigins terribly. Why look at other countries specks in their eyes whilst missing the log in your country's eye.


goodpeople n/a
Subject: n/a
Sun, 05 Jul 2009 04:43:35
Mugabe has done nothing except get a loan and had to secure it with Zim assets. He had to offer mega bargains on raw materials to get it and he had to abolish the 51% indigenous ownership farce.
Mugabe has totally sold out to try and save face. China is lending the money that goes with not only and interest rate but also many bargain basement priced commodities.
Morgan was given, yes given money and all mugabe can get is $500k worth of soy beans and a loan to put Zim further in debt. Mugabe does not mind as he will be dead before the debt is repaid. Mugabe does not mind he is moving Zim's recovery back another 20 years so now Zim has no chance at all of recovering financially for 40-100 years.
Unless you are stupid or can not see the racist policies in Zim and the racist opinions of many are moving Zim further and further behind.

Move forward with thinking and action, not go back 100 years in opinion and policy if you want to succeed in today's world.

China will now own Zim and they are not as fair or as caring as the West, if you think differently just look how they treat there own people and there workers!
Zim is now deeper in debt than it has ever been in history and the owners of the debt don't treat nicely the people that default on there loans, they just take much more of the Zim assets with each default!
I think we have just seen the total sell out of Zim and it will take the west in the future to stop China totally owning and controlling Zim.
Nice work Mugarbage and regime, you just sold Zim for personal gain with no thought of the future.

Mark my words, Zim is now in major trouble and finished as there own country as there assets are now in China's hands.
I have seen some major mistakes by countries over the last 500 years but this would have to be the worst mistake ever made.
China is all business and will never care for anyone even there own!
Welcome to Beijzim, sucked in mugabe and supporters and i am Hugely sorry to the real and good people of Zim that this has been aloud to happen and you have not been able to have control of it because of the mugabe and regime using force to make you lose your voice!

Anyone that thinks Zim has not been sold for a song, is kidding themselves and is an idiot of the greatest order.After noticing many on the posts on here, i think the later is the order of the day for most!


Omugabe Dziva@sanandresano.com
Subject: Look Inward & Look East for Self-development, Zim Patriots!
Sun, 05 Jul 2009 01:16:38
Much gratitude to the RELIABLE Chinese FRIENDS of Africans.

Down with the relentless and racist European ENEMIES of Africans!

todd kidd

I know that you mean well.
However, with US racist and sub par educational system, you are inevitably inclined to exhibit the negative mindset of being 'wary of China' without any HISTORICAL EVIDENCE of 'bad blood' between China and Africa?

For your information and others who mean well but are 'wary', China has a 5,000-year culture from which to collect evidence and make intelligent judgment regarding the international actions of Chinese people with regard to Africans or with others?

The Chinese build their 'Great Wall' to emphasize the fact that Chinese are historically 'inward looking', which is the wise way for any society to live!

Being of a oppressive and racist eurocentric society, you are taught to hate or be suspicious of Chinese and other non-europeans.

Your challenge is to collect historical evidence of Chinese behavior with respect to African nations; and then come to the most intelligent conclusion.

In other words, judge the Chinese by their historical ACTIONS, and not by fears instilled by racist and evil Europeans.

Chinese have neither colonized nor enslaved nor lead with its military like the destructive Europeans.
So it is foolish to judge China according to the devils of Europe!


Chokwadi n/a
Subject: Zimbabwe, China sign US$5 billion deal
Sat, 04 Jul 2009 00:16:11
Robert Mugabe has once again outfoxed the MDC turncoats. Chegorero vamwe vachashaya nepekutarisa.

Ckeck-out Nathaniel Manheru's article in the Saturday Herald which is concisely and conveniently entitled: China: When Bullets begin to flower. The guy is back.

Ndabvuma hangu MaChina vahombe. Ichi Ndochokwadi uchida usingade.


gux galavantor01@yahoo.com
Subject: good or bad deal
Fri, 03 Jul 2009 23:20:05
I am not really worried abt the type of the deal that was struck, but i know that in a resourceful nation like Zim good fund management will result in a positive multiplier effect and i bet you my last dollar, if that $5b is used constructively our loses will be too minor to count.


Son of the Soil n/a
Subject: Better times beckon.
Fri, 03 Jul 2009 23:02:36
Finally Zimbabwe will be back and a trillion thanks to our Chinese friends. Such generosity deserves maximum respect.

What a spectacular turn of events. Now I understand what Nathaniel Manheru meant in one of his parting shots when he said Zanu PF and Zimbabwe would not be underdogs for long.

And hey what a spectacular contrast with the Western fellows. The Chinese came in with such a huge stimulus package with absolutely no political strings and most importantly without the ...Gono and Tomana must go and Benchmarks mantra... from the West.

Is China not part of the international community? I wonder.

The west refused to lift the sanctions and now China is busting them left, right and centre. Zimbabwe can actually gain more as it now has many partners outside of the west. The resource hungry west can ignore Zimbabwe at its own peril.

Now as Zimbabweans, we should refocus our strategies, re-energise and work together in the spirit of inclusivity as espoused by the GPA.

My maximum respect to the Chinese and congratulations Zimbabwe!!!

Chana chevhu


kamba n/a
Subject: n/a
Fri, 03 Jul 2009 20:30:42
first of all i would like to thank them for their help.guys you can say want you want, but zim need people like them.we can not do anything without money, we had the minerals for ever, but we need money to get them in our hands.again i would like to thank them.don't forget dealing with the west they want everything and they even want us to talk like them and then they know they are in full controll


todd kidd toddkidd67@yahoo.com
Subject: loan
Fri, 03 Jul 2009 16:52:11
I am a supporter of President Mugabe but something about this deal strikes me as being a bad deal for Zimbabwe. I don't trust the WEST but I am also wary of the Chinese and so should all Zimbabweans. I don't mind doing business with the Chinese but I don't want the country to lose it's precious natural resouces due to this loan. China should not own Zimbabwe and this is what I'm afraid is going to happen. The government of Zimbabwe needs to inform the population of what this deal really entails and how it will affect them.
I trust the GNU looked out for the people of Zimbabwe on this one because Africa does not need another colonial master. I'm black American and I'm just trying to look out for the best interest of my people. Africa for Africans. Todd Kidd, New Orleans.


superT n/a
Subject: Zimbabwe, China sign US$5 billion deal
Fri, 03 Jul 2009 16:20:06
While I commend the whooping deal at Prima Facie, I will hold back my excitement until the actual size of the stake is disclosed.

We need to know terms of the deal as in the percentage stake the Chinese will claim in the US$40 billion platinum reserve. In other words how the proceeds will be shared between Zimbabwe and China (shareholding structure).

We should be careful not to sign a deal that could be heavily skewed in favour of the Chinese government. A skewed deal could potentially prejudice the country of a great deal of money.

We need to learn a lesson from our previous relations with the West and avoid exploitative ventures that could leave us sulking at the end of the day. Yes we may be bankrupt but that should not make us desperate.

If the deal is fairly structured then it is, indeed, a huge deal that demonstrates China's unconditional business-like attitude towards Zimbabwe that will help Africa's giant to claim its rightful place in the African and Global economy.

This would be a thundering vindication of Zanu PF's Look East Policy that some unashamed political upstarts are now desperately trying, in vain, to hijack. Real developmental money is in the East. We await news from Russia and Malaysia. The West has no money at present.

Let us hear what those in the west will say on this one. If the deal comes to fruition then that means our all-weather-friend China will have poured in close to a massive US$6billion whilst Madzishamwari from West can only afford paltry pledges amounting to US$200 million or is it US$500million as we are now being coerced to believe?

I hope this deal lives up to expectations and translates into an All-Weather-Fair Deals/Trade-Friendship relationship. It will be a case of “China to the rescue again” following on from their assistance during the liberation war.

This will be a direct slap in the face of Brown in London and the falsely over-rated Obama in Washington DC.

As China flexes its economic muscle and stamps its clout worldwide, Zimbabwe should immensely benefit.

Long live China-Zimbabwe symbiotic friendship.

Ndatenda Hangu/ Siyabonga


Pitamba itainondo@yahoo.com
Subject: This is a Loan, not Donation!
Fri, 03 Jul 2009 16:18:33
We always need to wary of loans. While the West use democracy and human rights as their strings, we need to understand what the Chines use as strings, lest we find ourselves stripped off of our precious natural resources. The Chinese do not have love. They are purely for business. Let's watch our minerals. We do not want to cry tomorrow.


jm n/a
Subject: humbled
Fri, 03 Jul 2009 15:39:28
i will be eating humble pie tonight............thankyou China we the people here in Zimbabwe are grateful and as a patriotic Zim man I salute you...........MASIYA PHAMBILI............


Jason jm1098@hotmail.com
Subject: Zimbabwe's New Colonial Masters
Fri, 03 Jul 2009 14:55:25
Look to the East they say! This is an example of how Zimbabweans have a real lack of education and have not learnt a thing the past 29 years. They have just signed a deal with China (their new masters) worth US$5billion and in return China gets 50% equity of the country's platinum reseverves worth US$40billion, that means they make a massive profit of US$15billion!!! I must not foget the soya beans of course. Well done Zimbabwe - a country of brain surgeons and rocket scientists!!!


n/a n/a
Subject: n/a
Fri, 03 Jul 2009 12:57:39
When it really mattered, China has delivered.What has happened to our fairweather friends in the West? We told you on numerous occassions that it is the East that has money and not the West.Zanu-PF was right in its Look East policy and MDC-T was misguided in its Look West policy.
Viva Zimbabwe and viva China.


Mhofeti pasizw@yahoo.co.uk
Subject: Zimbabwe, China sign US$5 billion deal
Fri, 03 Jul 2009 10:49:37
...Chinese aid to Africa totaled $5.75 billion in 2006.
Just wondering about a case of being well connected for the whole world to hear when someone donates US$200 million BUT not so well connected for the whole world to hear when someone donates US$1 billion. All that we know is not all there is to know. From experience even the handing over 4000 tonnes of soya beans would have been preceded by a lecture on human rights at a mother of all press conferences. Having said that, you don't look a gift horse into the mouth, do you? Thank you China.



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