South Africa Bails out Zimbabwe

Now we know why they call it the “Cape of Good Hope”!

President Mbeki says South Africa will bail out Zimbabwe in its scheduled IMF payments.

A government spokesman said on Wednesday a loan would allow Zimbabwe to resume IMF payments and prevent their expulsion from the body.

But he dismissed reports the credit could be $1 billion, saying it “could even be as low as one-tenth of that”.

Following a failed harvest, Zimbabwe is suffering food shortages.

It has been short of foreign currency for imports such as fuel for several years.

Mr Mugabe’s critics say his seizure of white-owned land have wrecked the country’s agriculture-based economy.

He blames his problems on a Western plot.

To make matters worse for Mugabe’s people, the Zimbabwean dollar crashed this week in a scramble to import fuel.

The largest crash of the Zimbabwean dollar took place in the past six days as desperate motorists went looking for foreign currency to fund fuel imports.

A week ago the Zimbabwe dollar was trading at about Z$25 000 to US$1 on the parallel market, which is where many manufacturers source foreign currency to fund imports.

On Thursday it had touched Z$45 000 to US$1. The rand was selling at Z$6 000 but buyers were paying Z$7 000. The unofficial exchange rates are available at any street corner from vendors trading covertly opposite hotels frequented by foreign visitors.

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