Zimbabwe and South Africa are currently in negotiations for an upward review of an already existing funding arrangement between their central banks.
This was revealed by Zimbabwe’s Finance Minister Mthuli Ncube on the sidelines of the World Economic Forum (WEF) in Davos, Switzerland.
In an interview with CNBC Africa News, Zimbabwe’s Finance Minister said:
“We are always co-operating with South Africa. We co-operate at different levels, trade and through financial resources flowing in the direction of Zimbabwe for sure and we already have that in place by the way.
“There is already an arrangement between the two central banks in term of inter-central bank flows into Zimbabwe (and) that is not new. We are looking to see if that could be increased so this is normal discussions.
“Those are ongoing we do not know where it will end up in terms of size of resources that we have requested.”
The comments by FM Mthuli come in the wake of reports earlier this week that Earlier this week that South Africa had turned down a request for a $1.2 billion loan from Zimbabwe.
He added:
“Some of the reports that we have seen that South Africa has denied Zimbabwe this and that was a conclusion too soon I must say. We are continuing to have dialogue. The conclusion is premature, we are still having discussions.”
Earlier this week, South African President Cyril Ramaphosa (who is also attending WEF 2019) confirmed that the two countries were in discussions over a possible financial package.
“Yes they are having discussions with us as South Africa about the economic challenges that they are facing. We are involved in serious discussions to see how best any form of assistance can be made available to Zimbabwe,” he is quoted as saying.
“We have not yet reached a conclusion. We have had the Minister of Finance on our side and the Governor of the central bank getting involved (in discussions) with their counterparts on the Zimbabwean side. President (Emmerson) Mnangagwa and myself will meet at a later stage to see what is possible.”
Zimbabwe is looking to clear its external arrears in order to access new funding from multi-lateral creditors in the near-term.