Turned away by Western governments and international institutions, the government of Zimbabwe is looking to China to help fund its $27 billion plan to rebuild its economy.
That fund is more than twice the size of the economy of the impoverished southern African nation, the Africa Report wrote on Wednesday. The five-year plan will seek to improve basic services and revitalize the slowing economy.
While the agreement has not been officially inked, People’s Daily reported on Wednesday that the loan will amount to $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.
The finance minister of Zimbabwe, Patrick Chinamasa, traveled to Beijing for a week last month to negotiate for money the government needs.
"During the visit we agreed that the government of the People's Republic of China and the government of Zimbabwe are working towards a comprehensive financial package and (we) committed ourselves to finalizing the matter within three months," Chinamasa said.
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 resource in Zimbabwe, including the world’s second largest reserves of platinum, huge deposits of gold, alluvial diamonds, coal and chrome, according to the Africa Report.
China had previously lent nearly $700 million in loans to Zimbabwe, in March 2011, the biggest package to date. In addition, China’s Export Import Bank agreed to lend Zimbabwe $320 million to expand its Kariba hydro-power plant last November.
In 2013, bilateral trade between the two countries has grown over $1.2 billion, and China has become Zimbabwe’s top foreign investor, according to People’s Daily.