ED allays fears concerning Chinese loans

by Staff writer

President Emmerson Mnagagwa, on Saturday allayed fears that loans advanced to the country by its all-weather friend, China, might be difficult to repay resulting in the country’s economic woes worsening. He was addressing Zimbabweans resident in the United States, with the aim of enticing the latter to come and invest back home.

The President said loans from China were being used to finance projects that would generate revenue to repay the loans without taking money from treasury.

“During the period of isolation, very few countries outside the West assisted us. Some of the notable countries that came to our assistance are China, India, Brazil, Russia and Malaysia… When things are good you don’t then forget your friends who stood with you during bad times – but you don’t sell your country because somebody stood by you during bad times.” said the President.

The President gave an example of the US$1.2 Billion he sourced from China in April for the expansion of Hwange Thermal Power Station, saying the 600 Megawatts to be realized from the project in 18 to 24 months’ time will help repay the loan for the next 15 years without drawing from the fiscus.

He revealed that the Kariba South Power Station deal had similar conditions where revenue from the the 300 megawatts of electricity being generated is repaying the loan.

“The difference is that if we didn’t have that (Kariba South power station) we would have been importing the 300 megawatts from South Africa and paying South Africa. But now we have the assert in Zimbabwe, even when we finish paying the loan…the assert remains with us and we continue to get electricity.

So, I don’t see any danger where you have a project, which becomes productive in terms of revenue streams to pay for itself.” said the president.

The fears concerning the impact the Chinese loans might have on the future of Zimbabwe are emanating from unofficial reports that Zambia lost some of its vital installation to China after falling to pay back loans.