Zimbabwe fails to pay back US$100m loan from Malawi

(No Ratings Yet)

 Loading ...

By MIKE MAKOMO

Published: November 29, 2009

By Chifundo Malidadi

LILONGWE — Malawian President Bingu wa Mutharika is under fire for lending Zimbabwe US$100 million in June 2007 when the tiny southern African country has so many development projects at a standstill owing to shortage of cash.

To make matters worse, beleaguered Zimbabwe is failing to pay back the loan. It should have finished paying this month, according to Wilson Banda, the general manager of the Reserve Bank of Malawi. The loan was to pay for the maize Zimbabwe imported from Malawi in 2007.

Since then, Zimbabwe has been importing maize from Malawi, apart from other countries in the region. This year, it imported 40 000 tonnes of maize from the tiny southern African country.

Opposition politician, Brown Mpinganjira fired a broadside at Mutharika: “It beggars belief that a poor country like Malawi which celebrates when it receives amounts as low as US$20 million from the IMF or the World Bank goes on to lend US$100 million a country like Zimbabwe, given its disastrous economic policies. Surely, this is the country that doesn’t have that kind of cash.

“To put it mildly, that was sheer madness. It was wrong. It should not have happened,” Mpinganjira told Capital Radio, a privately-run radio station in Malawi over the weekend.

The money, lent to Zimbabwe through the Reserve Bank of Malawi, was guaranteed by the Malawi government on the basis of a personal relationship between Mutharika and Zimbabwe’s ageing President Robert Mugabe.

Mutharika, whose late wife Ethel was born and bred in Zimbabwe, has a sprawling farm in Chakari, near Chegutu which was spared Mugabe’s vicious land grab.

Mugabe staring defeat in the face before the 2000 elections, seized white-owned commercial farms and parcelled them out to his disenchanted supporters plunging the country which was once the region’s breadbasket into a basket case.

More than 4 000 commercial farmers fled Zimbabwe into neighbouring countries, including Malawi, boosting agricultural production in those states. Zimbabwe, since 2000, has been failing to feed itself and has been depending on international aid and food imports.