ReliefWeb

Johannesburg (dpa) - South Africa plans to throw a financial lifeline to Zimbabwe, its ailing northern neighbour, according to a newspaper report in the wake of a meeting between representatives from the two countries.

South Africa's national Business Day on Monday said that Zimbabwe was "likely to soon obtain a line of credit for electricity, petrol and food'' in the region of "hundreds of millions'' of rands (one million rand = 150,000 dollars).

The South African Reserve Bank confirmed that its governor had participated in a meeting to discuss the issue with representatives of the Harare government and the South African finance minister Trevor Manuel.

A government spokesman declined to comment on the meeting or confirm additional reports that the meeting included discussion on a loan of one billion dollars as assistance to Zimbabwe.

"It is quite possible that the discussions covered possible assistance that Zimbabwe required,'' Joel Netshitenzhe, the head of the government's communications service was quoted as saying in a Sapa report on Monday.

He added, "But no agreement on his matter has been reached''. Netshitenzhe cited "economic recovery'' and "political normalization'' as principles and considerations for a loan to Zimbabwe.

South Africa's deputy president Phumzile Mlambo-Ngcuka had travelled to Zimbabwe to hold talks - reportedly with President Robert Mugabe and his deputy Joyce Mujuru, he told the agency.

South Africa has been criticized by the international community for failing to act decisively against Zimbabwe. Its approach of "quiet diplomacy'' has been strongly criticized as ineffective.

Mugabe, widely blamed for the economic crisis in his country, has earned further wide condemnation for his latest controversial campaign.

An estimated 300,000 people have been driven from their homes in urban areas in recent weeks as part of what he says is a cleanup campaign. dpa bve wjh