Zimbabwe: Harare approaches South African bank for fuel money

HARARE -- The cash-strapped Zimbabwe government has approached South Africa's Rand Merchant Bank (RMB) for a fuel supply facility believed to run into hundreds of millions of United States dollars, ZimOnline has learnt.
A senior Reserve Bank of Zimbabwe (RBZ) executive official, who cannot be named for professional reasons, said RBZ officials and representatives of the South African bank met in Harare last week to "tie up the deal" that will see Harare able to import desperately needed petrol and diesel. Zimbabwe Ministry of Finance officials also attended the talks between the RBZ and the South African bank.

"We approached Rand Merchant Bank to look into the possibility of helping the RBZ with a facility for the importation of petroleum products." said the official, adding that this was not the first time the Zimbabwe central bank had dealt sought financing from the RMB or other South African banks.

"We have done this on a regular basis in other products such as food imports and capital equipment," said the official who however said he was not in a position to declined to disclose the exact amounts the RBZ had asked for and the duration of the fuel facility.

Zimbabwe requires close to US$100 million a month to import petroleum products.

It was not possible to get immediately get comment on the matter from the South African merchant bank.

Fuel, food, essential medical drugs, electricity and almost every other basic survival commodity is short supply in Zimbabwe because there is not hard cash to pay foreign suppliers.

Previous fuel supply deals with Libyan, Iranian and South African oil firms have collapsed after Harare failed to pay.

As at the end of last year, the Zimbabwe government through its oil utility, National Oil Company of Zimbabwe, owed a total US$171 million to international oil firms.

A list of the state oil company's foreign debtors independently obtained by ZimOnline showed that as at December 2004 it owed LAFB of Libya US$58 million, BP South Africa US$14 million, Kuwait IPG US$58 million, Engen US$10 million, Caltex US$8 million, Exxor/Sanstorm US$8 million, Nordea Bank US$10 million, and PTA US$5 million.

The South African government has offered Zimbabwe a US$500 million loan to pay off outstanding debts with the International Monetary Fund and to buy fuel and food. But Harare is stalling on the offer unhappy about demands by Pretoria to commit to implement a raft of political and economic reforms before it could receive the money. ZimOnline.