In a major foreign policy shift, the United Kingdom (UK) is teaming up with Standard Chartered Bank to lend Zimbabwean companies US$100 million, the first direct commercial loan to the country’s private sector in more than 20 years.
In an article published by the Financial Times, Britain’s development finance institution, CDC will provide the loan of US$100 million, a development viewed as a sign of warming of relations between Zimbabwe and the UK since London imposed sanctions in the early 2000.
This development was immediately condemned by the opposition which prefers that foreign investors withhold financial support for President Emmerson Mnangagwa’s administration pending the holding of credible elections this July.
According to the UK-based Financial Times, the loan facility is being arranged by the CDC Group, Britain’s development finance institution, in conjunction with Standard Chartered Bank.
Relations between Harare and London have been improving since Mnangagwa took over from former President Robert Mugabe last November.
The former Zimbabwean leader bitterly fell out with the country’s former coloniser in the early 2000s over his land reform policies and human rights abuses with Mugabe famously telling the UK premier Tony Blair that “… keep your England and let me keep my Zimbabwe.”
The veteran leader was however toppled by a revolt of the military and his own Zanu PF party and the UK has embraced re-engaged efforts by the successor Mnangagwa administration.
CDC’s chief executive Nick O’Donohoe confirmed this by telling the Financial Times that they had been preparing the local deal from the day Mugabe was ousted.
“We think it’s pretty significant,” he said, adding that, “We are not aware of any commitments that have been made by anybody since the change of government.”
“Zimbabwe’s economy has been shattered over the last two decades, yet holds real potential,” O’Donohoe said.
“If a new government in post-election Zimbabwe encourages investment and pro-business policies, Zimbabwe can be one of the great investment success stories of the next decade.”
The Zimbabwean opposition is however not impressed with what it sees as the UK’s pro-Mnangagwa policies, especially ahead of crunch elections expected in July.
“This attempt to put lipstick on a crocodile is most unfortunate,” said opposition MDC Alliance politician Tendai Biti, referring to President Mnangagwa’s nickname.
“The elections are only a few months away. Let’s see the quality of this election first.”
O’Donohoe defended CDC’s decision saying the loans were to the private sector and did not represent an endorsement of the government.
