European bank looks to finance businesses in Zimbabwe

HARARE - The European Investment Bank said on Thursday it was considering funding private businesses in Zimbabwe despite Harare's $300 million debt to the institution.

"We are here to explore the possibilities to reengage activities in Zimbabwe. We see possibilities with the private sector,"
said Diederick Zambon, who heads the banks division for southern Africa and Indian Ocean.

We are here to explore the possibilities to reengage activities in Zimbabwe. We see possibilities with the private sector.

He told journalists that the private sector was "the backbone of the economy" and crucial to the further development of the country.

The loan facilities will be channelled to small business enterprises including in the agriculture, manufacturing, water and telecommunications sectors.

Zambon stated that Zimbabwe's arrears to the EIB are over $300 million (220 million euros) and that his team would meet with the country's finance minister as well as central bank officials over the debt.

"At the same time we are here to discuss the problem of the arrears and to try to find a positive way forward," he said.

Zimbabwe is battling to rebuild the economy battered by years of political turmoil that saw the seizure of white-owned farms.

The European Union imposed travel bans and asset freezes on long-ruling President Robert Mugabe, his inner circle and linked companies, following elections in 2002 which western observers said were rigged to hand him victory.

The EU lifted most of its sanctions last year but an asset freeze and travel ban remains for the veteran leader.

After winning elections last year Mugabe called for the EU to boost ties with Zimbabwe and the removal of sanctions.

The EU and United States rejected the recent vote on grounds that the polls were not credible.

-AFP