Comesa mulls rescue package for Zimbabwe

VICTORIA FALLS - Africa's COMESA trade bloc is preparing a financial rescue package for Zimbabwe to help the southern African nation to rebuild its shattered economy, a senior official said Thursday.

Finance ministers from Africa's largest trading bloc met to discuss the package ahead of a heads of state summit this weekend in the Zimbabwean resort town of Victoria Falls, said Chungu Mwila, COMESA's director of investment promotion.

"We are working with Zimbabwe as one of our members to see how best we can mobilise funds for the country. Ministers of finance have already met to discuss the proposal," he said, without giving details on their talks.

The 19-member Common Market for Eastern and Southern Africa has commissioned a study to assess how the bloc can help provide funding for Zimbabwean industry, he said.

Currently Zimbabwe's industrial sector is operating at less than 10 percent of its capacity, but the new Finance Minister Tendai Biti hopes to boost the figure to 60 percent by year end.

Zimbabwe's new government has appealed for 8.5 billion dollars (six billion euros) over three years to help revive its shattered economy.

Although most Western nations have adopted a wait and see attitude towards the new government, regional and continental bodies have so far availed more than a billion dollars in private sector loans to help the country recover.

Once a dynamic country, Zimbabwe's economy has contracted by more than 45 percent over the past decade as a result of political and economic instability.

Long-ruling President Robert Mugabe and his erstwhile rival Morgan Tsvangirai formed a unity government in February and have unveiled a plan to revive the economy.

The COMESA summit this weekend is set to launch a new customs union that will harmonise tariffs across a region stretching from Egypt to South Africa.

The bloc is home to 400 million people, with a combined gross domestic product of 350 billion dollars.

COMESA comprises Burundi, Comoros, Djibouti, the Democratic Republic of Congo, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe. - AFP