Zimbabwe loan to be fully repaid by November

The US$23 million loan which Zimbabwe is repaying to Malawi through fuel is expected to be completely recovered through fuel supplies up to November this year, Energy Minister Cassim Chilumpha has said.

Chilumpha told The Business Times in an interview that Zimbabwe has so far re-paid US$5 million worth of fuel to the country.

“As government, our priority was to secure fuel for the country hence we made the arrangement with Zimbabwe to re-pay the US$23 million loan balance through fuel,” said Chilumpha.

He said following a visit he and a team of other officials made to Zimbabwe in May to discuss the loan, Zimbabwe has been supplying fuel to Malawi from the same month of May.

“We are still off-loading consignments,” said Chilumpha.

He said government expects the complete amount of supplies to be delivered to the country by November.

Chilumpha said the challenge, however, is that the whole exercise requires a lot of vehicles for transportation.

He said for the US$5 million worth of fuel already supplied, 40 tankers had to be sourced to transport the fuel.

Chilumpha also said that with the current oil prices on the international market, Malawi is at an advantage in the deal.

“As prices go down on the international market, we will be benefiting from the deal as we will get more fuel. This means reduced local pump prices. However, if the international prices go up before the re-payment is done, then we will be disadvantaged,” he said.

Malawi’s monthly national fuel requirement is estimated at US$30 million.

Zimbabwe obtained a ‘soft’ loan of US$100 million from Malawi in 2007 for buying maize to help deal with critical food shortages in that country.