July 11, 2010 / 7:46 AM / 9 years ago

INTERVIEW-Zimbabwe confident donors will open aid taps

* New UK government looking at infrastructure aid-minister

* Minister says new local ownership rules due soon

* Says diamonds will be sold through certification scheme

By Adrian Croft

LONDON, July 10 (Reuters) - International donors could soon approve large-scale aid to Zimbabwe to help it repair broken infrastructure and rebuild its shattered economy, Deputy Prime Minister Thokozani Khupe says.

Western governments give humanitarian aid to Zimbabwe but have been reluctant to grant significant development aid until they see more evidence of reforms being implemented by the unity government that took power last year.

But Khupe, vice-president of Prime Minister Morgan Tsvangirai’s Movement for Democratic Change (MDC), was hopeful of a change in stance after talks in London with ministers from Britain’s two-month-old coalition government.

"They want to expand to things like infrastructural development. This is what they are trying to do in Zimbabwe because they have realised that humanitarian support alone will not help us. It is important that we grow our economy," Khupe told Reuters in an interview on Friday evening.

She said it was an international, not just a British, plan.

"It is everybody, the European Union and everybody else. They are also willing to assist Zimbabwe. The United States as well," she said after speaking at the ZG Club, a group promoting business links with Zimbabwe.

She said she was "very confident" of a large-scale international financing package for Zimbabwe soon, although she could not put a figure on it.

Khupe said she met Henry Bellingham, the Foreign Office minister responsible for Africa, and junior development minister Stephen O’Brien during her visit to London.

Once seen as one of Africa’s most promising countries, Zimbabwe’s economy collapsed under the rule of President Robert Mugabe, in power since independence from Britain in 1980.

Relations with Zimbabwe were strained under Britain’s previous Labour government, which accused Mugabe of disastrous policies such as the often violent seizure of white farms to resettle blacks, electoral fraud and rights abuses.


Mugabe was last year forced into a power-sharing government with arch-rival Tsvangirai after a political crisis sparked by a disputed general election in 2008.

Khupe said she was very confident another general election would be held in Zimbabwe by the end of next year and very confident the MDC would win it.

Britain’s new government said this week it was reviewing its aid programmes around the world, including that of Zimbabwe.

In the meantime, it said it would continue to help the poorest Zimbabweans, support the fight against AIDS and promote economic reform. British aid totalled 60 million pounds ($91 million) in the fiscal year ended in April.

Britain’s new International Development Secretary Andrew Mitchell told Reuters in March, when still in opposition, that once the conditions were right he wanted Britain to lead an international development initiative in Zimbabwe.

Some potential investors in Zimbabwe have been spooked by a law requiring foreign-owned firms, including mines and banks, with assets over $500,000 to sell at least 51 percent of their shares to local black investors within five years.

Khupe said that, under regulations she expected to be finalised soon, the government had changed the rules. Shares would no longer have to be "ceded" to local investors, but sold at market value. Different industrial sectors would discuss what percentage of shares must be sold and how long firms would have to do it, she said.

Khupe said that the Zimbabwean government had agreed that diamonds from its Marange fields would only be sold under the Kimberley process — a certification scheme aimed at preventing the diamond trade from financing violence.

Mines Minister Obert Mpofu said last month Zimbabwe planned to begin selling diamond stockpiles from Marange immediately, whether or not regulators gave the go-ahead.

"We have resolved that diamonds are only going to be sold under the (Kimberley) process," Khupe said. "By so doing, we are guaranteed of fetching more money than if we try to sell those diamonds clandestinely or using other ways and means." (Editing by Jon Hemming)

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