Zimbabwe

One of Zimbabwe's smaller banks, owned by a senior minister in President Robert Mugabe's government, has surrendered its licence because it was insolvent and had a high level of non-performing loans, two sources at the bank said on Thursday. Unlisted Allied Bank, majority-owned by Transport Minister Obert Mpofu, has been struggling to meet capitalisation requirements and volunteered to close.

The IMF told Zimbabwe to contain public-sector pay demands to avoid stoking inflation and reiterated it would not resume lending until Harare clears its arrears, a Finance Ministry official said Thursday, Times Live reported on a Reuters story. Public servants, who get an average of US$200 a month, are pressing for a doubling of their pay, putting pressure on authorities already spending 70% of revenue on remuneration. An IMF team in Harare for annual talks with the government has warned that pay demands could push Zimbabwe back into an inflation spiral. The team ends its mission next Friday.

Zimbabwe’s prime minister, Morgan Tsvangirai, said Tuesday that an official he had appointed had secured lines of credit worth $950 million from China, President Robert Mugabe’s longtime ally, The New York Times reported. Mr. Mugabe’s party has mocked Mr. Tsvangirai for failing to bring home much aid from his three-week tour of the United States and Europe. Zimbabwe’s government — a virtually bankrupt contraption led by Mr. Mugabe and his rival, Mr. Tsvangirai — needs an estimated $8 billion to rebuild the country’s ruined economy.

Zimbabwean President Robert Mugabe is preparing to take over key businesses in mining, banking and manufacturing as his international isolation deepens, two members of the ruling party’s politburo said. The 84-year-old leader said two days ago that he may form an “Economic Revolutionary Council” to overcome sanctions, the officials said. Mugabe’s plans suggest he doesn’t intend to bow to calls to step down as the economy collapses and cholera spreads.