Crisis-struck Zimbabwe will on Monday ask South Africa for a $1 billion loan to buy fuel and food and stave off expulsion from the International Monetary Fund (IMF), a South African newspaper said on Sunday.
The City Press paper, citing government sources, said Zimbabwe's foreign minister Simbarashe Mumbengegwi would meet top South African ministers, including Finance Minister Trevor Manuel, and Reserve Bank Governor Tito Mboweni, on Monday to discuss the possible loan.
South African government spokesman Joel Netshitenzhe said he was not aware of such a meeting, while Zimbabwean officials were not immediately available to comment.
The paper said South Africa's Deputy President Phumzile Mlambo-Ngcuka, who visited Harare on Tuesday, had refused to bail out Zimbabwe unless President Robert Mugabe stopped his demolition of shanty towns, which aid workers say has left hundreds of thousands homeless.
Zimbabwe has temporarily stopped ripping down illegal structures, the official Herald newspaper said on Saturday. City Press said that had paved the way for talks with South Africa on the loan.
The money would also help Zimbabwe, which is battling its worst economic crisis since independence in 1980, pay back loans due to the IMF and avoid expulsion from its ranks.
As of late June Zimbabwe was $306 million in arrears to the IMF, which has halted lending and on February 16 deferred a decision on expelling the African state for six months.
The IMF said last month it expects the economic output of Zimbabwe to fall sharply this year and its budget deficit to widen as food shortages grip the country.
Donors and investors have largely abandoned Zimbabwe due to Mugabe's controversial land reform policy and concerns about human rights abuses and a lack of rule of law.
South Africa has been criticised at home and abroad for its softly-softly approach to Zimbabwe. But some local media say the government has intensified pressure on Mugabe in recent weeks to halt the demolitions, which the government says is aimed at flushing out crime and illegal trading in foreign currency.
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