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Zimbabwe: Mugabe Solicits Oil From Nguema
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Business Day (Johannesburg)
30 August 2007
Posted to the web 30 August 2007
Dumisani Muleya
Johannesburg
ZIMBABWEAN President Robert Mugabe solicited more oil from visiting Equatorial Guinea leader Teodoro Obiang Nguema yesterday at the start of Nguema's four-day official tour, to alleviate severe shortages of many commodities intensified by a recent price freeze.
Official sources said Mugabe and Nguema, who will open the Zimbabwe Agricultural Show tomorrow , held talks in Harare yesterday as part of the oil-rich western African state president's state visit.
Sources said the private talks between the two largely focused on fuel. The two leaders were also expected to discuss the fate of former British Special Air Services officer Simon Mann, who is facing extradition to Equatorial Guinea for allegedly trying to overthrow Nguema in 2004. The issue of Mann is understood to be connected with potential fuel supplies. .
If Zimbabwe extradites Mann to face charges of treason and a possible life sentence at the notorious Black Beach prison, Equatorial Guinea would provide fuel supplies on favourable terms.
Zimbabwe consumes 3,5-million litres of diesel, 3-million litres of petrol and 5-million litres of jet A1 fuel a day. This requires $130m a month.
Last month, Mugabe dispatched a high-powered delegation that included Energy and Power Development Minister Mike Nyambuya and Reserve Bank governor Gideon Gono to hunt for fuel in Equatorial Guinea.
This followed acute shortages in the market caused by energy price controls and cancellation of fuel coupons by the government. The delegation did not complete its negotiations, which Mugabe is now expected to finalise.
The government is said to have already received fuel worth $24m from Equatorial Guinea, which it is unable to pay for, and now wants to use diamond loot to amortise the debt.
Zimbabwe wants to use diamonds controversially extracted from disputed mining concessions to pay for fuel.
Zimbabwe is withering under an economic meltdown precipitated by the seizure of white-owned farms in 2000 and the destruction of agriculture, the economic base. The economic crisis is characterised by acute shortages of foreign exchange, fuel, food, and basic commodities.
Forex shortages are caused by policy failures, poor export performance, the drying up of donor financial aid and foreign direct investment and the lack of balance of payments support.
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Zimbabwe is also unable to get or renew lines of credit due to the high political risk spawned by a breakdown in the rule of law and assault on property rights. Targeted sanctions imposed by the west on Mugabe and his cronies have compounded the situation. Mugabe has been trying to secure financial aid from China, Russia and South Korea without success. Nguema is apparently willing to help him.
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