Although South Africa can technically afford to give Zimbabwe the R6-billion that Prime Minister Morgan Tsvangirai has reportedly asked for, it would have to be part of a broader financial bail-out package if South Africa does not want to throw good money after bad.
Yet assistance from other countries has not been forthcoming as potential lenders are not convinced that Zimbabwe is on a real road of change while Robert Mugabe still holds power.
Stanlib economist Kevin Lings says the national budget does make provision for a contingency reserve, which this year is budgeted at, coincidentally, R6-billion. This money is put aside each year in case of a natural disaster such as floods where government needs to provide urgent assistance to its citizens.
Lings says government did indicate last year that this reserve could be used for other types of disasters when it considered using the reserve as an emergency bail-out for Eskom. Zimbabwe's case could be argued as a disaster, which has a significant impact on South Africa's financial and political stability, but this would leave South Africa short, should natural disasters hit our shores... - M&G
Yet assistance from other countries has not been forthcoming as potential lenders are not convinced that Zimbabwe is on a real road of change while Robert Mugabe still holds power.
Stanlib economist Kevin Lings says the national budget does make provision for a contingency reserve, which this year is budgeted at, coincidentally, R6-billion. This money is put aside each year in case of a natural disaster such as floods where government needs to provide urgent assistance to its citizens.
Lings says government did indicate last year that this reserve could be used for other types of disasters when it considered using the reserve as an emergency bail-out for Eskom. Zimbabwe's case could be argued as a disaster, which has a significant impact on South Africa's financial and political stability, but this would leave South Africa short, should natural disasters hit our shores... - M&G
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