By Basildon Peta, Sheena Adams and Peter Fabricius
The South African cabinet was on Tuesday expected to consider extending a controversial loan to Zimbabwe in exchange for political and economic
This follows "intensive interactions" by the government with Zimbabwe to help it pull out of its economic nosedive.
Zimbabwean Reserve Bank governor Gideon Gono met South African Reserve Bank governor Tito Mboweni and Treasury officials on Friday.
The government is refusing to confirm or deny that the expected loan is conditional on political and economic reforms by President Robert Mugabe's
government, or other details.
Zimbabwean sources said the loan was needed to enable them to pay for fuel, electricity and food, which have almost run out.
"If this fails, we are facing a major catastrophe," said a Reserve Bank of Zimbabwe official.
He said import cover had almost entirely run out after the central bank paid more than $100-million (about R665-million) for the import of six Chinese
fighter jets and a quarter of that for grain imports.
Sources have said one of the conditions South Africa has imposed for giving the loan is that Zimbabwe stop Operation Murambatsvina, its campaign of
destroying informal shacks and hawkers' kiosks in the cities, which has left thousands of Zimbabweans homeless and destitute.
The Zimbabwean government announced a temporary halt to the campaign on Saturday, without explaining why.
Government spokesperson Joel Net#enzhe said: "There has been intensive interaction with the Zimbabwean government over the last few days.
"These interactions involve discussions about the kind of assistance we can give them to implement a programme of economic recovery and matters
related to the normalisation of the political situation in Zimbabwe," he said.
Any decisions by the "fiscal and monetary authorities" would have to be ratified by the cabinet, "and with a loan, the cabinet would have to take
the decision to parliament", Net#enzhe added.
Zimbabwe's main opposition, the Movement for Democratic Change, said it saw no benefits accruing to Zimbabwe from a rescue package that did not
address the fundamental issues that had led to the country's economic collapse.