HARARE, March 25 — Zimbabwean Finance Minister Patrick Chinamasa has held talks here with the visiting Director for Sub-Saharan Africa and the Sahel regions at the German Foreign Office, Georg Schmidt, the first economic engagement between Harare and Berlin in years.

Germany, a member of the European Union, froze political and economic relations with Zimbabwe over a decade ago when the bloc imposed sanctions on Harare.

Chinamasa told journalists after a lengthy meeting with Schmidt here Tuesday that the visit, although exploratory in nature, would serve as a foundation for the restoration of normal ties.

He said the meeting centered on Zimbabwe’s foreign debt, bilateral re-engagement and Harare’s relationship with international financial institutions including the International Monetary Fund (IMF).

“This, to my knowledge, is the first contact that we have had with the Federal Government of Germany since the imposition of sanctions in 2002, so his visit is very significant, it is laying a foundation for restoration of political and economic relations,” he said.

“We owe Germany 739 million US dollars which reflects naturally the (high) level of economic engagement that existed before the sanctions hit us, so the effort that we are now making is to restore that relationship, it is going to be a step by step process, nothing is going to happen overnight.”

Germany is Zimbabwe’s largest creditor.

Chinamasa said the Germans had also agreed to host a technical team from the Ministry of Finance in Berlin.

Speaking at the same occasion, Schmidt, who is in the country for two days, concurred with Chinamasa that his visit would spur re-engagement efforts.

“I think it is always good to come to engage in open dialogue and to see where we stand in our relationship and where we can go in the future,” he said.

He suggested areas in which Zimbabwe could improve on to help increase Foreign Direct Investment including policy consistency. “The general framework and the rule of law is one critical factor for people from the private sector to get involved in the Zimbabwean economy,” he said.

He said Zimbabwe was a country with a lot to offer and had potential to attract more foreign investment.

Schmidt commended Zimbabwe for agreeing to a Staff Monitored Programme (SMP) with the International Monetary Fund (IMF). “I think that the IMF’s direction in the framework of the SMP is a very important step, we are following with great interest and attention what the IMF is doing and whether they can actually report back to all its members that there has been some tangible progress on the ground,” he added.

“So we encourage close co-operation with the IMF and in the future also the other International Financial Institutions which is one of the main conditions for us then to actually also engage in the bilateral debt talks. So the idea of sitting down and talking, I believe, is always an important one,” he said.