By Basildon Peta & Peta Thornycroft

As a draft agreement between South Africa and Zimbabwe on a R6-billion rescue package gathers dust on President Robert Mugabe's desk, Zimbabwe's stock exchange failed to trade for the third trading day in a row on Monday because there are no buyers for the deluge of shares on offer.

Finance Minister Herbert Murerwa announced a 10 percent capital gains tax on traded shares in a supplementary budget on Thursday, up by 7,5 percent. Stockbrokers estimated they would have to sell three trillion shares to cover the new tax.

Meanwhile, an International Monetary Fund delegation is in Zimbabwe for meetings with the government and private sector ahead of its executive board meeting on September 9 when Zimbabwe's expulsion will be considered.

There is particular interest in the IMF visit because no one in Zimbabwe is able to say with any certainty whether South Africa has paid off some of Harare's debt to the IMF of nearly $300-million (R1 965-million) to try to prevent expulsion.

The loan agreement was hammered out between South African Finance Minister Trevor Manuel and Reserve Bank Governor Tito Mboweni and their Zimbabwean counterparts Herbert Murerwa and Gideon Gono nearly three weeks ago.

But the deal stalled when Murerwa and Gono presented Mugabe with the draft agreement for approval. He is opposed to some of the political conditions attached, particularly South Africa's call for an all-inclusive process of constitutional reform.

The draft agreement has been drawn up to avoid any mention of Mugabe's arch foe, the Movement for Democratic Change (MDC) and its leader, Morgan Tsvangirai, authoritative sources say.

Impeccable Reserve Bank of Zimbabwe (RBZ) sources say a sense of frustration has now gripped senior central bank officials who have been working overnight to avoid Zimbabwe's expulsion.

The sources felt the deal with South Africa, drawn up after the "agreement in principle" by President Thabo Mbeki's cabinet to rescue Zimbabwe, offered the best prospects to avoid expulsion.

But Mugabe has told Gono to keep trying to raise loans from other countries such as China, Malaysia and Iran.

"It seems Mugabe does not care whether or not we get expelled from the IMF," said one official in the RBZ.

"He does not think it (the IMF) will resume lending money to Zimbabwe anyway, even if all arrears are liquidated and expulsion avoided. He is keeping the institution out of the equation," added the official.

Under the deal South Africa will release $170-million (about R1 113-million) for payment to the IMF. The rest will be released in tranches of $50-million (R327,5-million) to buy food and fuel.

But everything is predicated on Zimbabwe's acceptance of reforms leading to a new constitution in an all-inclusive process, to measures to restore the rule of law by reviewing draconian laws and to a new economic policy that does away with structural distortions such as the use of dual exchange rates.

One senior government official speculated that the arrival of the IMF mission could force Mugabe to act. It was to be expected that the mission would issue yet another negative report on Zimbabwe.

The sources say South Africa has largely adopted a "the ball is in your court" attitude on the loan issue and is waiting to hear from Zimbabwe authorities but Mugabe's prevarication has held up things. Nevertheless, the sources say, Murerwa and Gono have not stopped consultations with Manuel and Mboweni.