Not for the first time, a London-based bank is caught up in a battle for democracy in Africa.

In the mid-1980s a group of banks delivered a mortal blow to South Africa’s apartheid regime when they refused to roll over Pretoria’s debt. Not long after, Barclays caved in and pulled out of South Africa, prompted by a student-led boycott in Britain that had begun to dent its profits and harm its profile.

This time Standard Chartered Bank will be in the firing line as Zimbabwe’s exiled opposition demands an end to Standard Chartered’s involvement in a country which has become synonymous with suffering. As Standard Chartered appreciates better than most, doing business in Africa is seldom straightforward.

Although Standard Chartered is today an Asia-dominated outfit, with headquarters in London, it should know the continent well. The bank has been operating in Africa for more than a hundred years, navigating the end of colonialism, countless coups, and dozens of collapsing currencies.

So there is a certain historical symmetry in the fact that Zimbabwe, the first country - after South Africa - in which the bank opened its doors, should today present Standard Chartered with what is arguably one of the toughest decisions it has ever faced during its time on the continent.

Does Mervyn Davies, the chief executive officer, pull out of Zimbabwe and risk reducing the prospect of being the link institution between the growing economic might of China and the resources of Africa? Or does he decide to stay in, hold his nose, and face the opprobrium of onlookers, while doing business with a regime that gets nastier by the week?

Any hope of continuing with a third option – staying in and hoping that no-one notices - disappeared this week with the news carried by China’s Xinhua news agency.

Standard Chartered, it reported, has secured offshore lines of credit for Zimbabwe’s industries. Now this is not in itself surprising. Banks make money by lending money. But in Zimbabwe it can be argued that foreign facilities provided by Standard Chartered are helping to keep afloat a government regarded as one of the worst in Africa.

“Securing offshore lines of credit” is a fancy way of saying that Standard Chartered Zimbabwe branch is continuing to borrow abroad, on behalf of local clients, and providing them with precious foreign exchange.

A spokesman at the London HQ disputes this interpretation. The $80m, he says, represents a capacity for short term loans to merchants outside Zimbabwe who are doing business in the country. Either way, it seems a distinction without significant practical difference: it is a financial exercise which helps the struggling Zimbabwe economy survive.

It is unclear whether the money will help state-owned or private companies but the distinction may be irrelevant in a country where private business must kowtow to Mugabe to stay in operation.

Whether for political or commercial reasons, news of the disclosure of the $80m credit was not welcomed by the bank’s London HQ. The figure is correct, a spokesman acknowledged, but it was not bank policy to make such information public.

Did Standard Chartered London know about the credit? Yes, was the reply and it was a normal part of doing business in Zimbabwe, the spokesman said.. Did they help secure it? Again, the answer was Yes. Did the Zimbabwe operation make a profit? The figures were not available said the spokesman who added that the welfare of the bank’s 1000 local employees was a paramount concern.

The bank can also argue, and does, that it is helping local businessmen - cotton growers and the like - to sell their produce abroad in difficult circumstances.

"This is a complex and difficult situation, especially for our 1,000 staff in Zimbabwe," the Standard Chartered spokesman saild. "One of the bank's main considerations is to take care of the people who work for us. We continue to provide the same service for our customers and care for our staff as we always have."

But to other questions, there was no more information forthcoming from Standard Chartered. What was the total credit in 2005? How did this compare with the preceeding years?

Above all, there was no answer to the toughest question: After 25 years in office, has Robert Mugabe's regime become so corrupt, and sleaze so endemic, that nearly every company in the country has to be complicit, if only to survive? And if that indictment is correct, are overseas partners not tainted by association?

Has the regime become so persistent in flouting the norms of democracy that to do business with it demeans the participant?

In short, should Mervyn Davies and any other banker involved in Zimbabwe be asking themselves: has Robert Mugabe’s regime become uniquely odious, crossed the threshold of decency, and is now beyond the commercial pale?

Michael Holman is a regular contributor to Times Online on African issues. He is the former Africa editor for the London Financial Times. His novel, Last Orders at Harrods: An African Tale, is published by Polygon. Buy it here.

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