Zimbabwe In US$19.3b Debt-ZIMCODD

By Faith Chimutsa

Harare- Current efforts of engagement with multilateral creditors are hanging by the thread of token payment to creditors as well as faltering efforts to re-engage the international community after years of pariah status, this was revealed during the Zimbabwe Public Debt Indaba conference in Harare.

Standing at a USD $ 19.03 billion debt, Zimbabwe is one amongst Southern African Development Countries (SADC) affected by debt which has seen high taxing of citizens both public and private sectors in a drive to settle the debt while pushing to meet with the annual national budget.

Zimbabwe Coalition on Debt and Development (ZIMCODD) said the ongoing efforts to address reforms in the Transitional Stabilization Plan (TSP) is undermined by the medium term debt strategy.

Programmes manager for ZIMCODD, John Maketo, told Journalist in Harare that Zimbabwe’s real gross domestic product rose to 6.3 percent in 2021 reflecting a positive change in Mining, Agriculture and Construction.

“The ministry of finance and economic development minister, Mthuli Ncube said Zimbabwe experienced severe exogenous shock due to cyclone Idai, protracted drought and the covid-19 pandemic which led to deep recession and high inflation slowing progress towards restoring macroeconomic stability.

The latest International Monetary Fund report highlights that the consolidated debt is now at $19.3 billion at the conclusion of article IV,”Maketo said.

ZIMCODD board chairperson, Mukasiri Sibanda said the ballooning debt represent 68.1% of the annual GDP threshold above acceptable ratio with public guaranteed external debt standing at USD $17.59 billion and in current arrears of $13.1 billion, a negative figure which has led to increasing poverty levels and inequality in Zimbabwe.

Inequality has negatively affected and created a bottle neck among societies with the poor being taxed the same amount with the rich, corrupt and smugglers.

Earlier the nation was informed, the current national debt is affecting even a new born baby as it is going to linger on for a while unless drastic measures are taken to fight corruption, taxing the rich and build a circular economy which will create multifaceted revenue channels and tributaries.

Sibanda added the spiraling illicit financial flows and failure by government to transparently and accountably account for revenue from the country’s minerals which are expected to reach USD $12billion export target by 2023, highlight a deficit as it is not clearly stated by the African Union illicit financial flows which have risen to over USD $50 billion dollars and according to the United Nations trade and Development in Africa USD $88.6 billion is lost annually.

In his closing remarks, Sibanda urged Southern African countries to implement policies like the SADC protocol on finance and investment and the formula of the proposed SADC model public finance management law which should be strengthened as critical building block for sustainable debt management plan aligned to international and regional benchmarks in all SADC countries.