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Zimbabwe: Responsibility for the Debt Management Strategy

The new waiver makes progress towards debt management which analysts say is a step in the right direction towards improving transparency and accountability.

Public debt remains a controversial issue in the country due to its negative effects on economic growth as well as its impact on the delivery of social services.

In addition, ordinary citizens bear the burden in terms of high taxes and other austerity measures designed to ensure unsustainable debt service.

Between 2014 and 2019, the country’s debt was mainly driven by arrears. External arrears fell from US $ 109 million in 1999 to US $ 6.4 billion in 2019.

However, the deputy director of the public debt management office of the Ministry of Finance and Economic Development, Mr. Joseph Medzano, said that the current administration of President Mnangagwa is working to introduce transparency, including the publication of the first Debt Bulletin of 2018, which was released in March of this year. .

“We are making a consistent policy of issuing a debt bulletin and we started with the 2018 one when the current administration took over.

“We recognize the shortcomings in this regard, but we will soon have another one for 2019 when we prepare the national budget. We have also restructured the RBZ debt and halted ZAMCO debt acquisitions,” he said. said yesterday in Bulawayo at a three-day annual multi-stakeholder meeting in Zimbabwe. Debt conference organized by the African Forum and Network on Debt and Development (AFRODAD) and the Zimbabwe Coalition on Debt and Development (ZIMCODD).

Mr. Medzano added that the engagement efforts were also a way to settle the debt, with some token payments having been made to the International Monetary Fund.

During the period 2010 and 2019, Zimbabwe took out $ 3,202 billion in loans. The fuel and power sectors accounted for US $ 1,697 billion, of which US $ 250 million was a guarantee issued by the government in 2018 to finance the office differential between the purchase price of commodities by consumers. importers and sellers.

Compensation for former commercial farmers is now expected to increase external debt by US $ 3.5 billion.

Afrodad’s senior policy analyst Tirivanhu Mutazu said the release of the 2018 debt bulletin, for example, was laudable in promoting transparency and accountability.

“The efforts to increase domestic resource mobilization are also a step in the right direction in debt management,” he said.

He argued, however, that securing natural resources was in bad taste as it would affect future generations who would be deprived of the resources.

Other stakeholders at the conference agreed that there was still room to improve the transparency and accountability of the country’s debt.

Mr. Mutazu added that over the years, the government has adopted a series of debt resolution strategies, including re-engaging the international community and negotiating a comprehensive package of arrears clearance and debt relief. .

These strategies include the Zimbabwe Fast Track Arrears, Debt and Development (ZAADS) Strategy of 2012 and the Lima Strategy of 2015.

“There is also a parliamentary committee on the foreign affairs portfolio, which complements the government’s re-engagement efforts,” he said.

The conference takes place under the theme “Strengthening transparency and accountability in public debt management for sustainable development”.

Tags : debt reliefdebt service

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