By Wallace Mawire
Government of Zimbabwe’s loan contraction processes have violated section 300 of the constitution which sets limits on state borrowings, public debt and state guarantees, Janet Zhou, Zimbabwe Coalition on Debt and Development (ZIMCODD) Executive Director told Journalists in Harare at a recent media training on the debt discourse in Zimbabwe.
Zhou said that Zimbabweans are sitting on a deep rooted social and economic crisis with varied symptoms, one of them being the national debt crisis which the country is facing.
“We have a national debt stock of close to $18 billion comprised of both domestic and external debt. Worrisome is the exponential rise in domestic debt within a short space of time raising a key question on debt transparency. Despite the intensity of the public debt crisis in the country, there is a gap in public debt reporting by both state owned and private media,” Zhou said.
She added that section 61 (a-b) of the Public Finance Management Act in Zimbabwe which stipulates that the aggregate amount that may be borrowed in any financial year shall not exceed 30% of the general government revenue in the previous year has always been violated.
According to ZIMCODD, in 2018 alone, the overdraft with the Central Bank stood at US$2,3 billion against the statutory limit of US$762,8 million as set by the Reserve Bank of Zimbabwe (RBZ) Act.
Zhou said that positive media coverage on the RBZ and ZISCO steel debts assumption without flagging out the impacts of such on the ordinary citizen’s social and economic rights highlights that a lot is missing in media reporting on public debt in Zimbabwe.
ZIMCODD said that Zimbabwe was known for being the bread basket of Africa but taking a look at the nation’s current socio-economic situation, one wonders if the Southern African nation ever became the breadbasket of Africa having fallen from envy to pity and from fullness to hunger.
“Zimbabwe has fallen from being the breadbasket of Africa to being an empty basket moving around the world with a begging bowl for loans, aid and unfavourable investments,” she said.
She added that Zimbabwe is characterized by corruption, currency distortions, high unemployment rate, deteriorating health system, poverty and a porous public finance management system.