Citizens Coalition for Change (CCC) vice President and re-elected Harare East legislator Tendai Biti has castigated the government for superintending over a ballooning consolidated debt for Zimbabwe, which is now exceeding US$19 Billion dollars.
Biti was speaking during the 3rd annual Zimbabwe Debt Indaba, a conference organized by a leading social economic justice organization Zimbabwe Coalition on Debt and Development (ZIMCODD).
The former Finance minister said the current patterns of debt assumption camouflage the commission, omissions and illegalities of the Reserve Bank of Zimbabwe that have previously been raised by the Public Account Committee (PAC).
He said the ballooning debt, close to 70% of the Gross Domestic Product, has been compounded by the Reserve Bank of Zimbabwe which is overarching through an expansive fiscal policy that misplaces unsustainable fiscal obligations on the people of Zimbabwe.
“The consolidated debt for Zimbabwe now stands at $19 billion officially or 65 percent of the GDP, these figures are published in the conclusion of the IMF report which was published last week.
“The elephant in the room is the reserve bank and under John Mangudya it has become a rogue institution and in my opinion the country doesn’t need the RBZ. Let’s have a currency board.
“All that RBZ does is dabble in quasi fiscal activities which ultimately lead to debt assumptions,” he said.
In 2015 the RBZ assumed US$1.5 billion as public guaranteed debt while in 2019 another debt of US$3.5 billion in December 2021 was also assumed for repayment by ordinary taxpayers.
Biti warned that soon the government will saddle citizens with another debt burden through the Financial Adjustment bill of 2019 which seeks parliament condonation of US$ 10,6 billion unbudgeted expenditure.
He said the RBZ is central to these shenanigans, equating the current system as akin to the running of a shadowy parallel budget, whose illegal expenditures are then forced on people through debt assumption.
“We have a rogue government that infringes on the constitutional rights with their shenanigans and illegalities. We need a curator to analyze the legality of contraction of the debt and also to prove if the debt was used for its purposes,” said Biti.
ZIMCODD executive director Janet Zhou said civic society’s push for a national debt audit was critical to enhance the oversight role of Parliament in the debt resolution process.
She called for a robust debt sustainability plan underpinned by a transparent debt validation process of the government that should also be viewed with a human rights lenses.
“Currently we are just financializing the debt but we need to be politicizing these problems in engaging with debt and putting a human face reflecting how this constricts the state capacity to meet social services.
“Debt audit should be interlinked with a social audit to understand the links with how a woman in rural areas access social services. We need to talk beyond validation, corruption and structural political challenges and look closely at how debt affects diverse groups in various ways,” she said.
An official from the Ministry of Finance and Economic Development said the government was seized with the debt burden and was consulting extensively on how to address the challenge.
Currently the debt repayment strategies are defined under the Medium Term Debt Management Strategy (MDTS) which will be reviewed to cover 2022 to 2025 to address debt sustainability and risks of debt management.
The IMF Article IV report acknowledged these strides although it noted that the 2019 Staff-Monitored Program experienced significant policy slippages and elapsed without a review, putting the country off track.
“Since then, the authorities have made significant progress towards restoring macroeconomic stability, though the implementation of past IMF policy advice has been mixed. The authorities have developed a debt resolution strategy and started token payments to creditors in a bid to make progress on re engagement,” reads part of the report.