Accountability hallmark of debt management strategy

The new dispensation is making strides towards management of debt that analysts say is a step in the right direction towards enhancing transparency and accountability.

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

Additionally, the ordinary citizens carry the burden in terms of high taxes and other austerity measures meant to service the unsustainable debt.

Between 2014 and 2019, the country’s debt was driven mainly by arrears. External arrears increased from US$109 million in 1999 to US$6,4 billion in 2019.

However, Ministry of Finance and Economic Development deputy director public debt management office, Mr Joseph Medzano, indicated that the current administration by President Mnangagwa, is making efforts to introduce transparency including publication of the inaugural 2018 debt bulletin, which was released in March this year.

“We are making it a consistent policy to publish a debt bulletin and we started off with the 2018 one when the current administration took over.

“We acknowledge the gaps in that but we are having another for 2019 coming soon when we do National Budget. We have also restructured the RBZ debt and stopped ZAMCO debt acquisitions,” he said in Bulawayo yesterday at a three day Zimbabwe Annual Multi-Stakeholder Debt Conference hosted by African Forum and Network on Debt and Development (AFRODAD) and Zimbabwe Coalition on Debt and Development (ZIMCODD).

Mr Medzano added that the engagements efforts were also a way of addressing the debt with some token payments having been made to the International Monetary Fund.

During the period 2010 and 2019, Zimbabwe contracted US$3,202 billion in loans. Fuel and power sectors accounted for US$1,697 billion of which US$250 million was a guarantee issued by Government in 2018 to finance the office deferential between the purchase price of commodities by the importers from sellers.

The compensation of former commercial farmers is now expected to increase external debt by US$3,5 billion.

Afrodad senior policy analyst, Tirivanhu Mutazu, said the publication of the 2018 debt bulletin for instance was commendable in promoting transparency and accountability.

“Efforts towards enhanced domestic resource mobilisation is also a step in the right direction in debt management,” he said.

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

Other stakeholders at the conference agreed there was still room for improving transparency and accountability in the country’s debt.

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

These strategies include the Zimbabwe accelerated arrears clearance, debt and development strategy (ZAADS) of 2012 and the Lima strategy of 2015.

“There is also a Parliament Portfolio Committee on Foreign Affairs, which is complementing the re-engagements efforts of the Government, “ he said.

The conference is running under the theme “Strengthening transparency and accountability in public debt management for sustainable development.”-hrald.cll.zw