ZIMBABWE’S worsening debt crisis and mounting domestic arrears are quietly shifting the burden of economic mismanagement to ordinary citizens, a new report has revealed.
According to a latest annual report by the Zimbabwe Coalition on Debt and Development (Zimcodd), the country’s fiscal trajectory is entrenching poverty, inequality and social exclusion.
The report said public debt had climbed to alarming levels, intensifying concerns over weak fiscal discipline and the country’s escalating economic fragility.
The report paints a grim picture of an economy where debt, fiscal policy and public resource management extends beyond technical governance concerns to questions of justice and human dignity.
“While official narratives pointed to stabilisation and recovery, the everyday experience for most Zimbabweans was shaped by persistent poverty, high unemployment, deepening inequality and a shrinking civic space,” the report read in part.
“Zimbabwe remained in severe debt distress throughout 2025, with public and publicly guaranteed debt reaching an estimated US$23,4 billion by September.
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“More telling than the headline figure was the rapid escalation of domestic expenditure arrears — from US$34 million at the end of 2024 to over US$1,3 billion by September 2025.”
This, according to Zimcodd, has turned debt into everyday hardship, with schools left underfunded through Basic Education Assistance Module, health facilities struggling and farmers, pensioners and service providers facing delayed payment.
The coalition described the situation as “hidden austerity”, where the burden of debt is quietly passed on to citizens through reduced public services and unpaid government obligations.
The report further revealed that budget execution diverged significantly from planned allocations.
“By the third quarter of 2025, less than half of approved allocations had been disbursed to key social sector ministries — health, education and social welfare — while infrastructure spending expanded significantly beyond original allocations.
“This reflected skewed fiscal priorities and deepened public scepticism about the integrity of budget management.”
The coalition maintained that fiscal policy should advance fairness, dignity and inclusion rather than exacerbate inequality.
“Where economic recovery occurred, it remained largely exclusionary.
“Formal employment continued to shrink, especially for young people, as over 80% of economic activity took place in the informal sector — characterised by insecurity, low incomes and limited protection.
“Regressive taxation and rising living costs further squeezed low-income households.
“Women bore a disproportionate burden of unpaid care work and rural and mining-affected communities faced compounded deprivation.”
The report also noted that civic space tightened over the past year, weakening public debate and limiting citizen participation in policymaking.
“The enactment of the Private Voluntary Organisations (PVO) Amendment Act in April expanded State control over civil society organisations, fostering fear, uncertainty and widespread self-censorship,” it said.
“Many organisations curtailed advocacy and critical engagement, weakening independent policy dialogue and citizen mobilisation.”
Added the coalition: “Zimcodd recognised this as an economic justice issue as much as a rights issue — without the freedom to organise, speak and advocate, citizens have limited tools to challenge unjust economic policies and governance failure.
“Taken together, Zimbabwe’s 2025 context revealed a fractured social contract: one in which debt obligations were prioritised over social rights, fiscal discipline outweighed human development and political control narrowed democratic participation.”
Zimcodd executive director John Maketo said the effects of fiscal pressures were not confined to government offices but were being felt in communities.
“The costs of these failures were not borne by institutions — they were borne by a mother in Goromonzi waiting for a health facility that never received its disbursement, by the informal trader in Bulawayo facing taxes designed without her in mind,” Maketo said.
“Looking ahead, the challenges are likely to continue.
“Fiscal pressures will remain high, civic space will still need to be actively protected and long-standing inequalities in Zimbabwe’s economic system will not change without consistent, organised and evidence-based advocacy.”-newsda
