By Alois Vinga
EXPERTS have called for the mobilisation of key stakeholders to hold authorities to account as a strategy to curtail Zimbabwe’s surging debt.
The call comes at a time when Zimbabwe’s ballooning consolidated public sector debt has reached US$19,03 billion representing a 68,1% ratio to the Gross Domestic Product, according to the latest International Monetary Fund (IMF) report.
Official records also show that six of the 16 SADC member states, including Zimbabwe and Angola, had already exceeded the public debt to gross national income (GNI) ratio target of 60% as far back as 2019 with some of the countries declared to be in danger of debt distress by the IMF and the World Bank.
Countries like Zambia and Mozambique registered the worst performance with a debt to GNI ratio of 119,3% cent and 135,7% respectively.
Further research indicates that the SADC region spends an estimated US $21,1 billion annually in external public debt repayments, thereby compromising welfare expenditure.
The emergence of the Covid19 pandemic as contained in a July 2021 SADC paper prompted economic growth in the region to contract by 4,8% in 2020 lower than the growth of 2,1% recorded in 2019.
The region’s annual inflation increased to an average of 49, 6% in 2020 from 16,4% in 2019, largely due to heightened inflationary pressures in Zimbabwe.
Interestingly, the regional bloc observed that the average regional inflation excluding Zimbabwe averaged 6,4%.
The developments further compromised Zimbabwe’s and the SADC region’s capacity to settle the outstanding external debts.
Speaking to NewZimbabwe.com Business at the two days long Zimbabwe Public Debt Indaba which ended in Harare Wednesday, regional debt experts underscored that the challenges currently bedevilling Zimbabwe are synonymous across the region.
Zimbabwe Coalition of Debt and Development (ZIMCODD) chairperson, Mukasiri Sibanda debt affects citizen’s real-life issues.
“They have far reaching implications as they affect basic human rights like maternal health care. Students at various universities and colleges are having challenges to pay for their fees. Talk about shortages of water and all the challenges all revolves around how development financing is taking place,” he said.
He said the challenges faced by Zimbabwe and Africa as a whole, have both local and a global dimension due to the broken global finance system.
“Countries like Zimbabwe cannot get out of this situation alone as they need a global solution.
“The missing link in most of these issues is lack of political will hence the need to rally everyone to understand why it is important for us to mobilise and create such sufficient political will for the government to take action when it comes to sustainable debt management,” he added.
Zambia based Southern African Social Forum regional coordinator; Gershom Kabaso bemoaned the lack of debt management policy implementation.
“We have just come to the conclusion that like the case of Zimbabwe, most of the SADC regional countries, documentation in terms of the Public Finance Management Acts as well as management of the strategies in place are following a similar pattern of not being implemented accordingly,” he said.
He said the root cause of this debt crisis which is choking these nations can be traced towards poor enforcement of the regulatory requirements, underscoring that if the region’s Finance Ministers were consistent such problems could now be a thing of the past.
“So, it is against such a background we urged the region’s parliamentarians and key stakeholders to put in place measures to ensure the enforcement of Debt Management regulations to ensure compliance. That alone can improve the situation being experienced in the Southern Africa region. There is a need to improve the local mobilisation of resources to properly apply taxation that will improve the revenue situation in Southern Africa,” he said.
Malawi Economic Justice Network regional coordinator, Mike Banda bemoaned the fact that throughout the region, finance ministers have a tendency of playing around with the Finance Management Acts and other debt management instruments.
“What is surprising is that there are very sweet- and high-sounding debt management strategies which are unfortunately not being implemented. Such debt management strategies which we must be adhering to are just not being abided by,” he said.
He said most of the countries in the region are well above the recommended Debt to GDP ratios, a situation he said forces huge sums of money to be spent on servicing debts at the expense of welfare expenditure.
Banda called on the region’s stakeholders to join hands in fighting such devices.
“A worrisome trend we are seeing in the region is the limited capacity of parliamentarians to contribute meaningfully to such issues due to incapacitation.
“We continue to question why developments like debt assumptions continue to take place right in the presence of these MPs and this begs the question on where do we draw the lines between their competencies and the quality of decisions being reached.
“It is indeed a regional and global challenge which needs us to work together as stakeholders in tackling,” he said.