Zim’s debt management crisis accelerates worsening poverty

….media urged to prioritise public finance management issues

 

By Tafadzwa Muranganwa

Zimbabwe’s failure to settle   external and internal debts has been cited as one of the major reasons  for   worsening poverty among Zimbabweans.

Currently, the country is saddled with a national   debt stock of   close to $18 billion which has been described as unsustainable and could lead to high levels of poverty and inequality.

This was heard at media training workshop organised by the Zimbabwe Coalition on Debt and Development(ZIMCODD) in the capital on Thursday.

According to ZIMCODD director Jane  Zhou , government’s borrowing has often violated the provisions of the constitution but the media has not done much in covering how debts impacts on the lives of ordinary citizens.

“Government’s loan contraction processes have violated Section 300 of the Constitution which set limits on state borrowings , public debt and state guarantees. Section 61(a-b) of the Public Finance Management Act 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.

“Positive media coverage on the RBZ and ZISCO Steel debts assumptions 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,” says Zhou.

The lack of media coverage  was also echoed by former NewsDay business editor Munyaradzi Mugowo.

“Although there has been some coverage of these issues in the local media, the reports have not captured the magnitude of Zimbabwe’s sovereign debt crisis, which is the root of current macroeconomic imbalances, including the currency crisis and inflation currently undermining stability and growth,” revealed Mugowo.

Another speaker Tatenda Nyachega from  AFRODAD(The African Forum and Network on Debt and Development) pointed out there  is a correlation between debt, poverty and inequality so much that there is the need for the governments especially Africans to fully commit in solving sovereign debts.

“There exists bi-relations amongst the three debt and poverty, poverty and inequality and debt and inequality.

“So there is the need for governments to commit debt management is key to poverty alleviation and addressing inequality in Africa,” said Nyachega.

Zimbabwe’s sovereign debt has accelerated to US$18,491 billion due to a massive surge in domestic debt with analysts arguing that there is the need to stop some government programmes like Command Agriculture which are bleeding the fiscus because of their over-reliance on private lending.

According to the World Poverty Clock report in 2018 ,  5 679 092 people in Zimbabwe were living in extreme poverty, with a target escape rate at 51,8% and a current escape rate at 11,1%.