aurora
Enacy Mapakame
Zimbabwe’s public debt could be understated with experts in public accounts management arguing the actual debt could be around US$25 billion.
Public accounts committee member, Edwin Mushoriwa, said there are some loans that have been approved without going through parliament and not stated on the public debt figures.
“The debt is understated, we believe it’s more than we are seeing,” he said during the just ended Zimbabwe Annual Multi Stakeholder Debt Conference hosted by African Forum and Network on Debt and Development (AFRODAD) in conjunction with Zimbabwe Coalition on Debt and Development (ZIMCODD) in Bulawayo.
“The Reserve Bank of Zimbabwe (RBZ) for instance, contracts debts without Parliament oversight and we believe the total debt could be close to $25 billion now because some of it is not stated, for instance money guaranteed to state enterprises,” he said.
The country’s public debt has also been increasing due to large fiscal deficits and quasi- fiscal activities by the central bank, which had over the years been involved in public sector expenditure programmed such as procurement of farming inputs, petroleum products, grain and processed food, farm implements and electricity among others.
As at 2019 – year end, total public debt and publicly guaranteed external debt was estimated at US$10,6 billion which is 49 percent of GDP. About 57 percent (US$6 billion) of the outstanding external debt was external payment arrears.
Other members of Parliament at the meeting also concurred that the country’s public debt was shrouded in mystery with poor documentation and breakdown of what the country owes and to who, creating a fertile ground for corruption.
State enterprises and some Government ministries were also accruing debts but not captured on balance sheets while delays in publication of debt figures was also a threat to transparency and accountability.
Parliament has an obligation to oversee the use of public resources and also authorise the Finance and Economic Development Minister to borrow as well as issue guarantees on behalf of Government. However, this has not been the case in some instances.
Parliamentary Portfolio Committee on Budget and Economic Development chairperson Felix Mhona, concurred adding a breakdown of loans was important to enhance transparency.
“We are not sticking to some of the dictates of the Constitution. And also people need to know the composition of a particular loan say from China, we need to know that,” he said at the same conference.
Publication of debt is crucial to enhance accountability and transparency in public financial administration.
However, an Annual Debt Management Report for Zimbabwe 2020, released at the same conference by AFRODAD shows otherwise.
“Reporting on debt makes citizens hold Government to account and promotes transparency and accountability,” said AFRODAD senior policy analyst Tirivangani Mutazu while presenting the report findings.
However, the report commends new efforts being made by Government to make information available for instance the publication of the first 2018 debt bulletin in March this year. Ministry of Finance has indicated this will be a consistent policy to publish timeous debt bulletins to enhance accountability.
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