GOVERNMENT’S domestic debt declined to $119,4 billion after reaching an all time high of $127,4 billion on September 15, central bank figures revealed this week.
In its recent update of government’s debt stock, the Reserve Bank of Zimbabwe said domestic debt stood at $119,4 billion as at September 30, declining by $8 billion from the record touched on September 15.
Government’s domestic debt consists of government stocks, treasury bills and central bank advances.
Since January this year, domestic debt has been on an upward trend.
Government said its borrowing had been bloated by food and fuel imports.
The country, once the region’s bread basket, has been dependent on imports to feed its people due to disruptions caused to the farming sector by a controversial agrarian reform as well as poor harvests caused by draught.
Government’s domestic debt opened the year at $14,1 billion and has been consistently rising since then.
With limited or no meaningful sources of offshore support for the budget, government has aggressively borrowed from the domestic market where high interest rates have significant increased the domestic debt level.
A highly inflationary environment has created huge deficits in the national budget, forcing government to resort to aggressive borrowing.
Last year, the budget deficit out-turn was at 60% of gross domestic product, according to figures released by the International Monetary Fund (IMF).
Government had, however, claimed the budget deficit for the year was a paltry 3% of GDP.
Central bank governor Gideon Gono said in July that government’s debt levels had become unsustainable.
Besides domestic debt, government holds a huge stock of foreign debt which it has failed to repay because of foreign currency shortages.
The country’s total debt disbursed and outstanding (including arrears)currently stands at US$4 billion.