Debt dialogue a critical step for arrears clearance

President Emmerson Mnangagwa at the second high-level structured dialogue platform meeting held in February

ZIMBABWEAN civil society organisations working on economic and social justice issues welcome and congratulate the government of Zimbabwe for instituting a structured Dialogue Platform, between itself, its creditors and development partners, towards arrears clearance and debt resolution.

Congratulations to President Emmerson Mnangagwa for successfully hosting the second high-level structured dialogue platform at Meikles Hotel, Harare, on February 23.

This demonstrates resolve and determination in stabilising the country in the face of many challenges.

It is no mean feat to achieve the stability in these challenging conditions and with a ballooning debt burden much of which is historical and inherited.

The appointments of African Development Bank president Dr Akinwumi Adesina and former Mozambican president Joaquim Alberto Chissano as co-facilitators of this process, signals a much-needed sense of urgency and priority, as is reflected in the meaningful progress made during the past high-level structured dialogue platform meeting held in December last year.

The second high-level structured dialogue platform meeting came at a critical time for Zimbabwe and her people, when global crises from Covid-19, Ukraine-Russia war, and the climate emergency all converging on a country already crippled by its heavy debt burden.

As such, access to public services, food and other basic services have been impacted thus deepening the inequality and poverty in the country as well as undermining human dignity of the people.

The debt predicament Africa generally and Zimbabwe specifically faces is one that civil society has been warning of for the past decade. The neo-liberal, market-based and private sector-led approach to solving public services and investments is not working for Africa. The global financial and debt architecture is rigged against Africa because Africa does not have a voice at the table of global decision-making.

The second high-level structured dialogue platform meeting is an example of Africa taking its destiny in its own hands, making Africa a rule maker not a rule taker! Zimbabwe is a country in debt crisis and needs help.

The International Monetary Fund projections for 2022 put Zimbabwe consolidated public sector debt at US$18,4 billion . The accumulation of external debt payment arrears and penalties for the past two decades, now estimated at US$6,3 billion as at end of September 2022.

The existence of these external debt payment arrears and penalties remain a major obstacle to the achievement of the National Development Strategy 1 (NDS1) objectives and the attainment of Vision 2030.

The people of Zimbabwe have suffered extensively from the crisis. High inflation has dramatically hit real incomes, while falling public spending per person threatens to reduce access to vital public services.

The inclusion of Civil Society working in the public financial management is paramount for the success of this process. The government and its creditors need not to be reminded the important contribution of civil society in this process.

In reference to the work programme for the arrears clearance, civil society make the following asks and recommendations:

Economic reforms matrix

Combating financial leakages in all forms to protect the limited government revenue streams in Zimbabwe will be critical in stabilising the macro-economic environment and generate confidence for both domestic and international business to invest in Zimbabwe.

Interventions in this area are critical to successfully implement the “Zimbabwe is Open for Business” policy.

Debt transparency

Strengthening the capacity and capabilities of institutions to record and publish debt data and statistics is a key pillar in promoting openness and transparency between citizens and state. In the spirit of cooperation and collaboration, civil society stand ready to work with the Government in this regard.

Creditor responsibility

The debt architecture is skewed in favour of creditor. Indeed, a ‘debt crisis’ is a shared responsibility between the debtor country and its creditors. We recommend the arrears clearance programme impress on all of Zimbabwe’s creditors to reciprocate the transparency of their dealings with the country. This reciprocity will strengthen the programme significantly.

Civil society participation

In the spirit of cooperation and wanting the same end goal, a prosperous Zimbabwe, civil society must be given a defined role within this arrears clearance programme that is integrated in the economic reforms matrix through the sector working group, and the economic growth sub-sector group. As the international creditor community focuses on resolving the Zimbabwe case, it is important to highlight that the debt crisis in Africa is a pervasive problem. Africa runs the risk of seeing another debt crisis, such as that, which unfolded in the late 1980s and 1990s. Civil society calls for a reformed international financial architecture through the United Nations, which delivers sustainable development finance to all countries.

Mutazu is the debt advocacy lead person at African Forum Network on Debt and Development (Afrodad). These weekly New Perspectives articles, published in the Zimbabwe Independent, are coordinated by Lovemore Kadenge, an independent consultant, managing consultant of Zawale Consultants (Pvt) Ltd, past president of the Zimbabwe Economics Society and past president of the Chartered Governance & Accountancy Institute in Zimbabwe (CGI Zimbabwe). — [email protected] or mobile: +263 772 382 852.


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