Zimbabwe’s consolidated debt now stands at a staggering US$18 billion, with a substantial portion owed to international creditors which include institutions like the World Bank, International Monetary Fund (IMF), and bilateral partners, including China.
Domestic public debt has also risen due to non-payment of government-guaranteed debt by private beneficiaries.
The country’s debt burden poses significant threats to national development and access to global financial markets.
Addressing lawmakers in parliament on Wednesday, Minister of Finance, Economic Development and lnvestment Promotion Deputy Minister, David Mnangagwa said the country’s debt was still undergoing validation and reconciliation. Said Mnangagwa (via <a href="https://www.zimlive.com/zimbabwes-debt-burden-balloons-to-us18-billion/">ZimLive</a>):
<blockquote>
Our debt figures are still going through some validation and reconciliation.
There has been US$1.9 billion recapitalisation of the Mutapa Fund and an additional US$1.2 billion that was assumed from the Reserve Bank of Zimbabwe (RBZ).
These would still need to be reconciled and validated before they are entered into the debt profile. That process is still underway.
</blockquote>
Mnangagwa also said the debt reported to the African Development Bank in April stood at US$2.7 billion, higher than the approved budget for this year.
The government’s efforts to address the debt crisis are being hindered by the lack of clarity on how the funds were used.
Zimbabwe’s appeal for debt forgiveness and penalty waivers has so far been unsuccessful.
The United States stopped participating in a critical debt restructuring programme in January citing human rights abuses, lack of electoral reforms and crackdown on opposition politicians.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

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Zimbabwe’s Debt Burden Rises To US$18 Billion

Finance and Economic Development Minister Mthuli Ncube has said the assumption of the Reserve Bank of Zimbabwe (RBZ)’s external debt by Treasury will make budget financing for the 2024 fiscal year difficult.
On 15 June, President Emmerson Mnangagwa issued Statutory Instrument 108 of 2023 which authorised Treasury to take over RBZ’s external debt.
<a href="https://www.newsday.co.zw/business/article/200015330/rbz-external-debt-gives-treasury-headache">NewsDay</a> reported that this was done to prevent the central bank from printing money to service its debt but since the promulgation of the statutory instrument, Treasury has acquired $7.69 trillion worth of debt accrued by the RBZ between December 31, 2022 and end of May.
The 2024 budget strategy paper released by Treasury last Friday reads in part:
<blockquote>
Government’s financing requirements are expected to remain under pressure during 2024 on account of the takeover of the central bank’s external obligations, growing informalisation and the need to sufficiently provide for NDS1 (National Development Strategy 1) programmes and projects during the medium term.
However, the government’s commitment to maintain the budget deficit within the 3% of GDP (gross domestic product) threshold will be critical in managing inflationary pressures and restoring stability in the economy.
</blockquote>
Ncube said economic growth was expected to remain positive as it was projected at 5.3%, 5.2% and 5% for 2023, 2024 and 2025, respectively, well within the NDS1 growth targets. He said:
<blockquote>
Government measures in support of macroeconomic stability, coupled with the drive towards structural economic transformation, value addition and beneficiation, are expected to sustain this positive growth trajectory.
</blockquote>
He added that increased electricity generation from the Hwange Thermal Power Station and investments by independent power producers will further boost economic activity during 2024.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

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