OPPOSITION Renewal Democrats of Zimbabwe (RDZ) secretary-general, Trust Chikohora has pleaded with the Zanu PF government to swallow its pride and beg for debt forgiveness from the country’s international financiers to avoid a debt “vicious cycle”.
BY SIMON PHIRI
The country has an external debt hovering around $10 billion, while domestic debt cannot be immediately quantified, a development that has seen multi-lateral institutions withholding funding to the country before it clears it.
Finance minister Patrick Chinamasa has repeatedly pledged to settle arrears to three international financial institutions — International Monetary Fund ($110 million), the World Bank ($1,15 billion) and the African Development Bank ($601 million).
Chikohora warned that the country would continue in debt as long as the government remained arrogant and unwilling to ask for debt relief.
“As RDZ, we feel this debt is not manageable and it’s not feasible to solve it by simply saying ‘we are going to repay the debt’. We need massive debt forgiveness, which should only be instituted after a thorough audit,” he said.
“We would need to make our economy perform and this can only be achieved by mending our relations with the rest of the international community, who hold the keys, if we are to qualify for debt forgiveness. There is no other way to go round it because this debt is simply unsustainable.”
“Going forward, we need to be careful on accumulating new debt and even now, Chinamasa is talking about debt management, but he is also taking up more and more debt and we end up in a vicious cycle.”
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In his 2016 National Budget statement, Chinamasa said the deficit in the $4 billion budget, which he presented, would be financed through Treasury Bills.
The country has pledged to clear its arrears by April 2016.
With over 90% of the budget going to recurrent expenditure, with the remainder being chanelled to capital projects, government says it will use its funding facilities from regional and international lenders to clear its foreign debt.
