Analysts and economists have called for an audit of the country’s debt to validate the arrears and to protect citizens from being forced to repay the loans.
Zimbabwe is said to be in debt of up to US$18 billion with about half of that owed to external creditors.
Speaking during a Public Policy Research Institute of Zimbabwe (PPRIZ) policy dialogue meeting under the theme ‘Zimbabwe’s debt crisis and its implications to the ordinary citizens’, economist Tendai Bobo said there is need for a debt audit so that there is transparency before citizens take over the debt.
“As citizens we are saying, are we supposed to pay an illegitimate debt, we need this debt to be audited because the government is the one that took the money and they are still benefiting from it,” Bobo said.
Illegitimate debt is a debt contracted in favour of a privileged minority.
Bobo emphasised on the need for the government to consult citizens before taking loans.
“We want to be consulted as the people when it comes to the debt which they say we have as a country.
“We are not saying we do not want to pay abstract but we do want to pay that is why we are calling for debt audit, and the Minister of finance is in the process of auditing the debt,” Bobo said.
“We do not want to do things without knowing whether am I benefitting or if it is justifiable, we want to pay the debt if it is justifiable.”
Bobo said there were constitutional provisions that allowed the country to borrow to undertake developmental projects.
“The framework of the constitution says the government should come up with an act of Parliament that dictates in terms of limits of borrowing, in terms of guarantees, and the public debt management act is very clear in terms of these ethics”.
Meanwhile, socio-economic analyst Tafadzwa Chikumbu said if the government was to borrow money this year, “domestically or externally the total amount that they have to borrow should not exceed 30% of our revenue”.
“If a government decides to borrow or to guarantee a specific loan either for ZESA or all state-owned enterprises and local authorities, the total amount that it guarantees should not exceed 40% of the government`s revenue,” he said.
Chikumbu said since the country is saddled with debt the only option they have is to borrow domestically.
“In this current situation where our lines of previous credit from external creditors have been closed, we only have an option to borrow domestically and, in such cases, you cannot exceed 20% of the government revenue in the previous year’s budget.
“In 2018 we were supposed to borrow up to a maximum of $729 million but the government went on and borrowed 2.3 billion far exceeding the interbank.