HARARE – Zimbabwe’s public debt has surged by $4 billion in just eight months, reaching a total of $21 billion, drawing strong criticism from opposition leaders. The country, which has been in default on its debt since the early 2000s due to economic challenges, faces increasing pressure as its financial situation worsens.
To address its mounting debt, Zimbabwe recently appointed African Development Bank (AfDB) President Akinwumi Adesina and former Mozambican President Joachim Chissano to assist in engaging creditors for a restructuring program. However, due to the country’s ongoing failure to meet its debt obligations, major international lenders like the International Monetary Fund (IMF) and World Bank have refused to provide further financial assistance.
Opposition figures have been vocal about their discontent with the government’s handling of the debt crisis. Corban Madzivanyika, an opposition member, sharply criticized President Emmerson Mnangagwa’s administration for the rapid increase in public debt. Speaking on September 15, Madzivanyika highlighted that the country’s debt had ballooned from $17 billion in December 2023 to $21 billion by mid-September 2024.
“It is clear that the debt question has spiraled out of control in Zimbabwe. Let us be honest with each other. In just eight months, the debt has increased by more than $3 billion,” Madzivanyika said.
He also questioned the government’s recent investments, particularly the allocation of $1.9 billion to the sovereign wealth fund and the $1.6 billion purchase of a 35% stake in mining company Kuvimba. Madzivanyika suggested that the value of Kuvimba was inflated, stating, “Can you honestly tell me that those six companies under Kuvimba are worth $4.6 billion?”
Madzivanyika called for greater transparency and accountability in managing Zimbabwe’s debt, urging the government to avoid reckless borrowing without parliamentary approval.
“We need to improve how we handle the debt issue. There must be no borrowing and no guarantees without parliamentary approval,” he emphasized.
In an attempt to resolve the debt crisis, Zimbabwean lender Time Bank has proposed a $35 billion syndicated loan. The bank’s plan, reported by state-owned The Herald, aims to help the government liquidate its external debt and compensate farmers whose land was seized during the country’s controversial land reform programs. The proposed loan would cover Zimbabwe’s $20.4 billion foreign debt, provide $7 billion to Black farmers who lost land without compensation before 1980, and allocate $3.5 billion to White farmers whose land was expropriated in the past two decades.
As Zimbabwe grapples with its soaring debt and growing economic challenges, the government faces mounting pressure to implement more effective financial reforms and restore the confidence of international lenders.
Source: Bne Intelligence