Govt to borrow without Parly scrutiny

Parliament Building

THE highly-indebted government will be allowed to borrow from non-State institutions without Parliament scrutiny if the Constitution of Zimbabwe Amendment (No. 2) Bill is signed into law.

The Bill to amend the Constitution for the second time is currently before Parliament and will undergo public hearings. It will also clip Parliament’s powers of oversight over international treaties on non-State loans.

Clause 23 of the Bill to amend the Constitution proposes that the current section 327(3) of the Constitution must be altered so that Parliament’s powers of oversight are clipped in terms of approving agreements entered into with international organisations even if those agreements impose fiscal obligations on Zimbabwe.

This is despite the country’s heavy indebtedness whereby according to the Parliament of Zimbabwe budget office, by the end of 2018 the total external and internal debt had reached US$20 billion. Of that amount, the external debt was US$11,5 billion including loans from Afrexim Bank, while the domestic debt was around US$8,5 billion.

Section 327 (3) of the Constitution which will be amended reads: “An agreement which is not an international treaty, but which has been concluded or executed by the President or under the President’s authority with one or more foreign organisations or entities; and imposes fiscal obligations on Zimbabwe does not bind Zimbabwe until it has been approved by Parliament.”

Constitutional law expert and lecturer James Tsabora said there is danger in clipping Parliament’s oversight on foreign borrowings, especially if the borrowings are of a fiscal nature and have an effect on taxpayers.

“Although there is a danger on amending the Constitution to clip Parliament’s oversight role, it is also international practice that a country chooses which treaty goes through Parliament for approval and which does not go through Parliament,” Tsabora said.

“However, if the amendment goes through there is a danger in terms of foreign borrowings given that Zimbabwe has over-borrowed from foreign institutions which has landed us into the problems we are in right now, and Parliament is important to put in checks and balances,” he said.

Tsabora said if Parliament’s oversight role on loans and treaties is curtailed, government has the obligation to ensure that whatever it does is constitutional.

“What it means is that before the President approves the treaties and loans he must also ensure that they are constitutional. The current situation is that the Constitution allows for double oversight by Parliament, and also by checking its constitutionality.

“Parliament must debate loans and treaties. However, with the current system of Parliament where Zanu PF has a two thirds majority, Parliament’s oversight role has been weakened and it means that treaties will just be endorsed, yet any laws with a public finance bearing need to be fully debated,” Tsabora said.

Legal think-tank Veritas said Parliament’s oversight role over the State’s expenditure is enshrined in section 299 of the Constitution, adding that it is fundamental for good governance which is one of the founding values of the Constitution.

“Clause 23 of the Bill will emasculate this power. Over the past few decades the government has entered into innumerable loan agreements with foreign governments, banks and other entities, paying little or no regard to how the loans can be repaid. As a result Zimbabwe’s foreign debt is enormous, crippling the country’s development.

“To amend section 327 so as to remove or reduce Parliament’s powers will be utterly pernicious and will encourage a return to reckless spending by the government, mortgaging the birth wright of future generations,” Veritas said. – News Day