Zimbabwe faces a daunting challenge as its Parliament struggles to monitor a surging debt, placing the nation in a precarious financial position. Market analysts have voiced concerns over the country’s escalating external debt, which, according to the 2024 national budget, reached a staggering US$12.7 billion by September 2023.
Vincent Chakunda, a local governance expert, spoke to NewsDay Business about Zimbabwe’s dire situation. “Our debt growth reflects our weak repayment capacity, and the interests accumulating on arrears exacerbate the issue,” Chakunda explained. He highlighted the lack of oversight by Parliament in debt acquisitions, citing a controversial US$1.3 billion loan from China in 2018 that was reportedly obtained without parliamentary approval.
This situation has drawn attention to the efficacy of Parliament’s role in monitoring and managing the country’s debt. Chakunda added, “The key question is the extent of Parliament’s monitoring of public debt growth to ensure new debt acquisitions genuinely benefit national development.”
According to a report by Newsday, Zvikomborero Sibanda, an economist at the Zimbabwe Coalition on Debt and Development, emphasized the impact of the debt on service delivery. He pointed out that more funds are allocated to debt servicing than to essential services, limiting the country’s ability to improve infrastructure and social services.
As taxes rise to manage the debt burden, the welfare of citizens is increasingly affected. Sibanda warned that Zimbabwe’s reliance on domestic resources and heightened taxation are direct consequence of its inability to manage and repay its debts.
The situation in Zimbabwe highlights a critical need for stronger parliamentary oversight and strategic financial management to navigate out of the debt crisis and ensure sustainable development for the nation’s future.
