KEY POINTS
- Zimbabwe’s public debt has risen to over $21 billion, raising concerns in Parliament.
- MP Corban Madzivanyika questioned the transparency of government deals and company valuations.
- The debt has diverted funds from social programs and hindered borrowing for national projects.
Zimbabwe’s ballooning public debt has sparked concern in Parliament, with Citizen Coalition for Change (CCC) Member of Parliament Corban Madzivanyika stating that the debt, now exceeding $21 billion, is out of control.
During a recent parliamentary debate on the 2024 Mid-Term Budget and Economic Review, Madzivanyika raised questions about the lack of transparency surrounding foreign company evaluations and government spending practices.
The parliamentary Budget and Finance Committee chairperson, Clemence Chiduwa, also highlighted the significant increase in public debt from $17 billion in December 2023 to more than $21 billion in 2024.
He warned that this mounting debt could hinder Zimbabwe’s economic growth prospects, threatening the country’s Vision 2030 goals.
Concerns over shady deals and project funding
Madzivanyika expressed skepticism about the valuation of some foreign-owned companies involved in key national projects.
He specifically pointed to the government’s decision to recapitalize the Mutapa Investment Fund with $1.9 billion and the acquisition of a 35 percent stake in Kuvimba Mining House for US$1.6 billion.
“If 35 percent of Kuvimba is valued at US$1.6 billion, then the entire company should be worth $4.6 billion. Is that figure even realistic?” Madzivanyika questioned, raising doubts about the accuracy of the valuation process for Kuvimba’s assets, which include mining entities like Sandawana Mine, Freda Rebecca, Jena Mines, and Shamva Gold Mine.
According to New Zimbabwe, Madzivanyika also criticized the government for prioritizing investments in large-scale projects that, in his view, offer little immediate benefit to the struggling economy.
He specifically highlighted the Batoka Energy Hydroelectric Power project, a US$2.8 billion initiative on the Zambia-Zimbabwe border that has yet to address the country’s pressing electricity challenges.
Debt’s impact on social programs and borrowing
Madzivanyika emphasized the negative impact of Zimbabwe’s rising debt on essential social services. He noted that funds meant for social protection programs, such as aid for street children and drought relief, are instead being diverted to repay debt.This misallocation of resources, he said, exacerbates the country’s social and economic woes.
“The debt problem is crippling our ability to borrow further for critical national projects,” Madzivanyika stated, adding that Zimbabwe’s debt burden prevents it from accessing funds from international financial institutions.
Madzivanyika also called for stronger oversight, insisting that any future borrowing or guarantees must have parliamentary approval.
He stressed the importance of managing debt responsibly to avoid worsening the country’s financial position and urged the government to focus on more sustainable investments that can drive long-term economic growth.
