Zim borrowed $1,174 billion in 2015- Zimcodd

The Zimbabwe Coalition for Debt and Development (Zimcodd) has revealed that Zimbabwe borrowed a total of $1, 174 billion and arrears of $5,528 have accumulated.

The organisation said in the past year Zimbabwe has stepped up efforts to reengage with its international creditors, which last month led to Zimbabwe presenting a debt arrears clearance plan on the sidelines of the IMF / World Bank annual meetings in Peru.

"This plan was received positively by creditors and could lead to debt arrears clearance, after which Zimbabwe could access new loans from the International Financial Institutions," said Zimcodd.

"Following these developments the Zimbabwe Coalition on Debt and Development (ZIMCODD) issued a useful fact sheet and position paper on Zimbabwe's debt arrears clearance strategy. The fact sheet outlines the size of Zimbabwe's debt and provides an overview of the various creditors."

Zimcodd said although acknowledging the necessity of addressing Zimbabwe's debt problem, ZIMCODD also outlines various recommendations aimed at ensuring a sustainable debt management strategy.

"This includes the call for a debt audit and responsible lending from creditors in the future.Zimbabwe borrowed $1,174 billion externally and $5,528 arrears have accumulated," said Zimcodd. "Out of the US$1,174 billion, $5,528 is arrears. Multilateral Disbursed and Outstanding Debt (DOD) is $372 million and $2,199 arrears have accumulated making a total of US$2,571 billion. Total Bilateral DOD is US$802 million and US$2,743 in arrears has accumulated making a total of US$3,545 billion bilateral debt."

Zimcodd said  Paris Club DOD is $229 million and $2,607 billion in arrears has accumulated making Paris Club debt $2,836 billion.

"Non-Paris Club DOD is US$574 million and US$135 million in arrears has accumulated making Paris Club debt US$2,836 billion. We call for: a public debt audit to establish how much is owed, the purpose and condition under which  loans were given, disbursement methods, whether objectives were met, charges other than interest and benefits and if any benefits accrued to citizens," Zimcodd said. "Illegitimate and odious debts should be unconditionally cancelled. Government should stop assuming debts of parastatals and should limit guarantees on these debts. The government is encouraged to continue to lead in the process of resolving the debt crisis instead of allowing the external players to dictate the debt resolution strategies."

The organisation said debt management strategies to be implemented should not infringe on social and economic rights.

"The government should strike a balance between debt repayments and social sector spending," said Zimcodd. "ZIMCODD advocates for responsible lending from the creditors. The government should focus on domestic resources mobilisation and minimise external borrowing. This calls for plugging leakages in the public finance management system. In the event that government is contracting loans, it should acquire grants and more concessional loans which are cheaper. The oversight role of parliament in public debt management should be strengthened according to the constitution and the Public Debt Act."