Debt crisis deepens hardship for ordinary Zimbabweans

Zimbabwe's worsening debt crisis and rising domestic arrears are increasingly shifting the burden of economic strain onto ordinary citizens, according to a new report by the Zimbabwe Coalition on Debt and Development.

The report warns that the country's fiscal trajectory is entrenching poverty, inequality and social exclusion, despite official claims of economic stabilisation.

Zimbabwe remained in severe debt distress throughout 2025, with public and publicly guaranteed debt estimated at US$23.4 billion by September. However, the report highlights the rapid growth of domestic arrears as a more immediate concern, rising sharply from US$34 million at the end of 2024 to over US$1.3 billion within nine months.

According to Zimcodd, this surge has translated into what it describes as "hidden austerity", where the effects of debt are felt through underfunded public services and delayed government payments.

Schools have struggled to access funding under the Basic Education Assistance Module, while health institutions, farmers, pensioners and service providers face prolonged delays in receiving payments.

The report also points to significant deviations in budget execution. By the third quarter of 2025, less than half of approved allocations had been disbursed to key social sectors such as health, education and social welfare, while infrastructure spending exceeded initial targets.

"This reflected skewed fiscal priorities and deepened public scepticism about the integrity of budget management," the report noted.

Zimcodd argues that fiscal policy should prioritise fairness and inclusion, warning that any economic recovery has remained largely exclusionary.

Formal employment continues to shrink, particularly among young people, with more than 80 percent of economic activity now taking place in the informal sector — often characterised by low incomes, instability and lack of social protection.

The report further highlights the disproportionate impact on vulnerable groups, noting that women bear increased unpaid care responsibilities, while rural and mining communities face compounded deprivation.

Concerns were also raised over a shrinking civic space, which the coalition says has weakened public participation in economic decision-making.

The report cites the enactment of the Private Voluntary Organisations (PVO) Amendment Act in April as a key development, arguing that it has expanded state oversight of civil society organisations and contributed to self-censorship and reduced advocacy.

"Without the freedom to organise, speak and advocate, citizens have limited tools to challenge unjust economic policies and governance failure," the report said.

Zimcodd executive director John Maketo said the impact of fiscal pressures is being felt most acutely at community level.

"The costs of these failures are borne by ordinary people — from families waiting for basic health services to informal traders struggling under rising costs and taxes," he said.

Looking ahead, the coalition warned that fiscal pressures are likely to persist, with inequalities expected to deepen unless there is sustained reform and inclusive economic policy.

The report concludes that Zimbabwe's current trajectory reflects a "fractured social contract", where debt obligations are prioritised over social needs, and economic governance continues to place the heaviest burden on citizens.