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How did Zimbabwe end up with such toxic debts?

05 Apr 2019 at 09:59hrs | Views
What I witnessed last Saturday at Zimbabwe's biggest hospital, Parirenyatwa, got me thinking.

In the casualty unit, there was no doctor attending to patients from 5.30pm to 9pm. I saw patients on stretchers and wheelchairs groaning in pain for hours on end, with no physician in sight. They included a badly injured man who had been left for dead by violent thugs. The pharmacy did not have some basic drugs in stock. After 9pm, there was only one doctor attending to patients, an astounding arrangement, considering that Parirenyatwa is a university-teaching hospital.

It really got me thinking. The total national debt is said to be US$18,1 billion. Evidently, that money has not been spent on the health delivery system. What on earth has it been spent on?

In recent years, the nexus between a huge national debt and the monumental decay in the delivery of vital social services has stuck out like a sore thumb.

A conference held in Harare last week provided fascinating insights into one of the most intractable conundrums in Zimbabwe's economic discourse: the national debt crisis.

The Zimbabwe Independent revealed the magnitude of the debt a fortnight ago after obtaining confidential minutes of the Zimbabwe-South Africa Bi-National Commission meetings.
The numbers are as astonishing as they are tragic. Zimbabwe's total debt stood at US$16,9 billion in October 2018, but the figure has since shot up to US$18,1 billion. This is an increase of US$1,2 billion within a few months.

A child born in Qatar today is assured of a superb quality of life. A child born in Zimbabwe today inherits a toxic debt and poverty.

We must remember that the country has to urgently clear arrears totalling US$2,3 billion before anyone can even begin entertaining the prospects of unlocking fresh funding from international lenders.

As a starting point and in the spirit of accountability as stipulated by the tenets of constitutional governance, it is vital for the country to conduct a thorough audit on the debt. There are many unanswered questions: How did we end up with a debt this size? All debts must be audited, including the US$700 million dating back to the Rhodesian era.

We have witnessed public officials cutting scandalous deals which have seen the government burdening taxpayers with a stock of non-performing loans totalling US$1,13 billion.
Who benefitted from this largesse? More importantly, why are public officials stubbornly refusing to disclose the beneficiaries of this debt assumption? This is not the first time the taxpayer has been burdened with toxic debt. In 2015, the hapless taxpayer was forced to inherit a US$1,4 billion Reserve Bank of Zimbabwe debt.

The solution to Zimbabwe's debt crisis is a sustainable, inclusive and holistic strategy. As clearly enunciated by last week's conference organised by the Zimbabwe Coalition on Debt and Development, the path to reform begins with a comprehensive audit and includes the strengthening of public institutions and legislative oversight as part of a broad-based strategy that places all options on the table.

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Source - the independent
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