A staggering US$2.7 billion discrepancy in Zimbabwe’s debt figures has raised alarm bells, casting a shadow over the country’s already precarious debt crisis and prompting urgent calls for clarity and transparency in the government’s handling of the nation’s finances.
The country’s debt arrears are ballooning to unprecedented levels, posing a significant threat to national development and access to global financial markets, and prompting urgent efforts by the government to negotiate a sustainable repayment plan with international financial institutions and creditors.
According to Deputy Minister of Finance, David Mnangagwa, the debt figures are still undergoing validation and reconciliation.
“Our debt figures are still going through some validation and reconciliation. There has been US$1.9billion recapitalisation of the Mutapa Fund and an additional US$1.2billion that was assumed from the RBZ.
“These would still need to be reconciled and validated before they are entered in the debt profile. That process is still underway.,” he revealed this to Parliament on Wednesday afternoon.
However, Mnangagwa acknowledged that the debt reported to the African Development Bank at the end of April by the Treasury boss Mthuli Ncube was approximately US$2.7 billion higher than that approved in the budget for this year in December 2023.
“Indeed, there is an additional US$2.7 billion that was presented at the AfDB by the Hon. Minister, which is still going through a validation process,” he confirmed.
The government’s efforts to address the debt crisis are being hindered by the lack of clarity on how the funds were used.
Mnangagwa assured Zimbabweans that the government is working to ensure that the expenditure is validated and reconciled before it is entered into the debt profile.
“…the process of validation and the reconciliation, particularly for the debts that we have assumed from the RBZ, as to what exactly these monies were used for, and to make sure that they were actually used for the purposes they were said to have been used for.,” he said.
Despite the government’s efforts, Zimbabwe’s debt situation remains uncertain. The country’s national debt register shows that about 76% of its external bilateral debt, amounting to approximately US$6.2 billion, is in arrears.
The Paris Club members, including Germany, France, Britain, Japan, and the USA, are owed US$4.1 billion, nearly 98% of which has defaulted due to the economic crisis that began two decades ago in Zimbabwe.
The government’s appeal for substantial debt forgiveness and the waiving of additional penalties has yet to bear fruit.
Mnangagwa acknowledged the challenges facing the government, saying, “We are keen to make sure that we close this process as quickly as possible and ensure that our books are in good order.”
In January this year, the United States stopped participating in a critical program for restructuring Zimbabwe’s debt, which now amounts to more than US$18 billion, due to alleged lack of progress on democratic reforms, alleged voter fraud, and political violence targeted at opposition parties.