THE Zimbabwe Coalition on Debt and Development (Zimcodd) has called for the setting-up of a Public Debt Commission to conduct an official public debt audit before any debt relief mechanism can be considered for the Reserve Bank of Zimbabwe (RBZ) $1,3 billion debts.
BY PAIDAMOYO MUZULU
Zimcodd’s call came as Parliament is about to pass the RBZ Debt Assumption Bill which among other things will make the State inherit the central bank’s debt and let those who benefited from the loans go scot-free.
Zimcodd chairman Joy Mabenge said his organisation was calling for a three-pronged approach to resolve the country’s debt problem.
“Parliament should set up a Public Debt Commission (PDC) to officially audit all national debts, convene an All Stakeholders Public Debt Dialogue Platform and to engage in domestic resource mobilisation as opposed to continuously borrowing from foreign countries or banks,” Mabenge said.
The proposed PDC, Mabenge said, would also inquire into beneficiaries of the loans and to what extent they have benefited sector by sector.
Most of the debts were accrued from financing the Farm Mechanisation Programme that allocated tractors, harrows, planters, combine harvesters and planters among other farm implements to Zanu PF bigwigs, including Cabinet ministers and service chiefs.
The farm implements beneficiaries have not been named publicly, but the RBZ Debt Assumption Bill will write off the debts.
“The debt dialogue platform will bring together representatives from various sectors of our society like faith-based organisations, labour, special interest groups, creditors, Parliament and the government among many others to inform the process of finding a sustainable solution to the debt question,” Mabenge said.
Zimcodd said the focus should now be tapping domestic resource for development which is sustainable and desirable in a democracy.
“Instead of focusing on repaying debts in order to be able to borrow again, the government should focus on domestic resource mobilisation and plugging of illicit outflows through high levels of corruption, tax evasion and tax dodging in the extractive industry, particularly the mining sector, wildlife, forestry, fishery among others,” he said.
The debt and developmental organisation also said that ex-RBZ governor Gideon Gono’s comments on the central banks debt should be scrutinised and if they were feasible then there was no need for the Debt Assumption Bill.
“The RBZ debt issue also raises more questions in light of the former RBZ governor Gideon Gono’s contribution that the central bank is actually capable of repaying its debt if its assets are disposed. This therefore implies that the proposed Debt Assumption Bill is not necessary,” Zimcodd argued.
Zimbabwe is currently facing a $10 billion debt overhang resulting in the country failing to access fresh funding from international capital markets.