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Enacy Mapakame

The outbreak of the Covid 19 pandemic, has necessitated the need for debt service relief for developing countries, Zimbabwe included. This also comes as the country has also been commended for making efforts towards enhancing public debt transparency and accountability.

In a recent interview, African Forum and Network on Debt and Development (AFRODAD) executive director Mr Jason Braganza said the outbreak of the coronavirus in December 2019 worsened the debt vulnerability for most African countries. The Sub Saharan African region had already been battling natural disasters such as droughts which affected agriculture, while fluctuations of global commodity prices also had a knock-on effect on the region whose economies are largely dependent on agriculture and extractives.

“The debt levels in many African countries are high and in some instances, some creditors are willing to give our countries more debt without looking at debt sustainability.

“Covid-19 has made the situation worse and we are likely to see expenditure towards debt services and social spending reduced as governments implement austerity measures,” said MrBraganza in an interview held in Kariba recently.

He added such a situation called for debt service relief and commended the SADC Parliament for coming up with a position on debt cancellation, although countries may require to meet certain conditions to qualify for debt relief.

Recently the European Union Council approved debt relief efforts for African countries following the adverse impact of Covid-19 in the region.

This came after the realisation of increasing debt vulnerability in low income countries across the globe, particularly in Africa.

“The council welcomes the G20 — Paris Club Debt Service Suspension Initiative (DSSI), which offers a temporary debt moratorium to the poorest countries to help them manage the severe impact of the Covid-19 pandemic, and its extension until 30 June 2021 with the possibility of a further extension by 6 months. It commits to full and transparent implementation of this initiative,” reads part of a statement by the Council late last year.

The council, however, advocates the negotiation of debt restructuring where necessary, on a case-by-case basis, while ensuring strong conditionality on public financial management, anti-corruption frameworks and domestic resource mobilisation in the context of an International Monetary Fund (IMF) programme.

In this case debt transparency becomes critical to allow for informed decisions by borrowers and creditors in the context of debt relief efforts.

Mr Braganza commended efforts being initiated in Zimbabwe in particular towards enhancing public debt transparency and accountability saying they were positive steps in the right direction.

“There is a fair bit of work done to address the debt issue in Zimbabwe, for instance, the debt bulletins that have been produced for 2018 and 2019. These are some positive steps in the right direction and it’s upon us to appreciate these positive steps being taken.

“As civil society, we appreciate these steps by Government and will continue to engage as opposed to antagonising each other, because ultimately we are citizens of a country and are all affected by debt,” he said.