Zimbabweans call for debt audit
Zimbabwe’s debts have ballooned from around $700 million at independence in 1980, to $4.6 billion now. Most of the debts are owed to the World Bank, the IMF and the African Development Bank. A large proportion of the debt is interest that has accumulated on debts that have not been paid for many years, but now that Zimbabwe is re-engaging with the international community, it will come under increasing pressure to start making repayments on its debts.
Zimbabwe’s economic collapse over the past decade is well known, with Gross Domestic Product plummeting by 40%, dangerous hyperinflation, and the collapse of social services. This has been exacerbated by the current global economic downturn. The human consequences of this have been disastrous, and there are dire needs for basic healthcare, water and sanitation, and education, to name but a few. The last thing Zimbabwe can afford to do now is to start repaying international debts.
At a meeting organised by ZIMCODD, Zimbabwe’s Finance Minister Tendai Biti admitted, “At the moment Zimbabwe has no capacity to repay its debt and will not pay.” Analysts fear that, if nothing is done internationally to stop the further build-up of arrears, the country’s debt levels could rise to $7 billion by 2011.
Some may argue that the Zimbabwean regime should not be let off the hook and that it should have to repay its debts. Certainly, campaigners agree that where funds have been misused or corruption has taken place, those responsible should be held to account. However they point out that it is the ordinary people of Zimbabwe who are suffering a humanitarian crisis which will only be worsened if desperately needed public funds are now used to service unpayable and unjust debts.
Moreover, the international lenders who turned a blind eye to the situation in Zimbabwe and carried on lending, who profited from corruption, or who simply made bad lending decisions, must also share responsibility for the country’s debt. Debt campaigners in Zimbabwe point to the illegitimacy of some of Zimbabwe’s debts, for example through the failure of loans linked to the IMF and World Bank Structural Adjustment Programmes in the 1990s.
Jubilee Debt Campaign supports ZIMCODD’s call for a debt audit as this would help to establish, among other things: the amounts borrowed, interest levels, amounts repaid, conditions of lending, reasons for borrowing, use of funds, and who benefited, as well as historical and ecological aspects of the debts. The results could then be used to determine which debts are illegitimate and so should not be repaid.
The context of the power-sharing deal makes progress on this issue complex. Mugabe is still in the Government and many of his party are accused of corruption and misuse of power. However, Jubilee Debt Campaign is urging the international community to act now to put in place the steps needed to ultimately free Zimbabwe’s people from this huge debt burden, when the political situation is right. We must not see a repeat of Liberia, which waited two years after it had emerged from civil war and elected a democratic government, before donors could agree on a process to start providing debt relief.
There should be an immediate freeze on the further build up of Zimbabwe’s arrears. An audit should establish the legitimacy of the debts. Meanwhile arrangements should be made for the provision of debt cancellation once the people of Zimbabwe can be sure that the funds released will be spent transparently and accountably. At the same time the UK and other wealthy governments should provide more grant aid via UN and non-governmental agencies in Zimbabwe to help counter the extreme suffering of the people.
