Debt rises dramatically

New dispensation deep in debt: Economist

NewsDay by Blessed Mhlanga

October 6, 2018

President Emmerson Mnangagwa’s government has incurred a debt of over $4,5 billion in less than nine months owing to fiscal indiscipline, underlined by underperforming parastatals, expensive borrowing and lavish lifestyles by top government officials, respected economist Godfrey Kanyenze has said.

Speaking during a SAPES Trust dialogue in Harare on Thursday, Kanyenze who is former Reserve Bank of Zimbabwe (RBZ) board member, said the new dispensation had failed to divorce itself from the past.

“In 2013, when Zanu PF took over government, there was only a domestic debt of $275 million but now it’s $9,75 billion. There was no domestic debt to talk about,” Kanyenze said.

“Last year, the domestic debt was around $5 billion so it means during the new dispensation period we have actually incurred a debt of more than $4,5 billion in a just a short space of time. We have actually expanded the debt during the tenure. We are actually saying we are in a new dispensation, so the practices of the past have continued to be implemented.”

Government has announced various fiscal and monetary measures which it hopes will cure the budget deficit and pay off the domestic debt while stabilising the liquidity crisis.
The measures include the introduction of a 2% tax per dollar for every electronic transaction which government hopes could raise over $2 billion.

Kanyenze called on Zimbabweans not to take the policies by government lying down, saying the time to be forced into paying debts on behalf of the political elites should come to an end.

“In 2015, the government adopted the RBZ Debt Assumption Act, of $1,35 billion of the mechanisation programme. The tractors, the basic commodities supply side intervention, all those things, taking over that debt created real challenges in the whole macroeconomics framework,” he said.

“What is very critical is that the Government of National Unity had agreed that those who had benefited must pay. I was on the board of the RBZ up to 2013 and that was the position we took. I remember vividly the then governor (Gideon Gono) assuring us that they had every address of the recipients and hence everyone was supposed to pay. But now we are saying we have a budget deficit as if it came from nowhere.”

Kanyenze said time had come for citizens to demand accountability from government.