Zimbabwe's Mounting Debt Crisis Is A Barrier To Economic Recovery, Says Mthuli Ncube
Finance Minister Mthuli Ncube has admitted that Zimbabwe’s mounting debt crisis is severely undermining efforts to stabilise the economy.
Speaking in Harare this week, Ncube said that the country’s ballooning debt, stagnant revenues, and shrinking fiscal space were the major issues.
Zimbabwe’s public debt has surged to over US$21 billion, nearly 90% of the country’s GDP. Major creditors include the World Bank, the African Development Bank, the Paris Club, and the non-Paris Club. Said Ncube (via Business Times):
If there is anything that keeps me awake at night as the Finance Minister it’s this debt crisis. The issue of debt is critical and albatross that we need to remove from our necks so that the economy can move forward. This issue occupies me for the most of my time [and it’s taking a toll on me].
What is more worrisome to me is that Zimbabwe’s average growth of around 6% is way lower than the interest rates growth.
This means that our debt will continue to be increasing. That’s why we have to restructure our debt to ensure that the debt does not accumulate.
The country’s growing debt burden limits the government’s ability to fund public services and stifles economic growth prospects.
To tackle the crisis, Ncube revealed plans to divest from underperforming State-Owned Enterprises (SOEs) to raise funds for debt repayment.
The Zimbabwean government has also engaged with international financiers through a high-level dialogue platform led by African Development Bank (AfDB) President Dr Akinwumi Adesina and former Mozambican President Joaquim Chissano.
However, these initiatives have faced challenges due to delays in implementing essential governance reforms, which are crucial for the arrears clearance and debt resolution agenda.
More: Pindula News
