Advocate Jacob F. N. Mudenda, the Speaker of Parliament of Zimbabwe, has urged the need to address the debt constraint on the country’s fiscal flexibility and investment capability to spur economic development.
This came to the fore in a keynote address delivered on his behalf by Hon C. Chiduwa, the Chairperson of the Parliamentary Portfolio Committee on Industry and Commerce during a management workshop by the Joint Portfolio Committee on Budget, Finance and Investment Promotion and Public Accounts Committee in Masvingo on 16 May 2025.
Mr Kennedy Chokuda, the Clerk of Parliament of Zimbabwe gave opening remarks and welcomed the delegates to the workshop.
Key dignitaries included the Chairperson of the Portfolio Committee on Budget, Finance, and Investment Promotion, Hon. Dr. E. Mutodi; the Chairperson of the Public Accounts Committee, Hon. C. Hwende; officials from the Ministry of Finance, Economic Development, and Investment Promotion; officials from the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI); officials from the Zimbabwe Coalition on Debt and Development (ZIMCODD); and officials from the African Forum and Network on Debt and Development (AFRODAD).
Hon Mudenda said debt is an important financial tool that can drive development and enable governments to produce public goods and services for the benefit of the citizenry. However, he said when countries are forced to borrow for economic survival, debt can become a trap that generates more debt. Some of the poorest countries in the world are confronted with the dilemma of either servicing debt or providing services to their citizenry. They have virtually no fiscal space for essential investments in the Sustainable Development Goals, the transition to renewable energy or to undertake other critical development initiatives.
A 2023 United Nations Report paints a very pessimistic outlook of the global debt architecture. According to that report, the total public debt of developing countries increased from 35% of the Gross Domestic Product (GDP) in 2010 to 60% in 2021. Similarly, external public debt, the part of a government’s debt owed to foreign creditors, increased from 19% of GDP to 29% of GDP in 2021. If we compare the debt levels of developing countries to their ability to generate foreign exchange through exports, it is evident that their ability to generate sufficient foreign currency to service their external debt obligations has also been deteriorating.
In that regard, Speaker Mudenda said Parliament is entrusted with a constitutional responsibility to diligently safeguard our financial future. In its capacity to approve or ratify loans, it aims to ensure that the executive has conducted a comprehensive economic evaluation, selection process, cost analysis, and ongoing monitoring of any public investment project. Furthermore, Parliament is committed to confirming that the loan terms such as the interest rate, repayment schedule, and grace period are both fair and appropriate.
The history of Zimbabwe’s public debt can be traced to the 1980s when the country inherited a substantial debt from the Rhodesian government to the tune of US$ 700 million, which was about 15% of GDP at that time. However, it is instructive to note that Zimbabwe had a sound debt management strategy prior to the year 2000, but economic sanctions and the economic exigencies which characterised the period 2000 to 2008, led to challenges in servicing foreign public debt.
As of 2024, Zimbabwe’s total Public and Publicly Guaranteed debt stood at US$21.2 billion, comprising US$12.3 billion in external debt and US$8.7 billion in domestic debt. In 2024, the debt stock remained at approximately 60% of GDP, aligning with the 60% SADC Macroeconomic Convergence benchmark.
This debt burden weighs on public finances, diverting resources from infrastructure investments, and constraining future GDP growth and structural transformation. Additionally, the rising cost of debt service, despite a decreasing debt-to-GDP ratio, highlights the need for Zimbabwe to develop homegrown solutions to address its challenges. We should focus on establishing a robust macroeconomic policy framework that reduces our reliance on external financing and allows us to utilize our resources for domestic development.
The government has made considerable progress in restructuring and renegotiating certain elements of the debt. However, the overall debt burden remains a major constraint on our fiscal flexibility and ability to invest in critical development priorities. It is commendable that the Government has initiated an Arrears Clearance, Debt Relief, and Restructuring Strategy, which is implemented through a Structured Dialogue facilitated by African Development Bank President Akinwumi Adesina and the former President of Mozambique Dr. Joaquim Chissano. A debt management strategy is a key tenet of Public Debt Management as provided for by Section 8 of the Public Debt Management Act.
Despite the existence of these elaborate constitutional and legislative provisions, the country is still grappling with the issue of effective debt management.
The Joint Capacity Building Workshop on Effective Debt Management has been organized for the Portfolio Committee on Budget, Finance and Investment Promotion and the Public Accounts Committee. The capacity-building programme was designed to expand the understanding of national debt management and to equip Parliamentarians with the tools and strategies necessary to guide the country towards sustainable debt management practices.
The expectation is that the knowledge and skills gained from the training programme, should assist them to engage in efficient oversight of debt management operations.
Parliamentary committees have a vital role to play in ensuring that the nation’s debt is managed prudently and transparently for the benefit of the citizens. As watchdogs of the public purse, Speaker Mudenda said Committees must vigilantly monitor the government’s borrowing activities, debt servicing obligations, and overall fiscal health.
“You should demand comprehensive reporting from the relevant Ministries, Agencies and Departments and scrutinize the loan agreements and the structure of the debts. It is imperative for your Committees to ensure that loans are allocated to projects that will generate sufficient funds for repayment. According to Section 327 (3) of the Constitution, Parliament must approve all loans that impose fiscal obligations on Zimbabwe. Similarly, when presented with loan agreements, it is your duty to assess whether the loans are in the public interest and aligned with the economic and fiscal policy of the government. However, you cannot fulfill these onerous responsibilities without the appropriate knowledge and skills.
“That is why it is essential to prioritize the capacitation of two Committees on techniques for sound debt management. In my view, well-trained parliamentary Committees can provide effective oversight, ask the right questions, and make informed decisions regarding the government’s debt portfolio and strategies. I am confident that this capacity-building session will strengthen the country’s public financial management and contribute to more prudent and transparent debt management practices across the public sector,” Speaker Mudenda said.
He added that State-owned Enterprises and Local Authorities are required by Section 300(4) of the Constitution and Section 36(1) of the Public Debt Management Act to report their debt stocks that are guaranteed by the State.
However, the 2023 Auditor General Report highlighted that some entities were behind with their Audited Financial Statements, with some dating back to 2018. This is a clear and blatant violation of Section 35(5)(b) of the Public Finance Management Act.
“I raise this point because failure to submit financial accounts compromises the accurate calculation of the country’s domestic and external debt position. Further, Section 22(5) of the Public Debt Management Act also obligates public entities to submit their borrowing records to the Ministry of Finance, Economic Development and Investment Promotion. Therefore, it is incumbent upon your Committees to promote effective public debt management principles by ensuring that Local Authorities timeously submit detailed financial statements to the Ministry of Finance, Economic Development and Investment Promotion, including an outline of their debt obligations.”
