INTRODUCTION

As Zimbabwe battles to create a new and sane society from the ashes of a decade long political and economic

inferno, the country's unsustainable debt has emerged as one of the biggest constrains to stabilization and

recovery. Not surprisingly the public debt has assumed prominence in Zimbabwe's public discourse. Not a week

passes by without a news report on the worrisome state of the country's indebtedness – not so much that the

figure is gigantically high compared to elsewhere – but that it becomes so when juxtaposed with the country's lack

of capacity to repay. The fiscal space is still suffocated - the country is operating on a cash budget or hand to

mouth. Revenues of US$2.7 billion are projected for 2011 to fund a budget of the same amount. The US$2.7

billion was in fact a rationalization from US$11. 3 billion total bids for 2011 budget funding. The bids certainly

give an indication of national fiscal requirements thus the US$2.7 billion potentially represents a deficit of 8.6

billion or 419% or put differently the US$2.7 billion is equal to a mere 23% of national requirements. Arrears 1alone amount to 71.6% of GDP . The shortfall is almost equivalent to the near 8 billion external and domestic

public debts combined.

The economic costs of Zimbabwe's unsustainable public external debt are felt as the country fails to secure lines

of credit and foreign direct investment and its risk profile remains in the red. According to the country's finance

minister the country requires up to 45 billion in the next 10 years to recover production to its pick levels of 1997.

But such a possibility is growing dim by the day as external support remains uncertain. But the social costs are also

enormous; between January and June 2010 the government of Zimbabwe paid US$1. 3 million in debt repayment

to IMF at a time the ARV requirements were estimate to cost as much, civil servants are still earning below the

poverty line, approximately 8 women are dying every day due to pregnancy related complications, more than 90%

of the country's working age population is formally unemployed, certain districts are facing starvation, health

delivery is still pathetic and physical infrastructure is in a state of decay among other things. In March 2010

Zimbabwe's reserve bank governor estimated that “… assuming that a person's income is wholly deployed to the 2

servicing of debt, it takes 1, 3 years to clear Zimbabwe's debt” . Debt thus competes with social expenditure and

more often than not at the insistence of creditors the latter tends to suffer. For example in 2001 interest

expenditure amounted to 1496% of the allocation to higher education. Within this context, it is legitimate for

Zimbabwean Citizens to expect quick movement towards some sort of amicable resolution of the country's debt

problem.

1Ministry of Finance, 2011 National Budget Statement

2G. Gono, Contributions in the on-going national debt on the Highly Indebted Poor Country (HIPC) debt management proposal, Reserve Bank of Zimbabwe March 2010.

2011 National Budget Statement and Zimbabwe's Indebtedness

1

Investing in People for Social and Economic Justice

Policy Brief December 2010

No. 4/2010

Z i m b a b w e C o a l i t i o n o n D e b t a n d D e v e l o p m e n t

A national budget is one such instrument that must give a clear sense of direction in terms of how

the government plans to resolve this key issue. While one appreciates the current political and

economic limitations the national budget could have done more to address the debt challenges. The

following is ZIMCODD's take on the budget and how the debt question has been addressed.

Concerns which will be explained in detail below can be summed up as follows;

1. The legal framework remains weak and ineffective to ensure transparent and sustainable debt

contraction and management.

2. The government in its debt strategy is ambivalent on the need for an open and transparent official

debt audit - “reconciliation and validation of the external debt” is not equal to a debt audit!

3. Though we know with certainty that Government of Zimbabwe has officially adopted Highly

Indebted Poor Country (HIPC) initiative and Resource pledging (according to AfDB) it is clear

that there is a deliberate ploy to maintain an ambiguous stance. Would it be wrong to suspect that

government is not too sure about going HIPC – they know the flaws.

4. The decision to adopt the Zimbabwe Accelerated Arrears Clearance (ZAAC), Debt and

Development Strategy (DDS) in its current form clearly disregards input from civil society. By so

doing the government is risking compromising the credibility of its own otherwise noble

consultative discussions. It appears at the end of the day that the CSOs participation in high

level forums on debt was ceremonial. This may explain the muted pronouncements.

5. The problems with HIPC are all too familiar by now; just to name a few;

a. Maintenance of heavy debt repayments while country is trying to implement requisite reforms

b. Creditor led and promote creditor interests

c. Does not consider whether debt is odius or otherwise

d. HIPC is expensive; especially litigation costs. HIPC participating countries often end up

spending a lot of money in legal fees as they respond to lawsuits by some creditors who refuse

to be part of the HIPC process.

e. Like ESAP it comes with conditionalities and other policy prescriptions (PRSPs)

f. etc

6. Resource Pledging is problematic;

a. Data on Zimbabwe's mineral wealth is limited; according finance minister there has not been

an official geological survey in 20 years

b. How do you valuate minerals on the ground when prices are subject to volatility for example?

Between 2009 and 2010 the prices of gold and platinum have risen by 45% and 54% 3respectively . Who will carry the risk burden if such a strategy is to be adopted

c. Pledging minerals in the soil amounts to mortgaging the country's future and goes against

generational justice.

d. The far reaching implication of such a strategy – makes it necessary for it to be subjected to

public sentiment

e. Is it really feasible that any creditor will accept that kind of strategy given the political

uncertainty in the country? The finance ministry expresses difficulty in collecting returns from

the diamond sector.

2

3 Ministry of Finance 2011 Budget Statement, pg. 282 And 283

f. Pledging resources ignores the moral question of ecological debt – which argues that in fact it

is the developing countries that are owed by the developed countries from centuries of

resource plunder and exploitation and carbon emissions.

7. The Budget kept a loud silence on Domestic debt

1. Weak and ineffective legal framework to manage debt

The problem of unsustainable debt in Zimbabwe stems partly from the inadequacies of the legal

framework that does not guarantee accountability, transparency, public participation and

sustainability of loan contraction and debt management. Any honest attempt to deal with

Zimbabwe's debt must reform the legal framework starting with the constitution. The constitution

must strengthen the parliament's oversight role in loan contraction and debt management. A

ZIMCODD study of the debt legal framework shows that at the moment loan contraction and debt

servicing can be done outside the view of parliament and the ministry of finance is able to make loan

repayments from the consolidate revenue fund which were not included in the budget vote. Whereas

section 102 (1) read with section 104 holds that debt repayments should occur from the Consolidate

Revenue Fund (CRF) thus subjecting debt repayments to parliamentary oversight (thus making it

illegal for payments to be made outside a budget vote) this otherwise progressive provision is

subverted by section 103 (5) which allows for money to be “expended for any purpose in excess of

the amount” stipulated in the appropriation act. Where that happens, the constitution requires the

Minister to present to parliament at the beginning of the following financial year “… a Bill providing 4for the condonation of such unauthorized expenditure” . This amounts to an “after-the-fact

reporting to a Parliament that never approved the debt in the first place, which is an anomalous 5position” . It is thus not surprising that government is able to prioritise a loan repayment to IMF of

US$1.3 million against the need to provide ARVs. Had the constitution ensured that such a process is

subject to the oversight of people's representatives in parliament one doubts they would have

chosen anything but to prioritise improving human conditions.

2. It is only logical that a comprehensive debt audit be the starting point of a debt

strategy.

It is notable that the budget statement alludes to “reconciliation and validation of the external debt”.

However “reconciliation and validation” does not necessarily equal to a debt audit. A debt audit is

not a mere accounting exercise. It is a means to audit the policies and systems of managing debt with

a view to reforming them – it is as prognostic as it is diagnostic. It thus goes beyond mere validation

and reconciliation to consider the circumstances under which the debt was accrued, terms thereof,

status, costs, use of the debt, assessing whether the debt in its various components is odious or

otherwise and exploring what can be a more sustainable debt framework. It would be a travesty of

justice for Zimbabweans to pay for odious debt. An audit process can end with a cost benefit analysis

of debt strategies Vis a Vis the need to guarantee people's social and economic rights. Any debt

4 The Constitution of Zimbabwe, 1996 Edition, pg 35 - 36

5Z. T. Chayambuka, A Critical Review of The Legal Framework of Public Loan Contraction and Debt Management System in Zimbabwe, ZIMCODD, 2009

3

strategy must not prioritize repayments at the expense of rights such as the people's right to health

care, education, food, shelter and other socio-economic rights.

3. Government ambiguity on the debt strategy

6We know through AfDB and sources in the finance ministry that government has officially adopted

a hybrid of the creditor led HIPC and Resource Pledging. One can still maintain though that

Government of Zimbabwe has not been very open and bold about debt strategy. The budget

statement for examples tries to sugar quote. From the budget statement alone one cannot conclude

with certainty that Government of Zimbabwe has adopted HIPC and Resource pledging.

The 2011 budget statement alludes to a Zimbabwe Accelerated Arrears Clearance (ZAAC), Debt

and Development Strategy (DDS) meant to facilitated re-engagement on arrears clearance, open up

new financing and a comprehensive debt relief strategy. While ZAAC speaks to the urgency of a

solution to Zimbabwe's debt overhang the budget statement failed to articulate a clear, all inclusive

and sustainable strategy to deal with the country's debt. The Clearance and Debt Management

Strategy (CDMS) “leverages on the gains from … STERP 1 and II as well as the country's resources

for the purpose of both economic development and debt clearance”. The statement went on to

mention critical steps in that process namely;

1. Reconciliation and validation of the external debt;

2. Re-engagement with Creditors (on the creditor's terms of course)

3. Negotiating for arrears clearance, new financing and a comprehensive debt relief;

4. Establishing and operationalising a Debt Management Office and

5. Leveraging Zimbabwe's natural resources

The Budget statement went on to explain that, “Once the debt relief program is in place, re-

engagement will initially focus on clearance of arrears to multilaterals creditors … paving way for

debt relief through both Paris Club and non-Paris Club re-scheduling”.

4

Box 1: Odious Debt DefinedOdious debt is a principle of public international law, first formulated by Russian legal scholar Alexander Sack in 1927. It is applied in exceptional circumstances where:(a) the citizens of the debtor country did not consent to the borrowing and they did not receive a benefit

from the debt incurred by the borrowing government; and(b) the creditors knew at the time they lent the money that the citizens of the borrowing country did not

consent to the borrowing and would not receive any benefit from the money being lent to the government.

6 African Development Bank, Proposal to Strengthen Bank Presence in Zimbabwe, Regional Department South 1 (ORSA), July 2010, pg 5

On the Ministry of Mines and Mining Development website the finance minister is quoted as saying;

If we are going to wait for royalties and taxes, Government can forget using the minerals to pay for the

country's debt. The mining sector requires a transparent, honest and proper evaluation report. If we are not 7transparent in this sector, then we should not talk about a resource-based debt repayment strategy.

Another cabinet minister Welshman Ncube was quoted as saying Zimbabwe's debt is unpayable;

The only way out is to declare oneself as poor under the Heavily Indebted and Poor Countries initiative …

(but), what guarantee do we have as a country that if we take on the HIPC status, the same countries will forgive

our debt? No one can guarantee that and one needs to understand that the process of declaring oneself poor is 8by its nature very humiliating. What we have so far as a Government is a debt strategy.

What kind of strategy? It may be that government position's is a compromise between the pro- and

those anti- HIPC and the mutedness is indicative of this tension. Or could it be simply lack of

confidence in the strategy and an admission that the inherent flaws in such a strategy cannot stand

public scrutiny and cannot pass the test of past experience.

4. The country's debt strategy should be subjected to public scrutiny and input.

Citizens bear the cost of debt and debt repayment in financial and human terms, so it is only fair that

any strategy to deal with the debt problem be open and inclusive. As noted above, between January

and June 2010 the Government of Zimbabwe paid US 1, 3 million to IMF at a time the government

is struggling to pay teachers, provide health care and some of the country's district a facing

starvation. Based on the 2010 government expenditure projections, the US1.3 million is enough to

provide ARVs requirements for the year. In 2001 ZIMCODD calculations showed that expenditure

on debt interest amounted to 3, 949% of labour and social welfare allocation. It is not surprising then

that a country like Iceland allowed its citizens to decide on a repayment plan of the €4bn banking

debt to the U.K and the Netherlands. 93% voted NO, to the proposed deal. Why can't the

government of Zimbabwe give its citizens (through their elected officials as a minimum standard) an

opportunity to decide on what should be done with the national debt? In this context, Zimbabwe's

legal and policy framework governing debt management and public loan contraction needs

reviewing to ensure inclusivity and public accountability. In this regard the constitutional making

process is an opportunity.

5

7Accessed on http://www.mines.gov.zw/index.php?option=com_content&view=article&id=21:mining-taxation-laws-need-urgent-amendment

8Minister Welshman Ncube quoted in the Sunday Mail, December 5-11 2010,

Box 2: What is HIPC?The Highly Indebted Poor Country Initiative (HIPC) is a debt relief instrument crafted by the World Bank and International Monetary Fund (IMF) in 1996. HIPC is supposed to 'help' poor countries to reduce the burden of external public debt. An enhanced form of HIPC was launched in 1999 (HIPC II), and recently extended through the Multilateral Debt Relief Initiative (MDRI) in 2005.

5. Flaws of the HIPC process all too familiar by now.

To go the HIPC way flies against experience and logic. Problems with the HIPC process are well

documented. For that reason less time is spent on this point. Most of these flaws are eloquently

explained in the ZIMCODD policy brief on HIPC No. 1/2010. This include among others;

! Maintenance of heavy debt repayments while country is trying to implement requisite reforms to

arrive at the completion point. Though this has been shortened to less than six years under the

Multilateral Debt Relief Initiative (MDRI) there is still a foreseeable burden of a length process

of compliance. Already according to the Ministers of Finance and Commerce and Industry been

cited as saying that Zimbabwe is incapable of repaying its debt which is not surprising. It is for this

reason that ZIMCODD has proposed a moratorium on Zimbabwe's debt pending an audit

basing on the argument that since there is agreement on the un-sustainability of Zimbabwe's debt

it would be a contradiction of effort to expect continued debt servicing while a solution is being

sought. Continued repayments will only serve to worsen the debt situation and make the solution

even more difficult to find. For creditors and donors to insist on repayments under present

circumstances is to go against their own commitments to the MDGs and Human Rights. Given

the fragility and lack of consensus in Zimbabwe's coalition government it is plausible to envisage

that HIPC and MDRI would take even longer for Zimbabwe.

! HIPC is creditor led and promotes creditor interests. It insists that national leaders place the

interests of IFIs above the needs of their own citizens. This short circuits the accountability at the

heart of self-governance, thereby corrupting the democratic process. Social needs are

subordinated to the financial markets making it difficult for national governments to ensure that

people receive basic needs such as food, health care and education. It is disturbing that IMF is not

ashamed to pocket US$1.3 million when thousands are dying due to failure to access treatment.

! HIPC does not consider whether debt is illegitimate or otherwise. HIPC does not question the

historical and moral aspects to establish the legitimacy of debts. Some loans are made without

attention to the viability of planned projects or to the capacity of the recipient country to make

repayments. For example, no foreign loan granted to South Africa during the Apartheid years

could have been illegitimate because the Apartheid state was immoral, dictatorial and illegitimate;

and any attempt to claim ignorance of this fact would not be credible.

! HIPC is expensive; especially litigation costs. As MEFMI's study observed one key characteristic

of HIPC which often goes unmentioned “is that they have no legal force in individual national

legal jurisdictions unless passed into law with enforcement provisions through a specific legal 9

instrument” . HIPC participating countries often end up spending a lot of money in legal fees as

they respond to lawsuits by some creditors who refuse to be part of the HIPC process. At least 20

HIPCs have been subjected to or threatened with lawsuits – coming mostly from commercial and

non OECD creditors. In Cameroon HIPC related lawsuits costs amounted to 98, 3% of total

6

9 Coumba Fall Gueye et al, Negotiating Debt Reduction in the HIPC initiative and Beyond, Publication no. 11, Debt Relief International Limited, February 2007 pp 65

10government revenue and 202% of debt service in Ethiopia . It is worrying to note that an

overwhelming number of the cases were won by creditors.

! Like ESAP HIPC comes with conditionalities and other policy prescriptions. The policy

prescription under HIPC namely privatization as was the case with SAPs lead to de-

industrialization ultimately retarding economic growth and resulting in massive unemployment,

dependency on imports and more suffering of the people. It is not surprising then that the

decision to adopt HIPC and Resource pledging is coinciding with the decision by government to

shed off a significant portion of its shares in 10 Parastatals. It is part of the process to meet HIPC

requirements. In the case of Zimbabwe it is important to point out the country is already heavily

dependent on food imports amounting to as high as 55% of domestic consumptions for a

country having a negative current account. What makes Zimbabwe's situation dire is that it is

using external currencies and the export sector is critical to maintain healthy liquidity levels in the

economy.

! HIPC is un-sustainable – Most countries that qualified for HIPC continue to pay more in debt

repayments. After reaching completion point Uganda still exceeded its debt sustainability three

times. Ethiopia had its debt stock reduced by 47% at completion point in 2003 but the in the long

run debt service remained as high as US$74 million per year, US$100 million from 2004/2005 11consuming 5% of government revenue .

6. Problems with Resource Pledging;

Because resource pledging has been cited as part of the strategy to exit the current debt trap this last

section of this paper considers this proposal from both sustainability and social and economic justice

lens. To be sure resource pledging is problematic to say the least. The following are the reasons why;

a. As noted earlier Zimbabwe's mineral wealth is hardly quantified with certainty. Data on

Zimbabwe's mineral wealth is limited; as the country has not had an official geological survey in

20 years. Since the country's mineral wealth is not adequately quantified, it is not practically

feasible to commit resources to debt or revenue accruing from such.

b. How do you valuate minerals on the ground whose prices are subject to volatility? For example

according to the 2011 Budget Statement between 2009 and 2010 the prices of gold and platinum

rose by 45% and 54% respectively. Any creditor is inclined to be risk averse and would want a risk

premium and the question is who should carry the risk burden. By their nature creditors try to

pass risk costs to someone else.

c. Pledging minerals in the soil amounts to mortgaging the country's future and goes against

generational justice. Resources by their nature are finite, which gives responsibility to the present

generation to use them responsibly in a way that does not deprive preceding generation's right to

such. This applies to passing debt burden to the next generation in whose contraction they had no

7

10 Ibid. pp 70

11 ZIMCODD, Policy Brief, No. 1/2010 February 2010

part. The third US president Thomas Jefferson's argument against accruing long term debt can

be cited here; “pursuing them into the next generation is simply against natural justice … in the

long run we are all dead”. Arguing for an ultimate term for debt redemption Jefferson outlines the

following principle; “The generations of men may be considered as bodies or corporations. Each

generation has the usufruct of the earth during the period of its continuance. …We may consider

each generation as a distinct nation, with a right, by the will of its majority, to bind themselves, 12

but none to bind the succeeding generation, more than the inhabitants of another country” .

Although this may not appear strongly in most of our universal declarations “…it is no less a law, 13and ought to be acted on by honest governments” .

d. This far reaching implication of such a strategy – makes it necessary for it to be subjected to

public sentiment.

e. Is it really feasible that any creditor will accept that kind of strategy given the political uncertainty

in the country? The finance ministry has expressed difficulties in getting remittances from the

diamond sector for instance. Media reports of the militarization of Marange diamond fields have

led some to question the extent to which this strategic resource falls within the purview of

Zimbabwe's official state. Concerns raised by the Finance minister over the “opaqueness with 14

regards to mining of diamonds and resultant realizations” seem to give credence to such

concerns. While the first sale of Chiadzwa diamonds returned all payments due to the national

fiscus, the ministry complained that out of US$11, 9 million due as dividend payment from the

second sale only US$8 million was remitted. By the time the budget statement was made, the

ministry had not yet received receipts from the third auction. In previous budget statements as in

the 2011 statement, the ministry raised concerns over lack of transparency to the extent of

alleging at one point that diamond sales were made without the knowledge of the Ministry of

Finance and hence nothing was remitted.

f. In the context of HIPC, the assumption is that the pledged resources will go towards poverty

alleviation through the PRSPs. This sounds noble and attractive at face value but in essence it

brings with it perennial problems of policy space that have tended to characterize global political

economy. The Zimbabwe government like any government from time to time comes up with its

own short, medium and long term development strategies meant to better the conditions of its

people in one way or the other. Some of these strategies are already in place or are in the process

of being formulated. Never mind the wisdom or lack thereof, short comings or otherwise of

such strategies, one can say with certainty that the requirement for PRSPs as compliance requisite

negates and potentially undermines home grown development strategies that are already in place.

While the link between a specific policy strategy and poverty reduction is often debatable, such

strategies must be home grown and borne out of genuine consultation with citizens for them to

be legitimate and relevant. The current strategy fails to take cognizance of trade and

developmental imbalances within the limitations of neo-liberal globalization.

8

12 Thomas Jefferson, “Should We have Banks” (1813) in David Boyle's (ed), The Money Changers: currency reform from Aristotle to e-cash, Earthscan Publications, London, 2002

13 Ibid.

14 2011 National Budget Statement.

g. Pledging resources ignores the moral question of ecological debt – which argues that in fact it is

the developing and underdeveloped countries that are owed by the developed northern industrial

countries from centuries of resource plunder and exploitation and carbon emissions. If the

concept of ecological debt is to be brought to bear, it is possible to talk of “Highly Indebted Rich

Countries” (HIRC) in the stead of Highly Indebted Poor Countries (HIPC). HIPCs according to

this argument are actually Highly Owed countries though poor (HOPC).The notion of ecological

debt asserts that the rich north owes the underdeveloped south in years of slavery, exploitation of

natural resources (minerals, timber, soil etc) in the colonial and imperial past, ozone depletion and

climate change through industrial carbon emissions whose costs are born by all and mostly poor

south. The ecological debt owed to the south continues to grow through continual emission of

harmful substances by the industrial north into the atmosphere and unfair trade rules that shrink

development space for the South. Though this debt has been difficult to quantify in financial

terms, the moral argument has been that in actual fact it is the IMFs and their developed

industrialized capitals that owe the south. It is perhaps helpful to conclude by pointing out that

the recent ZIMCODD study on Ecological Debt in Zimbabwe broadens the definition of

ecological debt beyond the North-South and generational debts. It includes debt owed by,

“economically and politically powerful national elites who are benefiting from natural resources at the expense of

marginalized and poor citizens. The other category relates to the ecological debt that national governments, local

privately owned or state owned companies owe to local communities affected by their operations such as mining which

degrade the environment and result in exploitation of resources for export while the communities are left with no 15infrastructural or other economic benefits.”

7. The Budget kept a loud silence on Domestic debt

The current debt strategy if any does not seem to be giving much sense of purpose with regards to

domestic debt. In the 2011 Budget statement for example, there was not even mention of domestic

debt largely accrued by the RBZ. It may be that there is political resistance to enquiry into the RBZ

debt. However this remains a crucial aspect that needs to be dealt with if the country is to move

forward and as part of efforts to restore credibility at the central bank. While not much is know about

the nature of domestic debt in terms of what constitutes it, level of interest repayments and other

components, from experience domestic debt due to its short tenor tends to be very expensive (in

most African Countries attracting as high as 75% interest) which is cause for concern that this debt

might balloon if not addressed soon.

8. Conclusion

A common flaw with most donor and creditor driven poverty reduction initiative is the obligatory

result fixation on poverty alleviation without the needed investment in enablers such as building local

productive capacities and consolidation of internal revenue base. Strategies for debt must be located

within a broader developmental vision that balances growth and human development rather than a

myopic fixation on poverty reduction as if ending poverty is the means to an end. Poverty reduction

9

15 Dhliwayo and Mtisi in 'A Citizens Guide to Understanding Ecological Debt' ZIMCODD, Harare, 2010

is the end whose means need focusing on. A key principle of debt management is to make sure that

the cost of debt is kept at minimal while the very debt is employed to build repayment capacity and

develop a domestic debt market. Building internal and citizens based revenue capacity is crucial since

the link between taxation, state building and democratization is now commonly accepted.

Governments need to rely on citizens' tax contribution which creates a fiscal contract between the

state and citizens making it imperative for the former to account to citizens. One of the critical

challenges to democratization in Africa is the absence of this “fiscal contract”. In the end,

governments account more to donors and creditors with whom they have a fiscal contract. It is thus

necessary that any debt strategy be predicated elsewhere other than in a regime that perpetuates

dependency and continues to weaken local productive capacities.

That the government has adopted the HIPC initiative and pledging the country's natural resource is

cause for alarm. It means we are in for another round of conditionalities that will leave the country's

poor worse off. Resource pledging is tantamount to mortgaging the country's future and goes

against natural and generational justice. If one considers what appears to be failure to maximize

benefits that could have otherwise accrued from the country's natural wealth, (for example the

diamond, platinum and even gold) Zimbabwe's prospects appear gloom. Zimbabwe's ordinary poor

continue to bear the cost of debt in human and financial terms. In the interest of social and

economic justice it is necessary for creditors to immediately institute a moratorium on principal and

interest payments, whilst Parliament conducts an open, transparent and comprehensive audit of the

public debt. This audit will apply the doctrine of odious debts. This will include establishing what is

owed, the purpose of the loan, , disbursement, charges other than interest and benefits, if any to

citizens. Furthermore, loan contraction and debt management legislation must be reviewed and

reformed to ensure transparency, accountability and inclusiveness. Because Zimbabweans are held

liable for the debt it is only fair that they should be fully aware of why they have to pay. It would be

grossly unfair to expect citizens of this country to repay a debt that they had no share especially

under present circumstances when they are struggling to pay for their very own existence.

10

11

Notes

About ZIMCODD

The Zimbabwe Coalition on Debt and Development, ZIMCODD, is a socio-economic justice coalition established

in February 2000 to facilitate citizens' involvement in making public policy and practice pro-people and sustainable.

ZIMCODD views Zimbabwe's indebtedness, the unfair global trade regime and lack of democratic people-centered

economic governance as root causes of the socio-economic crises in Zimbabwe and the world at large. Drawing

from community-based livelihood experiences of its membership, ZIMCODD implements programs targeted at;

?Educating the citizen

?Facilitating policy dialogue among stakeholders

?Engaging and acting on socio-economic governance at local, regional and global levels

ZIMCODD's headquarters are in Harare with regional offices in Bulawayo and Mutare.

VisionSustainable socio-economic justice in Zimbabwe through a vibrant people based movement.

Mission

To develop capacities of Zimbabwean people to redress the debt burden and unjust trade practices, building and

promoting alternatives to neo-liberal agenda.

Objectives

To raise the level of economic literacy among ZIMCODD members to include views and participation of grassroots

and marginalized communities;

?To facilitate research, lobbying and advocacy in order to raise the level of economic literacy on issues of

debt, trade and sustainable development;

?To formulate credible and sustainable economic and social policy alternatives;

?To develop a national coalition, and facilitate the building of a vibrant movement for social and economic

justice.

ZIMCODD is affiliated to the Southern Africa Peoples’ Solidarity Network (SAPSN), Africa Jubilee South (AJS), Jubilee South, the Zimbabwe Social Forum (ZSF) and the African Forum and Network on Debt and Development (AFRODAD).

Acknowledgements

ZIMCODD Contact DetailsHead Office Southern Region Office Mutare OfficeP. O Box 8840 , Harare 25A Jason Moyo Street, Cnr.1st Ave Suite 104 Old Mutual CenterTel/Fax:+263-4-776830/31/35 Bulawayo MutareEmail:zimcodd@zimcodd.co.zw Tel/Fax : +263-9-62064 or Tel 020-68125Website: www.zimcodd.org.zw +263-9-886594/95

ZIMCODD would like to thank Mr. Showers Mawowa for producing this Policy Brief. Showers Mawowa is the Policy and Advocacy Economist at ZIMCODD.

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