This comes at a time when civic organisations such as the Zimbabwe Coalition on Debt and Development (Zimcodd) have called on the government to realise and fully acknowledge that Zimbabwe was in a serious debt crisis and its resolution should involve civil society organisations.
Trade and finance specialist Persistence Gwanyanya, who is also Bullion Leaf managing director, said there was a need for long-term strategies to permanently tackle Zimbabwe’s debilitating debt situation. He said the huge public debt suffocated public and social service delivery as it dated back to the colonial era.
“We now have a situation where there is 100% in excess of GDP debt accumulation and every dollar produced is now going towards repayment of debt, and that causes currency instability,” Gwanyanya said.
“The first thing that we need to do is to address the debt level, and the only way to reduce that debt is to reduce the budget deficit and maintain a surplus.”
Gwanyanya said Zimbabwe was not living as a going concern because of its frosty external relationships, adding that it was important to maintain confidence among Zimbabweans because most budget projections seemed to be academic exercises. He also suggested the country could start with full dollarisation but also make a decision on the right time when local currency could be reintroduced. “We overstayed full dollarisation until 2019 when we abandoned it. The US dollar did not guarantee economic growth so it failed to grow and jobs continued to be lost. We cannot have two currencies circulating at the same time because one would be stronger than the other, and the weaker one would be swallowed by the stronger one. Dual currency is not the best and eventually the country needs its own currency,” he said.
Gender specialist Dorcas Makaza said the 2021 national budget must be gender responsive and accommodate the needs and interests of socially disempowered women and youth.
Makaza said some policies undermined certain groups in society and therefore, the national budget must be scrutinised by ministries, MPs and civil society to ensure that it is gender responsive. She said the 2% transaction tax that was introduced through austerity measures further impoverished women as it took away their little spending power.
“The 2% was taken away from the little money they made in their businesses and this resulted in women failing to realise profits resulting in a vicious cycle of poverty.
“The mobile money scenario where there was a ZW$5 000 (US$61,50) limit was introduced to control the parallel market but the end users also suffered more. Mental health has also become the major disability in Zimbabwe as 20% of our people suffer from mental health issues which are related to the high suicide rates.”
