THE United States says Zimbabwe’s structured debt dialogue which is anchored on a raft of economic and political governance reforms is key in unlocking concessional funding for the debt-troubled southern African nation.
BERNARD MPOFU
The Finance ministry has resumed negotiations with creditors and the international community as Treasury seeks to resolve Zimbabwe’s nagging debt overhang. With the country remaining in debt distress while borrowing is limited, public debt has continued to increase, driven by external arrears and legacy debt.
Official figures show that despite making token payments over the past few years, Zimbabwe’s total debt stock has soared to US$18 billion as of December 2023.
Two years ago, Zimbabwe established a structured dialogue platform— led by African Development Bank president Akinwumi Adesina and facilitated by former Mozambican leader Joaquim Chissano — with all creditors and development partners in order to institutionalise negotiations on economic and governance reforms to underpin the arrears clearance and debt resolution process.
Political interference and policy reversals have often been cited as some of the reasons unnerving potential investors from injecting capital into the debt-ridden southern African nation.
“The Zimbabwe Democracy and Economic Recovery Act (Zidera) has not changed. Zidera is a legislative act and is not a sanction,” the US embassy in Zimbabwe says in an explainer published on its X handle.
“The United States has never used Zidera to oppose international financial institution loans or debt restructuring for Zimbabwe. Zidera outlines a clear roadmap for the United States to support government of Zimbabwe access to concessional financing and possible debt restructuring but this could only happen once government of Zimbabwe has paid its outstanding debt arrears to the international community. This is why the AfDB-facilitated dialogue is so important. The issues of democratic governance, economic reform and land reform addressed in that dialogue relate to many of the issues cited in Zidera.”
In March, US President Joe Biden terminated the Zimbabwe sanctions programme and replaced it with the Global Magnitsky regime which focuses on 11 individuals who include President Emmerson Mnangagwa and three companies.
Washington accuses the designated individuals and companies of aiding the violation of human rights in Zimbabwe. Harare dismisses the charge and wants the sanctions to be lifted.
As consistently reported by The NewsHawks, Zimbabwe faces a herculean task in improving its ranking on the Mo Ibrahim Index as the country commits to far-reaching political governance reforms in order to cosy up to creditors.
The Mo Ibrahim Foundation defines governance as the provision of political, social, economic and environmental goods that citizens have the right to expect from their state, and that a state has the responsibility to deliver to its citizens.
According to the Arrears Clearance and Debt Resolution Process Governance Reforms Matrix, Zimbabwe agreed upon seven sub-indicators under the Mo Ibrahim Index and has undertaken to improve on its rankings.
The sub-indicators are: Democratic elections; absence of violence against civilians; impartiality of the judicial system and judicial processes; civil society space; institutional checks and balances; and transparency in public procurement procedures.
Zimbabwe currently scores 49.54 (in 2022) out of 100.0 in overall governance, ranking 29th out of 54 in Africa. The country scores lower than the African average (48.9) and lower than the regional average for southern Africa (54.2).
Under the implementation matrix seen by The NewsHawks, Zimbabwe seeks to improve the governance index to 51.03 this year from 49.54 reported last year. Next year, the country sees the score improving to 52.56 before further climbing to 54.14 the following year.
Published since 2007, the Ibrahim Index of African Governance assesses governance performance in 54 African countries over the latest available 10-year period.
It provides a framework and dashboard for any interested audience to assess the delivery of public goods and services and public policy outcomes in African countries.
