Zim debt audit ‘critical’ for future transparency

An audit of an estimated US$7 billion worth of debt owed by Zimbabwe is critical for future transparency, according to a political analyst and former diplomat.

A campaign for an audit of the multi-billion dollar debt was launched last year after reports that some of the money could have been used by the then ZANU PF government to fund repression. Last December, the Zimbabwe Europe Network, the Jubilee Debt Campaign Coalition and European Network on Debt and Development called for the immediate audit of the loans, offered to Zimbabwe since the 1990s, detailing how some of the money was used.

“At least US$750 million of debt came directly from structural adjustment loans from the IMF, World Bank and African Development Bank which lowered economic growth and increased unemployment,” reads the report by the three organisations.

The report revealed that Zimbabwe’s £210 million debt to the United Kingdom included loans from Tony Blair’s government to Zimbabwe’s police force. According to the report, police were loaned money in the 1990s to buy 1 500 Land Rovers, backed by UK Export Finance, then known as the Export Credits Guarantee Department, a unit of the Department for Business.

Finance minister Tendai Biti last year initiated negotiations to have its debts cancelled by being declared a heavily indebted poor country (HIPC), an initiative managed by the World Bank, the International Monetary Fund (IMF) and the African Development Bank (AfDB). Biti has said that Zimbabwe’s debt was precluding the country from desperately needed fresh lines of credit and HIPC status will ensure the debts are written off.

But the international civic bodies who released the report last year have not supported this plan, urging instead for Parliament to first create a “Debt Audit Commission” which would investigate how the debt was run up and who benefitted from the loans.

A UK Minister has since reportedly rejected an audit before admitting Zimbabwe into the HIPC initiative. The Daily News newspaper this week reported that it had seen a letter in which Mitchell rejects calls for the audit, saying that international donors were not the primary cause of Zimbabwe’s economic decline.

“President Mugabe’s reckless economic mismanagement bears the major responsibility for the crisis that reached its nadir in 2008, with hyperinflation, the near collapse of basic services and a humanitarian crisis that affected more than seven million people,” Mitchell’s letter reportedly says.

The letter also reportedly says: “Attempting after the fact to distinguish between legitimate and illegitimate debts could cause lenders to refuse to provide further loans and would be catastrophic for developing countries attempting to strengthen their economies and reduce poverty through accessing international financing.”

Political analyst and former Zimbabwean diplomat Clifford Mashiri told SW Radio Africa on Thursday that this position by the UK minister is “regrettable.”

“Whenever an audit is resisted, it inevitably raises eyebrows. Some suspect those against the audit have something to hide because of the potentially embarrassing revelations,” Mashiri said.

He added that an audit is critical is Zimbabwe is to learn lessons from its past and proceed down a transparent economic path.

“Transparency is a principle that needs to be applied universally, and Zimbabwe needs to move forward in this way,” Mashiri said. – SW Radio Africa

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