Zimbabwe's debt - a compelling case for an audit

Zimbabwe's debt - a compelling case for an audit
Published: 25 January 2012 (1769 Views)
The rejection by UK Development Minister Andrew Mitchell of civil society calls to audit Zimbabwe's US$7 billion debt before relief under HIPC 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.

Resistance to an audit of Zimbabwe's debt can be viewed as running counter to the Manila Consensus on Public Financial Management (PFM) of June 2011 comprising  Partner Countries including the UK, multilateral and bilateral development organisations, parliaments and civil society organisations (CSOs).

According to OECD, Partner Countries were called upon to demonstrate their political commitment to strengthening PFM and to increase transparency for better accountability to the public including through civil society organisations (CSOs) for all public resources.

It is therefore, understandable that Zimbabwean CSOs are demanding transparency because that principle should be seen to be applied universally regardless of the region – whether it's in the North, South, East or West.

The reason why Zimbabwe's debt should be audited should be obvious to everyone who has bothered to follow closely developments in the southern African country.

Since the late 1990s to 2009, Zimbabwe was mired in controversy ranging from arms trading, state-sponsored violence, negative world records in terms of 3.2 quintillion percent inflation, corruption, suspected money laundering and run-way poverty.

While the Highly Indebted Poor Countries (HIPC) initiative is being proposed as a better evil to other options, it is no panacea to Zimbabwe's debt problem, because HIPC will only provide reprieve for debts owed to International Financial Institutions and Paris Club pre-2004.

It is a matter of common knowledge that Zimbabwe has no post 2004 debt with IFI and the Paris Club, however any debt accumulated post 2004 is with non-traditional donors and this will not be included under the HIPC. For instance Zimbabwe's run-away debt with China will still need to be repaid.

It is worth noting that other than doing nothing about the debt, Zimbabwe has also utilised the so-called Angola Model of debt relief, whereby Mugabe reportedly entered into a ‘platinum backed' loan facility agreement with China in 2009.

This involved mortgaging Zimbabwe's natural resources by giving China a 50% stake in a platinum concession worth US$40billion in return for a US$5 billion loan to Zimbabwe.

According to financial experts, China would make a US$15billion profit (300%) from a US$5 billion loan at the end of the transaction – representing a monumental loss to the present and future generations.

Zimbabwe's civil society is justified to demand transparency in the country's financial commitments to both Western countries and China because some of the debts are shrouded in mystery.

For example, exact figures of China's arms sales to Zimbabwe are hard to come by because neither country allegedly submits reliable reports to the United Nations Register of Conventional Arms or to the U.N. Commodities Trade Statistics Database (Comtrade).

According to Human Rights First, although the two countries do submit import and export figures to Comtrade, their reported figures are inconsistent and too low to be credible.

Among the most implausible examples is Zimbabwe's report of Z$205million worth of tanks and other armoured fighting vehicles imported from China in 2005, and China's report of only US$50million worth of small arms sales to Zimbabwe from 2000-2006.

How were those weapons paid for when the country was on its knees? If they were loans, why should they be paid in view of the state-sponsored violence seen in Zimbabwe over the years around election time since the late 1990s?

Similarly, in 1984, the Thatcher government sold Zimbabwe a large number of Hawk fighter planes at a time of the Gukurahundi massacres in Matabeleland (See Daily Mail, How can we be so blindly stupid as to sell arms to despots then bleat about democracy? 24/02/11).

It is, therefore right and proper for a Parliamentary Debt Audit Commission to conduct a forensic audit of Zimbabwe's debt in the same way developed countries probe their debts as a constitutional requirement for checks and balances vis-à-vis the executive.

There is a compelling case for an audit of Zimbabwe's debt especially as there are reasons to suspect foul play, with poverty and typhoid ravaging the country despite abundant diamonds, gold and platinum resources.

The Jubilee Debt Campaign deserves the support of all Zimbabweans of sound thinking.

-------------------
Clifford Chitupa Mashiri, Political Analyst, London zimanalysis2009@gmail.com


- Clifford Chitupa Mashiri

Tags: Debt, Audit, HIPC,
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