As Zimbabwe lays its hands on another hand out, one cannot help but wonder for how long this country will run on borrowed money. Calling it a ticking time bomb might seem appropriate, because as the national debt continues to balloon and we continue to stretch out our begging bowl, something soon is meant to give. Yesterday, Zimbabwe started drawing down on the $250 million line of credit facility that was availed by a United Kingdom-based firm, Gemcorp Capital. This is the one of the facilities that has been secured by Finance and Economic Development Minister Professor Mthuli Ncube and Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya.
According to the Government of Zimbabwe, the facility is meant to support the importation of intermediary goods such as fuel, so as to sustain the economy. The timing of the facility is great as the country is facing serious foreign currency shortages, largely caused by an imbalance in trade balances and uncontrolled government expenditure. Facilities such as these come as a relief to many but one should go further and ask themselves the following questions that more often than not remain unanswered.
- Who exactly stands to benefit from these facilities?
- How are we as a country going to repay this money?
- We have not been given this amount free of charge. What is the interest rate applicable on the $250m?
- How we are going to mitigate the interest rate in order not to be seen to default again causing more woes to the suffering people?
- Why we seem to be investing recurrent expenditure like intermediary goods instead of physical expenditure?
- We have an already existing debt of over $1.8bn, why do we continue to borrow? Surely you cannot service a debt by another debt.
- Will the facility be used for its actual purpose?
These and a lot of other questions remain unanswered as we ride in the bus being driven by our beloved Professor Mthuli Ncube. I hope we don’t get lost given that we already don’t have enough fuel in the country to be going in circles. We await and see…
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