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ZIMCODD analyses Public Finance Management Bill
Zimbabwe Coalition on Debt and Development (ZIMCODD)
September 02, 2009

ZIMCODD has produced an analysis of the Public Finance Marketing (PFM) Bill targeted at legislators and other stakeholders. The policy Brief, entitled 'Loan Contraction and Debt Management in the Public Finance Management Bill 2009' examines aspects of the bill which relate to how the country acquires new loans and manages its debt. Part V1 of the bill specially deals with loans, guarantees and other related commitments.

The PFM Bill also seeks to repel the State Loans and Guarantees Act [Chapter 22:13] and the Audit and Exchequer Act [Chapter 22:03] and to provide for matters incidental to or connect with them. Section 4(3) of the bill further says that in the event of any inconsistency between the PFM bill and any other legislation, the PFM bill would prevail. The PFM bill is therefore clearly meant to be the central part of a new regulatory framework for public finance.

Confirming the development, the organizations Director, Dakarayi Matanga said that the copies of the brief had been sent to parliament for legislators to consider. "As a civic group working on social and economic justice, and the problem of indebtedness, we are keen to contribute ideas on policy formation and tat will help the country get out of its current debt burden," said Matanga.

ZIMCODD was motivated to analyse the bill, and make recommendations to strengthen it were it focuses on loan contraction and debt management based on the view that the, "causes of the debt crisis in many African countries are also attributed to poor debt policy, a weak institutional and legal framework and lack of accountability transparency and inclusiveness of the involved institutions in the loan contraction process."

The government is also actively engaging donor countries and multilateral agencies in order to reopen external lines of credit to fund Zimbabwe's economic recovery.

Whilst it is looking forward to receiving external assistance for an economic turnaround, Zimbabwe is also saddled with an unsustainably high level of external debt, estimated to be in the region of US5 bilion.this debt, the bulk of which is owed to multilateral funding agencies is expected o grow to US7 billion by 2011 according to some projections if it is not addressed and reduced in a consistent and systematic fashion

According to ZIMCODD brief, "the people through the taxes they pay are ultimately liable for the repayment of public debts. This regardless of whether they were aware of the debts or not, and whether the loan proceeds were used properly, or misused so that they did not benefit the country. "This means that the process by which debtors countries agree to take on the terms and conditions for loans need to be opened up to scrutiny by citizen groups and their representatives in Parliament and other formal democratic structures.

ZIMCODD, is also concerned that unsustainable debts have to pay off at the expense of financing adequate and effective social services such as health, education, and infrastructure .an analysis done by ZIMCODD on social effects of public debt Zimbabwe shows that the government expenditure towards payments on total debt reached a peak of 40 times an much as expenditure on social welfare between 1996 and 2001.

Visit the ZIMCODD fact sheet

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