- debt sustainability, debt sustainability theory, external debt, domestic debt, debt trap
Abstract
Zimbabwe’s efforts to reduce domestic and external debt to lower levels remain futile. It continues to grow. In December 2018 domestic debt stood at 98% of GDP, external debt at 70%. It has accelerated the re-engagement with the World Bank, IMF, AfDB and EIB and bi-lateral creditors. The study sought to analyse the sustainability of the growth in Zimbabwe’s debt. The objectives were namely to identify the key fiscal and macroeconomic variables that influence public debt dynamics in Zimbabwe; assess the effects of unsustainable debt on economic growth and development in Zimbabwe; and to explore strategies of managing debt sustainability. Data was collected through in-depth interviews and questionnaires. The study concluded that Zimbabwe’s debt is not sustainable due to non concessionary debts, limited productivity and weak institutional frameworks. Government should conduct a comprehensive debt audit to determine legitimate and illegitimate public debt, strengthen institutions and regulatory framework.