Although there is general consensus that an economy sinking in unsustainable debt must desist from borrowing, this is a point that unfortunately needs to be driven home hard to President
Only this week the
This was despite an agreement that government would put a
The SMP is an informal agreement between country authorities and the fund's staff to monitor the implementation of the authorities' economic programme to help the country out of the woods.
Ironically this comes after Finance minister
While many had commended Chinamasa for setting up the office, hopefully as a signal government had resolved to deal with the country's precarious debt situation, contrary government actions betray lack of commitment.
What Mugabe's government is doing with non-concessional borrowing with regards to the country's debt overhang is akin to a company that has a high gearing ratio and sinking into debt accruing expensive short-term debt, at a time it is also toying with the idea of rescheduling existing debt.
Against such a background, many believe the debt office is a sheer waste of time as
Government should instead revive the productive sector and create capacity to repay its debt, instead of the current token payments.
Unsurprisingly, the plan to set up a debt office has in some quarters been seen as a desperate attempt to deepen relations with the IMF under the SMP and a futile effort to hoodwink the fund into believing they are singing from the same book with regards to the debt situation.
Analysts say you cannot talk of managing debt when you are continuously immersing yourself in the debt you purport to be desperately seeking to break free from. The warning should be obvious: When in a hole, stop digging!
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