Uncovering Zimbabwe’s debt
3.5 The impact of debt in the 1990s Through the 1990s Zimbabwe continued to pay around US$600 million a year in debt repayments. In 1991 and 1992 debt shot up as new loans were given in order to ‘support’ the structural adjustment programme and in response to the devastating drought. But even during the 1991/92 drought years debt repayments were almost as high as the new loan disbursements. As the 1990s continued loan disbursements fell though debt repayments remained high, shooting up to US$1 billion in 1998 – a gigantic 15 per cent of national income. In the early 1990s, Zimbabwe’s debt service once again reached 30 per cent of exports, and stayed above 20 per cent until default in 2000.108 From the mid-1990s the combination of repayments and lack of new loans meant that Zimbabwe’s debt finally began to fall; but this meant the net outflow of resources (the difference between loan disbursements and repayments) from the country increased. By 2000 the government simply could not afford to keep paying its foreign debts. In 2000 the government began to default on loans.
Through the 1990s, debt owed to private creditors fell. Private banks were effectively being bailed-out by the multilateral lenders. Structural adjustment loans were used to repay foreign private debts so that Zimbabwe would not need to consider defaulting. By the time Zimbabwe eventually defaulted, much of the debt owed to foreign private creditors had been paid off.
Protesters form a human chain in Harare calling for Zimbabwe’s debt to be dropped, December 1998
Debt service 1990-2001 (per cent of exports and per cent of GDP)107 Debt service as per cent of exports Debt service as per cent of GDP
40 35 30
25 20 15 10 5 0
1991 1992 1993 1994 1995 1996 Year
1997 1998 1999 2000 2001
Uncovering Zimbabwe's Debt