The national debt is the public and intra-governmental debt owed by the government. It is also called sovereign debt, country debt, or government debt.


It consists of two types of debt. The first is debt held by the public. The government owes this to buyers of its bonds. Those buyers are the country’s citizens, international investors, and foreign governments.

The second type is intra-governmental debt. The government owes this to other government departments. It often funds government and citizens’ pensions. The government adds to the debt whenever it spends more than it receives in tax revenue. Each year's budget deficit gets added to the debt. Each budget surplus gets subtracted.[1]


Politicians and their voters become addicted to deficit spending. It's called Expansionary Fiscal Policy (Expansionary Fiscal Policy in Zimbabwe). The government expands the money supply in the economy. It uses budgetary tools to either increase spending or cut taxes. That provides consumers and businesses with more money to spend. It boosts economic growth over the short-term.

RBZ debt accumulation above US$2bn

THE US$2,23 billion debt accumulated by the Reserve Bank of Zimbabwe (RBZ) in the 12 months since July 2019 could be grossly understated, as fresh details emerged indicating the central bank could be violating borrowing rights to sustain the Foreign Exchange Auction System. It also emerged that the debt unveiled is a result of subsidies that the government has been dishing out especially to the energy sector.

In June 2020 RBZ relaunched the auction system in a bid to stem the rapid depreciation of the local unit against the greenback in a volatile macro-economic environment characterised by limited foreign currency inflows and runaway inflation which stood at more than 650% for the month of August 2020.

Analysts previously warned that governments’ re-introduction of the forex auction system could have disastrous consequences because the country did not have adequate sources of foreign currency with receipts expected to drop by US$3 billion this year, worsening the country’s forex woes. The central bank has been allocating an average of US$11, 8 million per week since June 2020 with total allotments as at October 13, 2020 totaling US$319,9 million.

Besides Zimbabwe being heavily indebted there has been concern on the secrecy that surrounds debt accumulation as part of the central bank and government ministries’ debts are not accounted for in the government’s book. The national debt now is estimated at over US$25 billion.[2]

Debt to Gross Domestic Product (GDP) ratio

The Zimbabwe Economic Policy Analysis and Research Unit (Zeparu) says the country’s debt to Gross Domestic Product (GDP) ratio will balloon to 101,6% by end of 2020 due to legacy debt, farmers’ compensation and COVID-19. On May 4, 2020, government announced an $18 billion COVID-19 economic recovery stimulus package to deal with the effects of the global pandemic. But, since this was not budgeted for, it was likely to increase public debt as the government mobilises resources to fund the stimulus as it has no access to international credit lines. This comes at a time government is already in high debt distress with external debt estimated at nearly US$11 billion and $8,868 billion domestically as at December 2019.

“The public and publicly guaranteed external debt to GDP ratio for 2019 was 47,6% and was projected to increase to 51,5% in 2020 (International Monetary Fund, 2020). This debt position does not take into account the legacy debts incurred by the Reserve Bank of Zimbabwe through compensation of some stakeholders for losses incurred following the currency conversion estimated at about US$1,2 billion and farmers’ compensation,” said Zeparu in its new May 2020 economic barometer.

“The public sector debt to GDP ratio including legacy debt and farmers’ compensation jumps from about 51,8% estimated for 2019 to a projection of about 101,6% in 2020, which is beyond the 70% debt threshold as espoused in the Public Debt Management Act (chapter 22:21) and the Transitional Stabilisation Programme (October 2018 – December 2020).”

Zeparu added: “The debt is projected to remain high and unsustainable even up to the year 2029 at 83,8% of GDP. Without taking into account legacy debt and farmers’ compensation, it appears as if the debt falls within the threshold and, therefore, the debt position is sustainable”.[3]

2021 Mid-Term Budget Review

As at end December 2020, total Public and Publicly Guaranteed external debt including the Reserve Bank of Zimbabwe's external guaranteed debt amounted to US$10.5 billion, representing 71.2% of GDP. External debt arrears alone make up over US$6.5 billion (77%) of total external debt.[4]


  1. Kimberly Amadeo, [1], The Balance, Published: 13 October, 2020, Accessed: 28 October, 2020
  2. Melody Chikono, [2], Zimbabwe Independent, Published: 23 October, 2020, Accessed: 28 October, 2020
  3. Tatira Zwinoira, [3], Newsday, Published: 8 June, 2020, Accessed: 28 October, 2020
  4. , [4], Ministry of Finance, Published: 29 July, 2021, Accessed: 31 July, 2021