Crippling debt, lack of transparency and endemic corruption are sadly all too familiar stories in southern Africa. But now, in a landmark court ruling, Zimbabwean citizens have successfully demanded accountability from their government.
For citizens seeking truthful disclosure about exactly how much debt the country is in, the ruling made in their favour on 1 December signals a big victory in the fight for transparency. However, it stands to be seen to what extent government will comply with the ruling.
The ruling comes at a time when government has been pushing for constitutional amendments that would make the executive unaccountable to legislature regarding all foreign debts. Such an amendment would be a big blow to the quest for transparency. The government stands accused of guaranteeing loans from pan-African multilateral lender, Afreximbank, and other financiers using national resources without disclosure about the terms of the deals.
Harare North legislator Allan Norman Markham and the Community Water Alliance Trust, a civil society organisation, took finance minister Mthuli Ncube, the central bank and Afreximbank to court in September last year over the issue of full disclosure of financial agreements made by government and external lenders.
In his litigation, Markham sought the nullification of a USD500 million loan facility from Afreximbank to back the Zimbabwe currency, because it had been awarded without parliamentary approval. Zimbabwe had reportedly offered platinum production as collateral for the loan, in a move that showed lack of transparency.
Headquartered in Cairo, Egypt, Afreximbank was established in 1993 by African and non-African private and institutional investors for the purpose of financing, promoting and expanding intra-African and extra-African trade. However, most transactions between the government and Afreximbank have been made without full disclosure, in violation of section 300 (3) of the Constitution.
Zimbabwe’s finance ministry permanent secretary, George Guvamatanga, admitted, in earlier opposing papers, that the USD500 million loan should have had parliamentary approval, but argued that cancelling such loan would be a breach of contract.
Zimbabwe’s high court ruling compels finance minister Mthuli Ncube to publish all loans and guarantees entered into by government from 1 January 2019 to 1 December 2020. The finance ministry is also expected to gazette all details of the Afreximbank loans by January 2021.
The court did not grant Markham’s application to nullify the USD500 million loan facility but ruled that the terms of the agreement be made public.