Zimbabwe’s domestic public debt has risen, exceeding 100% from about US$3.7 billion in 2016 to about US$ 9.5 billion in 2018. For the past 5 years, GDP growth in Zimbabwe has been
below 5% averaging 3% per year. The government should direct resources from debt to capital projects that have ability to payback and also towards productive sectors of the economy,
contrary to funding recurrent expenditure. In the absence of effective monetary policy, the government should strengthen the soundness of its fiscal position through the promotion of foreign
direct investment policies and improve capacity utilization across key sectors of the economy. There has been a significant rise in domestic debt, constituting a large share of the total public debt. Hence, the government should formulate and implement prudent domestic debt management strategies to mitigate the effects of rising debt on the economy.
