Debt, Extractivisim and Climate Change Nexus Important for Zimbabwe
This week, the world’s focus has been on the 26th United Nations Climate Change Conference (COP26).
For Zimbabwe, the major talking point has been the visit by Zimbabwean government officials which saw in over two decades, a Zimbabwean state leader visiting the UK. Beyond the sensational news headlines and stories, pictures, and videos of shopping trolleys of expensive alcohol in preparation of a welcome party for the President as well as the “blotted” entourage, Zimbabwe’s message missed the mark by failing to outline and articulate the nexus between debt, extractivism and climate change.
Zimbabwe’s development has been hinged on Extractivism which is the process of extracting natural resources from the Earth to sell on the world market. Since the popular economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIMASSET) of 2013, the economic model of Zimbabwe has primarily been anchored on extraction or removal of natural resources that are considered valuable for exportation worldwide. With that economic decision, the country needs unfettered attention on sustainable mining to curb the increasing climate threat and ensure the environment is safe for other economic activities such as farming.
The address by President Emmerson Mnangagwa at the COP26 conference fell short on the expectations of those concerned about the environment.Even though he pledged his government’s fight against deforestation and climate change, his address failed to articulate how the current drive towards extractivism by the government will be done in an environmentally sustainable way. The government is criticized for giving large tracks of land to mining companies who are not carrying out the legislated environmental impact assessments while also allowing the extensive use of unclean sources of energy such as coal in these mining ventures.
Another missed opportunity in the President’s address to the 2021 United Nations Climate Change was to tackle the issue of debt when he urged developed countries to pay for causing global warming by emitting gases into the atmosphere. Although he mentioned that developing nations like Zimbabwe were paying for the consequences of those emissions, he should have gone a step further to show the link of how these climatic conditions have further put developing countries in debt which already, they have been struggling to sustain. The albatross of debt for Zimbabwe has on one hand driven its appetite for extractivism which is a driver for climate induced impacts if not managed sustainably whilst on the other the already existing climatic changes have caused havoc and compromised the country’s capacity to repay its debt. As of December 2020, total external debt amounted to US$10.5 billion, representing 71.2% of GDP.
Besides its other deficiencies in public resources management such as corruption, the country’s capacity to repay some of its huge debt should also be understood within the context climate change impacts such as cyclones. In 2019 for example, the country experienced Cyclone Idai, the catastrophic tropical cyclones that affected Africa and the southern hemisphere.Cyclone Idai caused tragic loss of life and caused destruction of properties, infrastructure (roads, schools, clinics) in central Mozambique, Malawi and eastern Zimbabwe. The World Bank estimated that Zimbabwe faced about USD 622 million in damages and losses due to Cyclone Idai across its nine districts in the eastern side of the country (World Bank, 2020).
To “build back better” and restore the damaged infrastructure and livelihoods, Zimbabwe requires approximately USD 1.1 billion. Previously, other climate induced impacts such as draughts have also reeled off the country from its development trajectory.During the 1992 drought, the Zimbabwean government incurred unplanned budget of over Z$1 billion in drought relief (particularly on food imports) and as a result its public debt increased sharply from 54.9 % of GDP in 1991 to 59.3 % of GDP in 1992 (Lenneiye, 2000). The 1992 drought negatively impacted on the ability of the Zimbabwean government to re-pay the loans accrued from international financial institutions like IMF and the World Bank and destabilised the implementation of the Economic Structural Adjustment Programme.
Whilst the call by the President at the COP26 Conference might be justified, there is a need for deliberate effort by the government to revisit some mining activities and assess their impact on the land, people, and animals.The mining activities are heavily impacting parts of the Hwange rural areas where it is reported that the underneath ground erupts into coal fire and several children have since sustained deep burn injuries and nothing has been done to investigate or have any measures been taken to relocate residents at high risk in these areas.
In a related case of negative consequences of the mining activities in Hwange, mining water related pollution has largely affected some parts of Hwange. Coal, which is being mined in Hwange, in Mashanga ward is polluting Deka river. Mining companies in Hwange carry out their activities and the residues flow into the main source of water (Deka river) for the surrounding communities. The river flows up to the Zambezi River. Companies such as Hwange Colliery Company and Zimbabwe Power Company pollute the river through their mining activities. In one of the communities which relies on the Deka river as the main source of water, the people have brown teeth and swollen stomachs because of the contaminated and polluted water, which is full of manganese and other chemicals. By understanding the debt, extractivism and climate change nexus, the country’s mitigation and adaptation could increase government revenues, decrease public spending, and ultimately lead to debt sustainability in Zimbabwe.
However, addressing the impacts of climate change is not a magic bullet as the country still needs to ensure good public finance management through improved transparency and accountability. Furthermore, Zimbabwe needs to strengthen its climate change early warning systems, consider domestic and international climate risk insurance and lobby for debt relief and concessionary loans from the creditors and international financial institutions.Other challenges confronting the climate action in Zimbabwe and elsewhere that were not adequately tackled include lack of adequate budgetary support, weak human and institutional capacity, poor coordination, and harmonisation as well as duplication of roles and responsibilities among the stakeholders involved in the fight against climate change.