UNPACKING THE LINKAGE BETWEEN DEBT, EXTRACTIVES SECTOR, INEQUALITY AND ILLICIT FINANCIAL FLOWS

The document argues that Zimbabwe's reliance on resource-backed loans and a lack of transparency in the extractives sector have fueled illicit financial flows and widened inequality. It highlights that while mining is a cornerstone of the economy, benefits fail to reach the poor because revenues are diverted to debt servicing and lost to corruption. The study recommends that Zimbabwe join the Extractive Industries Transparency Initiative (EITI) and embed tax justice into its governance models to protect national resources and improve social spending.

• Zimbabwe's public debt is estimated at US$ 9.2 billion, with significant arrears to the World Bank (US$1.2 billion), the African Development Bank (US$ 0.6 billion), and the European Investment Bank (US$ 0.3 billion) as of 2019.
• The extractives sector is a primary driver of the economy, contributing approximately 37% to GDP according to one source and 16% in 2019 according to another, yet it is highly vulnerable to illicit financial flows (IFFs).
• Approximately 70% of funds from the extractives sector are lost to illicit financial flows, which are facilitated by high-level discretionary political control, secrecy, and complex financial processes.
• The Zimbabwean government utilizes Resource-Backed Loans (RBLs), often with China, where mineral wealth such as platinum deposits are used as collateral for infrastructure development, but these deals often lack transparency and public scrutiny.
• High levels of public debt and IFFs directly exacerbate inequality by diverting funds away from essential social services like healthcare, education, and sanitation, placing the burden of debt servicing on the poor and marginalised.

APA

Lupahla, P. (2020). UNPACKING THE LINKAGE BETWEEN DEBT, EXTRACTIVES SECTOR, INEQUALITY AND ILLICIT FINANCIAL FLOWS. African Forum and Network on Debt and Development. https://afrodad.org/sites/default/files/publications/Inequality-and-Illicit-Financial-Flows.pdf

Chicago

Lupahla, Precious. UNPACKING THE LINKAGE BETWEEN DEBT, EXTRACTIVES SECTOR, INEQUALITY AND ILLICIT FINANCIAL FLOWS. African Forum and Network on Debt and Development, 2020. https://afrodad.org/sites/default/files/publications/Inequality-and-Illicit-Financial-Flows.pdf.

Wikipedia

{{cite report |last1=Lupahla |first1=Precious |title=UNPACKING THE LINKAGE BETWEEN DEBT, EXTRACTIVES SECTOR, INEQUALITY AND ILLICIT FINANCIAL FLOWS |publisher=African Forum and Network on Debt and Development |date=2020 |url=https://afrodad.org/sites/default/files/publications/Inequality-and-Illicit-Financial-Flows.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lupahla2020unpacking, author = {Lupahla, Precious}, title = {{UNPACKING THE LINKAGE BETWEEN DEBT, EXTRACTIVES SECTOR, INEQUALITY AND ILLICIT FINANCIAL FLOWS}}, institution = {African Forum and Network on Debt and Development}, year = {2020}, url = {https://afrodad.org/sites/default/files/publications/Inequality-and-Illicit-Financial-Flows.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }