Zimbabwe’s President Emmerson Mnangagwa hosted creditors and finance executives on Monday to discuss plans for clearing the country’s $12.7 billion external debt and restructuring arrears.
With the nation’s debt representing 81% of its GDP, the task is daunting for a country with a history of financial crises, including hyperinflation and failed currency reforms.
Mnangagwa revealed that Zimbabwe is negotiating a Staff Monitored Program (SMP) with the International Monetary Fund (IMF), which would pave the way for key policy reforms. African Development Bank (AfDB) President Akinwumi Adesina expressed the AfDB’s readiness to provide financial support for these reforms and help clear arrears.
Finance Minister Mthuli Ncube said timelines for debt restructuring would be clearer by mid-2025, once Zimbabwe secures bridge financing from lenders. Analysts warn that addressing arrears is crucial for the country’s economic recovery, as Zimbabwe currently cannot access funds from the IMF due to its debt situation.
Clearing arrears with major creditors, including the AfDB, World Bank, and European Investment Bank, is key to unlocking future funding. The IMF has been unable to provide financial support due to Zimbabwe’s unsustainable debt.
While the SMP would not include financial aid from the IMF, it would signal a return to sound economic policies. Zimbabwe’s debt situation remains complex, with a significant portion of the debt in arrears and penalties, limiting access to international financial assistance.
Source: Africanews
