On Monday, November 25, 2024, Zimbabwe’s President Emmerson Mnangagwa hosted creditors and finance executives to discuss strategies for addressing the country’s $12.7 billion external debt and restructuring arrears.
With debt representing 81% of its GDP, Zimbabwe faces significant challenges, compounded by its history of hyperinflation and failed currency reforms.
Mnangagwa announced that Zimbabwe is negotiating a Staff Monitored Program (SMP) with the International Monetary Fund (IMF), which would pave the way for crucial policy reforms.
African Development Bank (AfDB) President Akinwumi Adesina reaffirmed the AfDB’s commitment to supporting these reforms and helping clear arrears.
Finance Minister Mthuli Ncube stated that clearer timelines for debt restructuring should be in place by mid-2025, after securing bridge financing from lenders.
Analysts caution that addressing arrears is critical for Zimbabwe’s economic recovery, as the country is currently unable to access funds from the IMF due to its unsustainable debt.
Clearing arrears with major creditors, including the AfDB, World Bank, and European Investment Bank, is crucial to unlocking future financial support. Despite the SMP not including financial aid from the IMF, it would signal a commitment to sound economic policies.
Zimbabwe’s debt situation remains complicated, with much of the debt in arrears and penalties, limiting access to international financial assistance.
