Zimbabwe will host a pivotal debt conference on Monday, led by President Emmerson Mnangagwa, as the nation seeks to resolve its $12.7 billion external debt and chart a return to international capital markets after more than two decades. The meeting, which will be attended by African Development Bank (AfDB) President Akinwumi Adesina, international creditors, and private sector representatives, will focus on addressing arrears and outlining a sustainable debt restructuring plan.
Zimbabwe’s debt burden, which stands at 81% of its GDP, presents a significant challenge for a country plagued by years of hyperinflation, economic instability, and repeated currency regime failures. Independent economist Prosper Chitambara highlighted the gravity of the situation, describing arrears as “a major obstacle” to financial recovery. He emphasized that clearing these arrears is essential to reduce borrowing costs and attract much-needed investment.
However, Zimbabwe faces limited options for external support. The International Monetary Fund (IMF) has ruled out financial assistance due to the unsustainable debt situation and outstanding arrears. Instead, the government is targeting an IMF Staff-Monitored Program (SMP) as an initial step to demonstrate sound economic policies. Despite earlier missed deadlines, officials remain hopeful that an SMP will pave the way for stronger IMF engagement in the future.
The debt conference will also aim to address arrears with major creditors, including the AfDB, World Bank, and European Investment Bank. Resolving these obligations is seen as a critical step toward unlocking new funding and revitalizing Zimbabwe’s struggling economy. Once a regional agricultural powerhouse, the country now faces widespread food insecurity and economic stagnation.
Finance Minister Mthuli Ncube revealed that two advisory firms, funded by an AfDB facility, are assisting the government in crafting its debt strategy. While Zimbabwe has been making token payments to its creditors, the government hopes to present a clear roadmap for resolving its debt crisis by the end of the conference.
Africa’s debt challenges extend beyond Zimbabwe, with 24 of the continent’s 35 low-income nations at high risk of debt distress. While countries like Zambia and Chad have restructured their debts, Zimbabwe’s case is unique, as nearly half of its debt comprises arrears and penalties.
As the conference takes place, Zimbabwe faces the daunting task of convincing its creditors and global financial institutions of its commitment to reform. The road ahead remains uncertain, but officials are determined to break free from decades of economic turmoil and reestablish the country as a viable player in international finance.
