ZIMBABWE’S Finance ministry has resumed negotiations with creditors and the international community as Treasury seeks the resolve the country’s nagging debt overhang. With the country remaining in debt distress while borrowing is limited, public debt has continued to increase, driven by external arrears and legacy debt.
BERNARD MPOFU
Official figures show that despite making token payments over the past few years, Zimbabwe’s total debt stock has soared to US$18 billion as of December 2023.
“Treasury officials today (Tuesday) met with reps (representatives) from MDAs (ministries, departments and agencies), the Diplomatic Community, Development Partners, & Indus[1]try players to continue the technical meetings on the country’s Structured Dialogue Platform on Arrears Clearance and Debt Resolution towards a new Staff Monitored Programme,” Treasury said on its official X handle.
“Committee Chairpersons presented on three thematic areas: Economic; Governance; and Land Tenure Reforms where tremendous progress has been recorded as the country works diligently to find a sustainable solution in the debt and arrears clearance process.”
Zimbabwe will undergo a new International Monetary Fund (IMF) Staff-Monitored Programme (SMP) later this year for the umpteenth time against the backdrop of previous concerns raised by the multilateral lender over policy slippages.
A Staff-Monitored Programme is an informal agreement under which IMF staff keep tabs on a member country’s economic programme.
After several failed attempts to settle arrears with international financial institutions (IFIs) such as the World Bank and the African Development Bank (AfDB), which enjoy preferred creditor status, Zimbabwe, which has been struggling to access long-term concessional funding, adopted a new strategy which is led by AfDB.
The debt-ridden nation established a structured dialogue platform with all creditors and development partners in order to institutionalise negotiations on economic and governance reforms to underpin the arrears clearance and debt resolution process.
As the debt-ridden country undertakes to embrace economic and political reforms to normalise relations with its creditors, undergoing an SMP is one of the critical steps for Harare in its quest to normalise relations with international financiers.
Political interference and policy reversals have often been cited as some of the reasons unnerving potential investors from injecting capital into the debt-ridden southern African nation.
Before the 23 August 2023 general elections, the holding of credible polls was highlighted as a key precondition for normalising relations with the international community.
Harare had promised to undertake a raft of political governance and economic reforms in order to normalise relations with the global community.
