THE International Monetary Fund says the staff-level agreement on Harare’s economic policy framework and reforms will strengthen milestones the country has achieved.
The IMF said on Friday that the agreement on a Staff Monitored Programme (SMP) was central to building a credible reform track record and advancing dialogue on arrears clearance and debt restructuring under the Structured Dialogue Platform.
At present, Zimbabwe is unable to borrow from the IMF and other multilateral institutions due to long-standing external debt arrears. The country has been in default on its debt since the early 2000s, which disqualifies it from accessing new financing.
Its external debt stands at about US$13,6 billion, with an estimated US$7,4 billion of this being outstanding arrears.
The debts are owed to various international financial institutions (including the World Bank, African Development Bank and European Investment Bank) and bilateral creditors.
To get fresh credit from any of the institutions, Zimbabwe should first address its outstanding debt position. Since December 2022, Zimbabwe is actively engaged in an arrears clearance and debt resolution strategy. The process is championed by former African Development Bank (AfDB) President Dr Akinwumi Adesina and facilitated by former Mozambican President Joaquim Chissano.
As of September 2025, Zimbabwe’s total Public and Publicly Guaranteed (PPG) debt was approximately US$23,4 billion, according to a report from the Ministry of Finance, Economic Development and Investment Promotion.
The country is currently up to date on its financial obligations directly to the IMF. But multilateral lenders typically do not provide new credit if a country is in arrears (owes debt) to another multilateral institution or, in some cases, official bilateral creditors.
An SMP is a crucial, informal agreement where IMF staff monitor a country’s economic reforms to build credibility, stabilise the macroeconomy and pave the way for future financial assistance. It serves as a diagnostic tool for countries to establish a track record of implementing sound economic policies.
The SMP aims to entrench stability through measures like reducing fiscal deficits, eliminating central bank financing of deficits and controlling inflation. The programme acts as a stepping stone for debt restructuring, arrears clearance and unlocking concessional international financial support. It supports crucial reforms such as improving governance, strengthening anti-corruption efforts and enhancing public financial management.
Importantly, a successful SMP often precedes formal IMF-supported programmes (Upper Credit Tranche) or helps in securing financing from other international partners.
By implementing these reforms, countries often aim to foster sustainable, private sector-led growth while strengthening social protection measures.
In a press statement issued following discussions held in Harare from January 28 to February 6, 2026, the IMF said the proposed SMP is designed to help entrench macroeconomic stability, strengthen policy credibility, and advance the authorities’ broader re-engagement efforts towards arrears clearance and debt restructuring.
The IMF mission, led by Mr Wojciech Maliszewski, confirmed that the staff-level agreement, which remains subject to IMF management approval, reflects broad convergence on the key economic policies and reforms that would underpin a 10-month programme aligned to Zimbabwe’s National Development Strategy 2 (NDS2).
“We are pleased to announce that the Zimbabwean authorities and the IMF team have reached a staff-level agreement on the key economic policies and reforms that could underpin a Staff Monitored Programme,” said Mr Maliszewski.
“The proposed SMP seeks to consolidate recent stabilisation gains, further strengthen fiscal and monetary policy frameworks, improve foreign exchange market functioning and advance governance reforms to support stronger and more inclusive growth.”
The IMF assessment places strong emphasis on recent macroeconomic improvements, noting that Zimbabwe’s recovery continued through 2025, supported by tight monetary policy, improving fiscal discipline and favourable external conditions.
“Zimbabwe’s economic recovery continues,” said the fund, citing growth that strengthened last year and exceeded the initial projection of 6,6 percent.
According to the IMF, agriculture and mining were the main drivers of growth, boosted by high gold prices and recovering platinum and lithium output. Inflation dynamics also improved markedly.
“Inflation fell to 4,1 percent in January 2026, aided by exchange rate stability and tight monetary conditions,” the IMF said, adding that fiscal revenues strengthened during 2025, supported by improved tax administration and new measures.
These developments, the fund said, helped narrow the fiscal deficit and produced a small primary surplus, reinforcing confidence in the authorities’ stabilisation efforts.
Zimbabwe’s Treasury says the IMF’s assessment validates the reform path now underway and confirms that the country is entering the SMP from a position of greater macroeconomic stability and policy alignment.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the current SMP was fundamentally different from previous engagements, largely because it is anchored in domestically crafted policies.
“Everything is aligned. A lot of work has been done for this SMP programme,” said Minister Ncube. “The foundation is a lot stronger this time around. It is different.”
He said the stability achieved in recent months provides a solid platform for reform implementation.
“We are now in a single-digit inflation territory, with no drought or cyclones, and better agricultural prospects in 2026, coming from a strong 2025 where we expect growth of 6,6 percent,” said Minister Ncube.
The minister stressed that all measures under the SMP are already embedded in the Government’s policy architecture.
“There is nothing in the policy matrix that is not in our budget or not in the NDS2. These are our own policies in the first place,” he said, adding that the IMF’s role is largely technical and confirmatory.
Permanent secretary in the Ministry of Finance, Economic Development and Investment Promotion, Mr George Guvamatanga, said timing has been decisive in setting the current programme apart.
“In the past, we tried to implement this amidst droughts, cyclones and immediately post-Covid. In hindsight, that timing was very wrong,” he said.
“This time around, we are off to a very strong agricultural season. Over and above the stable environment, the timing is very right.”
Looking ahead, the IMF projects that growth will remain firm in 2026, underpinned by continued strength in key productive sectors.
“Growth in 2026 is projected at around 5 percent, supported by continued strength in agriculture and mining,” said the fund.
Inflation is expected to remain contained.
“Inflation is expected to remain in single digits, reflecting tight monetary conditions and a more stable foreign exchange market,” the IMF noted.
External balances are also projected to remain supportive, with the current account forecast to remain in surplus at about 3,8 percent of GDP, while the primary fiscal balance is expected to register a surplus of around half a percent of GDP.
Building on this outlook, the IMF stressed that sustained policy discipline will be critical to entrenching stability.
“Continued efforts will help entrench stability, deepen confidence in the ZiG, enhance the functioning of the foreign exchange market, sustain the rebuilding of reserve buffers and reinforce the policy and institutional foundations for durable and broad-based growth,” the IMF said.
Fiscal management features prominently in the programme design. The IMF said the SMP supports the authorities’ commitment to prudent budget execution and sound expenditure control, consistent with the 2026 national budget.
“Spending in the first half of the year will be anchored on a conservative revenue outlook, helping ensure that expenditure remains aligned with available resources and avoiding the accumulation of new domestic arrears,” said the IMF.
Crucially, the IMF framed the SMP as a confidence-building instrument rather than a financing programme.
“The SMP is intended to establish a credible track record that supports the authorities’ re-engagement efforts and complements their broader strategy toward arrears clearance and debt restructuring,” the IMF said.
“Continued progress on reforms, together with strengthened policy credibility and improved transparency, would help lay the groundwork for more substantive discussions with international partners on arrears-clearance and debt restructuring modalities in the near term.”-herald
