Zimbabwe eyes debt relief at IMF spring meetings

Zimbabwe will seek to engage its creditors during the upcoming International Monetary Fund (IMF) spring meetings in order to pave the way for the proposed debt restructuring.

Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, said the country is making progress towards fulfilling its “commitment to debt clearance.”

“This endeavor, which is no small feat, requires resilience, foresight, and unwavering dedication. These are the qualities that the government possesses and will continue to embody as we forge ahead,” said Prof. Ncube in a statement accompanying a video on progress regarding the country’s arrears clearance and debt resolution process.

Minister Ncube said talks have resumed with the three working groups.

In a video recording posted on his social media handle on Monday, Minister Ncube said fruitful meetings have been conducted between the three technical committees: economic reforms, governance and farmer compensation, and land tenure systems.

A meeting of the principals, led by President Emmerson Mnangagwa, Dr. Akinwumi Adesina (president of the African Development Bank (AfDB)), and former Mozambican President Joaquim Chissano, will take place soon, according to Minister Ncube.

Further meetings are going to be held on the sidelines of the IMF-World Bank spring meetings.

“We are going to have further meetings in Washington DC during the IMF-World Bank spring meetings, to discuss further on how to resolve Zimbabwe’s arrears,” said Minister Ncube.

“It’s an ongoing process, not a sprint, but rather a marathon. However, we are pleased with the progress so far. Partners are also participating fully in the program,” he said.

Previously, on January 19, 2024, the three technical committees met to plan a way forward and accelerate the process of addressing gaps.

In US dollar terms, total public and publicly guaranteed debt amounted to US$17.7 billion as of December 2023, with external debt at US$12.7 billion and domestic debt at US$5 billion.

It has been previously stressed that clearing Zimbabwe’s external debt is crucial for paving the way for sustainable economic growth.

“The issue of Zimbabwe’s external debt remains an albatross around the economy, which should be cleared to enable sustainable economic growth,” said Minister Ncube.

He added that for the country to attain upper-middle-income status, it needs to grow by over 5 percent, and arrears clearance is an enabler.

“The economy can grow sustainably, and we can maintain that growth rate of over 5 percent for the next few years so we can reach upper-middle-income status,” said the Minister.

In the 2024 national budget, Treasury set aside US$55 million to compensate white former farm owners whose land was taken under the fast-tracked land reform program.

The US$3.5 billion compensation is for the value of improvements, biological assets, and land clearing costs for the land that was compulsorily acquired for resettlement.-ebusinessweekly