Govt Moves Toward US$21 Billion Debt Relief With IMF Talks and Trade Reset
Zimbabwe has rolled out a comprehensive and reform-driven strategy to tackle its US$21 billion debt burden, with Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube outlining a roadmap that blends bridge financing, natural resource-backed deals and international engagement.
The plan also includes direct negotiations with the United States to ease trade tariffs and expand market access.
In remarks made in Harare, Prof Ncube said the government is prioritising arrears clearance with multilateral lenders such as the World Bank and the African Development Bank (AfDB).
This process hinges on Zimbabwe entering a Staff Monitored Programme (SMP) with the International Monetary Fund (IMF), which would pave the way for bridge financing and eventual debt resolution.
“This path allows us to clear the World Bank and AfDB arrears first, which then requires a Staff Monitored Programme. When successfully completed, you would identify a sponsor who would give us the bridge financing, and then we would clear the arrears”, Prof Ncube told The Herald.
He explained that the actual clearance process is swift—“only takes three hours” but the technical groundwork and negotiations could span years.
The government is also exploring alternative models, including leveraging Zimbabwe’s mineral wealth to structure debt servicing deals. “We also consider those possibilities,” he said.
Zimbabwe’s debt-to-GDP ratio has improved, dropping from 46 percent in 2024 to a projected 45 percent by year-end.
Prof Ncube said this shift repositions the country away from the “red zone” of unsustainable debt. “It is a narrow liquidity issue, as opposed to our previous condition that it was also a debt sustainability issue,” he said.
On the SMP, Prof Ncube confirmed that discussions with the IMF are progressing, with reform fine-tuning expected over the next six months.
“We haven’t agreed as yet, but we have made considerable progress. It then allows us to move to phase two, which is to deal with the Paris Club debt and also be able to negotiate any removal of penalties or excess interest,” he said.
In parallel, Zimbabwe is negotiating with the United States to ease an 18 percent tariff on its exports.
As a goodwill gesture, President Emmerson Mnangagwa suspended all tariffs on US imports during the negotiation period.
“Our proposal for no tariffs is no tariffs during the negotiation period. We hope that we will be successful in the negotiations, something that is more palatable for both countries,” said Prof Ncube.
He added that the talks present an opportunity to expand Zimbabwe’s export footprint in the US market.
“Let us explore markets in the US for these products as well, and also vice versa. The government is optimistic that the negotiations will lead to a reciprocal tariff regime and stronger bilateral trade ties,” he said.
As Zimbabwe navigates its complex debt and trade challenges, the Second Republic remains committed to a strategic, reform-led approach aimed at restoring financial stability, attracting investment, and repositioning the country on the global economic stage.
