Analysts sees hope to Zimbabwean economy in debt resolution

Dr Prosper Chitambara
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RESOLVING the country’s debt and clearing outstanding arrears could help spur both economic growth and the ongoing infrastructure development drive, analysts have said. Preparations for resumption of the structured dialogue platform on the country’s debt and arrears are presently underway.

On January 19 this year, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube, together with his deputy Mr David Mnangagwa, joined diplomats, Reserve Bank of Zimbabwe officials, heads of ministries, departments and agencies, as well as the private sector in Harare for a strategic planning meeting for the structured dialogue platform.

Through its handle on X, Treasury indicated that the process will focus on economic, governance and land tenure reforms.

Former Mozambican President Joaquim Chissano and head of the African Development Bank (AfDB) Dr Akinwumi Adesina were appointed the high-level facilitator and champion of the process, respectively.

Economist Dr Prosper Chitambara said clearing the country’s debt would be “a strategic move”.

“Zimbabwe’s debt situation is a significant impediment to its economic progress. Clearing this debt is not just a financial imperative but a strategic move to create a conducive environment for sustained infrastructure development,” he said.

“Zimbabwe needs a well-structured debt management plan that not only addresses the immediate concerns but also lays the foundation for responsible fiscal policies in the future. This will instil confidence among investors and development partners.”

Ms Gladys Shumbambiri-Mutsopotsi, another economist, said investors were likely to take a cue from a successful debt resolution programme.

“Investors closely monitor a country’s fiscal responsibility before committing to long-term infrastructure projects,” she said.

“Resolving the debt issue sends a positive signal, potentially unlocking avenues for much-needed funding in critical sectors …

“Zimbabwe has immense potential for economic growth, and resolving the debt issue can unlock that potential. Investors are watching closely, and a successful resolution could lead to a renewed interest in Zimbabwe as a viable investment destination.”

According to Treasury, the country’s total external debt was estimated at US$14,04 billion as at September 2023, including US$5,7 billion of bilateral debt, which is 41 percent of the total amount, and US$2,6 billion of multilateral debt, which constitutes 18,4 percent of the overall debt.