HARARE – The African Development Bank (AfDB) has announced significant progress in Zimbabwe’s arrears clearance and debt resolution efforts, with a roadmap that will commence with an International Monetary Fund (IMF) staff-monitored programme (SMP) in 2025.
The SMP, according to State media The Herald, will underpin Zimbabwe’s implementation of further economic reforms as part of its debt resolution strategy. Negotiations between the Zimbabwean government and the IMF are currently underway to establish this framework.
What is an SMP?
An SMP is an informal agreement where IMF staff monitor a country’s economic programme, helping establish a track record of policy implementation. Success in this programme can open doors to formal financial arrangements with the IMF and potentially reinstate suspended funding.
Zimbabwe has cleared its arrears with the IMF but remains unable to access fresh credit lines due to the pari passu rule, which requires equal treatment of all creditors. The IMF, alongside other multilateral creditors and development partners, is integral to discussions on resolving Zimbabwe’s $21 billion public debt.
Key Developments from the AfDB
AfDB President Dr Akinwumi Adesina, the champion of Zimbabwe’s arrears clearance initiative, provided updates during the 6th High-Level Structured Dialogue Platform in Harare.
“Next year marks a pivotal moment. Zimbabwe will begin implementing an IMF-monitored programme, which will bring about critical reforms negotiated with development partners,” Dr Adesina stated.
He highlighted AfDB’s African Development Fund as a potential source to clear Zimbabwe’s arrears and announced plans to request additional resources for the country during the AfDB’s spring meetings in 2025.
Zimbabwe’s Reform Agenda
The reform process is being guided by Sector Working Groups (SWGs) involving creditors and Zimbabwean representatives. These groups are focused on three strategic pillars:
- Economic growth and stability.
- Governance and land tenure reforms.
- Compensation for former farm owners and resolution of Bilateral Investment Protection and Promotion Agreements (BIPPAs).
Finance Minister Mthuli Ncube expressed optimism about the timeline, targeting the SMP’s completion within the National Development Strategy 1 (NDS 1) period, which ends in 2025.
“Next year, key milestones will include launching the SMP in January, reviewing progress in July, and making necessary adjustments by September,” he said.
Minister Ncube emphasised the importance of achieving debt relief before embarking on NDS 2 (2026–2030), positioning Zimbabwe for long-term, concessionary funding to foster inclusive growth.
Current Debt Profile
Zimbabwe’s public debt stands at an estimated $21 billion as of June 2024, comprising:
- External Debt: $12.3 billion (including $681 million to AfDB, $1.5 billion to the World Bank, and $427 million to the European Investment Bank).
- Domestic Debt: $8.7 billion.
Global Support
Dr Adesina commended the diplomatic community’s backing for Zimbabwe’s debt resolution roadmap, reiterating that resolving the country’s debt crisis requires collective effort.
The AfDB has also supported Zimbabwe with over $55 million in private-sector funding and continues to champion its journey towards economic transformation and debt sustainability.
As discussions advance, the upcoming IMF SMP and subsequent reforms could mark a turning point in Zimbabwe’s pursuit of financial stability and economic resurgence.
This underscores Zimbabwe’s strategic focus on economic reforms and international cooperation as it seeks to re-engage with the global financial system.