Debt resolution now top Govt priority: Treasury

STAFF WRITER

Resolving Zimbabwe’s crippling debt overhang has been elevated to a top priority by the Government, with Treasury saying the arrears clearance and debt resolution process is essential for unlocking affordable, long-term external financing needed to fund the country’s next development phase under the National Development Strategy 2 (NDS2), the administration’s economic blue-print  that runs for five years from 2026.

Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said Zimbabwe remains committed to the arrears clearance and debt resolution roadmap, which has recorded “tremendous progress” since its launch in late 2022.

This progress, he noted, has been anchored on three strategic pillars — economic growth and stability reforms, governance reforms, and land tenure reforms, including the bankability of 99-year leases, compensation of former farm owners, and the resolution of Bilateral Investment Protection and Promotion Agreements (BIPPAs).

“Growing consensus, trust and confidence have been established in this key national initiative. We have also seen an inclusive and transparent consultative process, as we institutionalised dialogue on economic and governance reforms, underpinning Zimbabwe’s arrears clearance and debt resolution process,” Prof Ncube said.

“As Zimbabwe transitions to the implementation of the National Development Strategy 2 in 2026, access to external concessional financing will be key for long-term funding of critical projects and programmes for the benefit of our citizens. Government, therefore, is prioritising the achievement of the set goal of this Structured Dialogue, which is to unlock new concessional external financing, critical for achieving our economic development objectives and our Vision 2030 goal.”

Ministry of Finance Permanent Secretary George Guvamatanga underscored that addressing the debt challenge is one of the Government’s highest priorities.

“The three strategic pillars underpinning the Structured Dialogue Process, which are supported by the Sector Working Groups, have registered tremendous progress in the implementation of reforms since December 2022, demonstrating strong reform commitment.

“Notwithstanding challenges encountered at times, the Government remains strongly committed to the reform agenda, with a key focus on unlocking concessional long-term financing for the attainment of our development aspirations.

“Our arrears clearance and debt resolution process roadmap is clear. We will continue to collaborate with all stakeholders to ensure the resolution of the outstanding debt issue that has hindered our nation’s ability to thrive and realise its full potential,” he said.

Guvamatanga added that success would benefit not just Government but also the private sector, which he described as “undeniably a crucial driver of economic development.”

“The private sector plays a significant role in job creation, wealth generation and innovation. Our private sector should be able to access long-term capital without the hindrances it currently faces. Our people should have access to a wealth of meaningful job opportunities. Hence, resolving our debt challenge is essential, and we are moving in the right direction to make this a reality,” he said.

As of December 31, 2024, Zimbabwe’s total public and publicly guaranteed debt stock stood at US$21.5bn, representing 47.1% of GDP, up from US$21.2bn a year earlier.

The debt stock comprises of external debt amounting to US$13.2bn and domestic debt US$8.3bn.