Govt pays US$170m to international creditors
LIVINGSTONE MARUFU
The Government paid US$170m to international creditors during the first half of 2026, Business Times can report.
The payments, which covered active loans, legacy debt and token repayments, come as Zimbabwe intensifies efforts to normalise relations with international financial institutions and unlock fresh funding needed to stimulate economic growth.
Zimbabwe’s total public and publicly guaranteed debt stood at US$21.7bn at the end of June 2026, equivalent to 37.4% of GDP.
External debt accounted for US$11.6bn, while domestic obligations totalled US$10.1bn. Although the debt-to-GDP ratio remains relatively moderate by international standards, the country’s debt servicing burden is compounded by large arrears, interest costs, currency exposure and constrained fiscal resources.
Zimbabwe owes the World Bank US$1.612bn, of which US$1.546bn is in arrears. Outstanding obligations to the African Development Bank (AfDB) amount to US$759m, including US$740m in overdue payments, while the European Investment Bank (EIB) is owed US$441m, comprising US$435m in arrears and penalties.
Collectively, the three institutions require Zimbabwe to clear approximately US$2.7bn in arrears before normal lending relationships can resume.
The scale of the arrears is significant, accounting for 95.9% of Zimbabwe’s obligations to the World Bank, 97.5% of its AfDB debt and 98.7% of its exposure to the EIB. As a result, the country remains excluded from concessional financing windows that support infrastructure development, social services and institutional reforms.
Presenting the Mid-Term Budget Review, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said Government had continued servicing both external and domestic debt using locally generated resources.
“Government external debt service payments amounted to US$170m during the period January to June 2026 towards servicing of the active loan portfolio, legacy debt and token payments,” Ncube said.
“In addition, domestic debt service payments totalled ZWG15.3bn.”
He said the 2026 National Budget, approved by Parliament, was anchored on projected revenues of ZWG288bn (16.9% of GDP) against expenditures of ZWG290.9bn (17.1% of GDP), resulting in a projected fiscal deficit of ZWG3.2bn.
During the first six months of the year, Government collected ZWG137.8bn in revenue while spending ZWG123.6bn, generating a surplus that was channelled towards servicing public debt and settling arrears owed to service providers.
“This resulted in savings which went towards servicing of public debt and arrears to service providers,” Ncube said.
However, Zimbabwe’s debt resolution strategy now faces the delicate challenge of simultaneously clearing external arrears while containing the rapid accumulation of domestic obligations.
