Zimbabwe will present its arrears and debt resolution plan to executive directors of the African Development Bank Group (AfDB) on the sidelines of the institution’s annual meetings next week as Harare ups the tempo in resolving the debt overhang.
Wednesday’s meeting in Egypt’s resort city, Sharm El-Sheikh, comes as Zimbabwe owes US$5.7bn and US$2.6bn to bilateral and multilateral creditors respectively. Of the debt, the bulk is made up of arrears (69%) on debt to bilateral creditors and 91% to multilateral creditors.
Next week’s presentation to the 20 executive directors of the AfDB is part of the process to sensitise international stakeholders and mobilise support for Zimbabwe Arrears Clearance and Debt Resolution process, according to a roadmap presented on Monday by Finance minister Mthuli Ncube.
The meeting in Egypt comes after the debt resolution champion Akinwumi Adesina and high-level facilitator and former Mozambican President Joaquim Chissano recently went to the United States on a charm offensive.
The duo met leaders in the US Congress, Treasury Department, State Department, and other US agencies.
Adesina said the parties had warmed up to the high level dialogue and hoped that it would translate into “concrete and measurable progress on the ground to inform a consideration of the lifting of the sanctions under ZIDERA”.
“We need to ensure that there is concrete and measurable progress on the Zimbabwe Democracy and Economic Recovery Act (ZIDERA), which is critical for re-engagement with the United States. We must do all to fully fulfill all the conditions under ZIDERA so that verifiable progress made can be used to support advocacy for the lifting of the sanctions imposed by the US Congress under ZIDERA,” Adesina said.
The arrears clearance and debt resolution strategy has compelled Zimbabwe to undertake economic and governance reforms as well as paying the US$3.5bn compensation to former farm owners and compensation of those whose farms were protected under the Bilateral Investment Promotion and Protection Agreement (BIPPAs).
Three sector working groups have been formed and there are benchmarks, which would be used to track progress.
The government has begun engagements with countries whose nationals were affected despite being protected under BIPPAs.
So far engagements have been made with Germany, The Netherlands, South Africa and Switzerland on the resolution of BIPPAs.
According to the roadmap, Zimbabwe will negotiate a supervised economic reform plan, the Staff Monitored Programme (SMP) next month and July.
This comes after a draft policy matrix for the SMP in place. Zimbabwe has identified key priority areas that require funding during the SMP implementation period: education, social protection, health, agriculture and climate change.
The three sector working groups will also meet during this period.
Zimbabwe also expects comments and feedback from capitals during this period.
In the period October 2023 to December 2024, Zimbabwe expects the approval of the SMP, implementation of reforms under the supervised economic reform plan. It also eyes resource mobilisation for the wet SMP and IMF’s Staff assessment of the SMP.
In the period January to December 2025, Zimbabwe is eyeing the mobilisation of bridging finance for arrears clearance from country champion and the implementation of agreed reforms, the roadmap said.
Zimbabwe’s total consolidated debt stands at US$17.5bn. It is in arrears for failing to service debts to the AfDB, the World Bank and the European Investment Bank.