Speed up the resolution of the debt crisis.
Government should expedite resolution of the country’s debt crisis in a bid to unlock international finance for economic development.
President Emmerson Mnangagwa, has since appointed a high-level debt settlement team headed by African Development Bank president Dr Akinwumi Adesina, who serves as the process’ facilitator and former President of Mozambique, Joaquim Chissano, who is also a facilitator of the debt resolution process.
The dialogue aims to find solutions to Zimbabwe’s debt overhangs.
We implore the government and the debt champions to accelerate the process as this will result in the restructuring of Zimbabwe’s debt, which according the official data obtained from the Ministry of Finance, Economic Development and Investment Promotion this week, is estimated to be approximately US$18bn with an external debt load of more than US$12.7bn, including liabilities on the Reserve Bank of Zimbabwe balance sheet assumed by the Treasury. Of the total external debt stock, the bilateral and multilateral debt amounted to US$9.1bn and the balance is owed to the Paris Club and others.
Of that amount, about 76% are principal arrears, interest arrears and penalties.
Domestic debt amounts to about US$5bn.
According to the Public Debt Management Office, Zimbabwe’s total public and publicly guaranteed external and domestic debt stood at US$10.7bn in 2022, comprising US$8.4bn (external) and US$204m (domestic). Now , the debt has ballooned to US$18bn.
Zimbabwe’s debt issue has been primarily caused by factors that include the depreciation of the local currency and penalties on past-due foreign debt. Put it all together, it looks like a very toxic mix as the country can no longer safely carry the debt.
On his X handle (formerly twitter) yesterday President Emmerson Mnangagwa who was set to depart for meetings of the African Development Bank in Nairobi , Kenya said his administration was committed to advancing its arrears clearance and debt settlement plan to pave way for the country’s economic stabilisation.
“Today, I travel to Nairobi for the African Development Bank annual meetings. Zimbabwe is committed to advancing our Arrears Clearance and Debt Settlement Plan, paving the way for economic stability and growth,” President Mnangagwa said.
Additionally, it coincides with plans by President Mnangagwa’s administration to borrow almost US$3.5 billion in order to reimburse former commercial white farmers for property that was taken during the fast-track land reform initiative.
