Finance Minister Mthuli Ncube has admitted that Zimbabwe’s mounting debt crisis is severely undermining efforts to stabilise the economy.
Speaking in Harare this week, Ncube said that the country’s ballooning debt, stagnant revenues, and shrinking fiscal space were the major issues.
Zimbabwe’s public debt has surged to over US$21 billion, nearly 90% of the country’s GDP. Major creditors include the World Bank, the African Development Bank, the Paris Club, and the non-Paris Club. Said Ncube (via <a href="https://businesstimes.co.zw/debt-crisis-chokes-mthuli/">Business Times</a>):
<blockquote>
If there is anything that keeps me awake at night as the Finance Minister it’s this debt crisis. The issue of debt is critical and albatross that we need to remove from our necks so that the economy can move forward. This issue occupies me for the most of my time [and it’s taking a toll on me].
What is more worrisome to me is that Zimbabwe’s average growth of around 6% is way lower than the interest rates growth.
This means that our debt will continue to be increasing. That’s why we have to restructure our debt to ensure that the debt does not accumulate.
</blockquote>
The country’s growing debt burden limits the government’s ability to fund public services and stifles economic growth prospects.
To tackle the crisis, Ncube revealed plans to divest from underperforming State-Owned Enterprises (SOEs) to raise funds for debt repayment.
The Zimbabwean government has also engaged with international financiers through a high-level dialogue platform led by African Development Bank (AfDB) President Dr Akinwumi Adesina and former Mozambican President Joaquim Chissano.
However, these initiatives have faced challenges due to delays in implementing essential governance reforms, which are crucial for the arrears clearance and debt resolution agenda.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

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Zimbabwe owes a lot of money to different lenders, which is making it hard for the economy to get better. The Finance Minister is worried about the growing debt because it's almost as much as the country's GDP. This debt is stopping the government from giving people important services and making the economy grow. The Minister wants to sell some government businesses to get money to pay back the debt. They are also talking to other countries and organizations to help solve the debt problem. But, they are facing some challenges in fixing the debt because they need to make some important changes first.

Zimbabwe's Mounting Debt Crisis Is A Barrier To Economic Recovery, Says Mthuli Ncube

The president of the African Development Bank (AfDB), Akinwumi Adesina, praised Zimbabwe for making significant progress in addressing its US$21 billion public debt, despite challenges such as sanctions and an El Nino-induced drought.
Zimbabwe’s external debt stands at US$12.3 billion, owed to creditors like the AfDB, World Bank, and European Investment Bank. The country also has a domestic debt of US$8.7 billion.
During his speech at the High-level Structured Dialogue Platform Meeting on Arrears Clearance and Debt Resolution in Harare on Monday, Adesina, who is leading Zimbabwe’s debt clearance efforts, said:
<blockquote>
The high-level structured dialogue is the only way, there is no other way. So, we should make it work to deliver the expected end: arrears clearance and debt resolution for Zimbabwe.
That is why the African Development Bank provided US$4,2 million towards facilitating the High-Level structured dialogue.
And we expect to provide additional support because we strongly believe these dialogues are yielding fruits.
</blockquote>
According to the AfDB president, Zimbabwe is too important for the world to overlook. He said:
<blockquote>
With its vast deposits of critical minerals, including lithium and platinum metals group, Zimbabwe is one of the leading countries that holds the future for global energy transitions.
In a world of geo-political competition and drive for securing vital strategic minerals and metals, we must look at Zimbabwe with new lenses.
</blockquote>
Adesina also said Zimbabwe is on track to implement an International Monetary Fund (IMF) Staff Monitoring Programme (SMP), which is crucial for the arrears clearance process.
He said that this is set to take place in January when IMF officials will visit the country.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe has a big debt of $21 billion. They have $12.3 billion to foreign creditors and $8.7 billion to local creditors. The president of AfDB, Akinwumi Adesina, said Zimbabwe is doing well to clear the debt. They need structured dialogues to fix the debt problem. AfDB gave $4.2 million for this. Zimbabwe has important minerals and metals that the world needs. The IMF will visit Zimbabwe in January to help with the debt. Adesina says Zimbabwe is important and needs help to fix its debt.

"Structured Dialogue The Only Path To Zimbabwe’s Arrears Clearance And Debt Resolution"

Zimbabwe’s consolidated debt now stands at a staggering US$18 billion, with a substantial portion owed to international creditors which include institutions like the World Bank, International Monetary Fund (IMF), and bilateral partners, including China.
Domestic public debt has also risen due to non-payment of government-guaranteed debt by private beneficiaries.
The country’s debt burden poses significant threats to national development and access to global financial markets.
Addressing lawmakers in parliament on Wednesday, Minister of Finance, Economic Development and lnvestment Promotion Deputy Minister, David Mnangagwa said the country’s debt was still undergoing validation and reconciliation. Said Mnangagwa (via <a href="https://www.zimlive.com/zimbabwes-debt-burden-balloons-to-us18-billion/">ZimLive</a>):
<blockquote>
Our debt figures are still going through some validation and reconciliation.
There has been US$1.9 billion recapitalisation of the Mutapa Fund and an additional US$1.2 billion that was assumed from the Reserve Bank of Zimbabwe (RBZ).
These would still need to be reconciled and validated before they are entered into the debt profile. That process is still underway.
</blockquote>
Mnangagwa also said the debt reported to the African Development Bank in April stood at US$2.7 billion, higher than the approved budget for this year.
The government’s efforts to address the debt crisis are being hindered by the lack of clarity on how the funds were used.
Zimbabwe’s appeal for debt forgiveness and penalty waivers has so far been unsuccessful.
The United States stopped participating in a critical debt restructuring programme in January citing human rights abuses, lack of electoral reforms and crackdown on opposition politicians.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

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