‘Zimbabwe committed to debt clearance reforms’

Golden Sibanda

Zimbabwe has reaffirmed its commitment to implementing all reforms underpinning its arrears clearance and debt resolution process and promised to continue working with key stakeholders for a viable solution to its debt situation.

Arrears clearance and debt resolution are critical to unlock fresh funding which the country needs to finance priority development programmes.

Limited access to affordable long-term financing has also, oftenly, constrained efforts by authorities to defend and maintain stability of the domestic currency.

Zimbabwe’s sovereign debt stands at US$21 billion, with a significant part of the country’s external debt being overdue, blocking access to affordable long-term financing from multilateral lenders, including the World Bank and the African Development Bank (AfDB).

In 2022, President Mnangagwa appointed AfDB president Dr Akinumwi Adesina as the Champion of the debt resolution and arrears clearance process, while former Mozambique President Joachim Chissano was appointed a High-level Facilitator of the process.

Zimbabwe this week reiterated its commitment to consolidating ongoing key reforms conditional to the debt clearance programme, and expressed its unflinching willingness to continue working with all key stakeholders in seeking a sustainable solution to its debt situation.

The Ministry of Finance, Economic Development and Investment Promotion revealed this in a communiqué the Treasury issued following the successful High-level Structured Dialogue Forum held in Harare three weeks ago and attended by all relevant stakeholders.

President Mnangagwa presided over the forum and appreciated the support of Dr Adesina, who attended the forum in Harare, and Mozambique’s former leader, who participated in the forum virtually.

Also present at the High-level Structured Dialogue Forum were Ambassador Thomas Nuno, former Mozambique President Chissano’s advisor, who represented him physically at the meeting, Government representatives, Zimbabwean ambassadors based abroad, who joined virtually, creditors, development partners, representatives of international organisations, civil society organisations and the private sector, among others.

Treasury said the progress registered during the last two years of the Structured Dialogue Platform process was a key milestone and a foundation to move towards the core objective of the arrears clearance and debt resolution.

According to statement from the finance ministry, President Mnangagwa updated the High-level Structured Dialogue Forum on the progress made over the past two years in implementing reforms under the three strategic pillars of the three-sector Working Groups namely Economic Growth and Stability Reforms, Governance Reforms and Land Tenure Reforms.

President Mnangagwa told the forum that Zimbabwe was achieving significant milestones, despite the challenges posed by the external debt overhang, global climate shocks and the burden of illegal economic sanctions.

He expressed his Government’s commitment to consolidating constitutionalism, upholding the rule of law, promoting good governance and protecting constitutionally enshrined rights and freedoms, which are part of the reform agenda under the debt resolution and arrears clearance process.

The President also told the forum that his Government was negotiating a Staff Monitored Programme (SMP) with the International Monetary Fund to anchor further economic reforms under the arrears clearance and debt resolution process.

He explained that since Zimbabwe established the Structured Dialogue Platform in December 2022, the platform had registered tremendous progress, with growing consensus, trust and confidence in this key national initiative.

The President added that it was now time to move to the ultimate objective of the process, which is clearing arrears, debt resolution and unlocking new concessional external financing for the country.

Targeted reforms under the process were emphasised as key for Zimbabwe to unlock new concessional external financing, critical for achieving its economic development objectives.

Reflecting on the engagements over the last two years, stakeholders agreed that the Structured Dialogue Platform had succeeded in re-engaging Zimbabwe with its international development partners and creditors.

“They affirmed that this was the only viable path forward.

“They commended the inclusive nature of the process, which they noted had brought all key stakeholders together to discuss the reforms underpinning the process,” the ministry said.

The Government of Zimbabwe, the ministry said, would continue working together with the debt Champion, the High-level Facilitator, development partners and all key creditors and stakeholders, including the financial and legal advisors in the implementation of the debt resolution and arrears clearance roadmap.

“The Government of Zimbabwe takes full ownership of the arrears clearance and debt resolution process and is committed to the implementation of reforms underpinning the process, consistent with the (five-year development plan) National Development Strategy 1,” the ministry                said.

Treasury said in the communiqué that the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube also updated stakeholders on the roadmap for the arrears clearance and debt resolution process during the High-level Structured Dialogue conference in Harare.

Going forward, the process will entail signing a staff-monitored programme with the IMF by the first quarter of 2025, anchoring policies to bolster macroeconomic stability, continuation with the implementation of outstanding reforms under the pillars of the three Sector Working Groups (SWGs) and continuing with Structured Dialogue Platform meetings, both at the high and technical levels, as a platform for building trust, feedback and reporting of progress on the implementation of the reforms.