After nearly two years of dialogue with development partners, Zimbabwe says it is ready to accelerate the arrears clearance and debt resolution process by working with the International Monetary Fund for a staff monitored programme (SMP) to start in January 2025.
The IMF’s programme falls under the economic reforms Zimbabwe is undertaking as part of the process to clear its $21 billion public debt and arrears.
Addressing the 6th Structural Dialogue of the process hosted by the Zimbabwe government in the capital Harare, President Dr Emmerson Mnangagwa expressed support for the IMF programme and called for financial intervention to protect vulnerable groups of the population that will be negatively affected.
“In this regard, the protection of the vulnerable groups, through effective social protection programmes is of critical importance to my government,” President Mnangagwa told creditors, development partners, private sector players, civil society organisations and farmers’ organisations at Monday’s high-level dialogue.
The President and Chairman of the Boards of Directors of the African Development Bank Dr Akinwumi Adesina termed the IMF programme “a significant milestone towards concretising the arrears clearance and debt resolution.”
“I would like to urge here that our collective efforts will be critical to ensure that this is a wet-SMP (a supported staff monitored programme) that will provide fiscal space for the country to implement needed reforms and protect the vulnerable populations,” said Adesina, the Champion of the process.
Working groups formed under the dialogue process to oversee reforms across the three sectors of Economic Growth and Stability Reforms, Governance, Land Tenure and Compensation, presented their updates.
Praising what he described as “an inclusive and transparent consultative process”, President Mnangagwa outlined a series of fiscal, governance and legislative reforms that the government has embarked upon to improve macroeconomic stability, and government efficiency and accountability.
The reforms include the launch of a new local currency, a more flexible and transparent foreign exchange market, and the introduction of new parliamentary bills to strengthen the fight against corruption.
Others are the far-reaching land tenure reforms to promote investor confidence, and a $35 million compensation package for more than 400 farmers affected by a land redistribution programme in the 1990s. In addition, all land held by beneficiaries of 99-year leases and offer letters under the land reform programme will now be covered by bankable and transferable documents of tenure to be issued by government.
Reflecting on the two-year journey, Adesina said, “We have made more progress in two years than all the prior 21 years since the sanctions were imposed. The high-level structured dialogue is the only way, there is no other way.”
The Bank Group president called for a new lease of life for Zimbabwe and its people: “It is clearly time to bring this to a close, end the decades of untold damage to the economy of Zimbabwe, the suffering of its people, and have a new beginning with collective hope, aspiration and shared prosperity, for its people, today and well into the future,” Adesina declared.
He pointed out that 23 years of sanctions had “left Zimbabwe with a pile of debt which has risen to $21 billion — $13 billion for external debt and $8 billion of domestic debt. Even wars never last this long.”
“We all agree we must play our part to correct this anomaly and give a new lease of life to this nation and its people, so Zimbabwe can run again,” Adesina stressed. “Run, to build first rate schools. Run, to build infrastructure, from transport corridors, railways and power transmission lines that will integrate the SADC region and boost economic growth and jobs.”
Speaking by video message, the high-level facilitator of the resolution process, former President of Mozambique, Joaquim Chissano, urged the international community to do more to support the government of Zimbabwe with the financial and technical resources required to implement the ongoing reforms.
Chissano and President Mnangagwa praised Adesina for his role as the Champion of the process and also thanked the African Development Bank for providing $4.2 million to facilitate and support the structured dialogue. The Bank is also financing technical and legal advisors to help develop a comprehensive roadmap for the debt resolution process.
Adesina said the Bank’s Board of Directors will consider continued support for the process. In addition, the Bank will set aside funding in the next replenishment cycle for its concessional financing arm, the African Development Fund, for clearing Zimbabwe’s arrears, similar to what the Bank did for Sudan and Somalia.
Bolstering his argument for a sanctions-free Zimbabwe, Adesina highlighted its geostrategic importance to Southern Africa, as well as the abundant mineral and metal deposits that make it critical to the global energy transition. He emphasised, “Zimbabwe is too critical for the world to ignore.”
