Zimbabwe wins new IMF monitoring deal in key step to clear arrears

By Agencies

Zimbabwe, after years of talks with the International Monetary Fund, has secured a 10-month staff-monitored program, a crucial step toward clearing billions of dollars in debt arrears.

“The SMP is intended to establish a credible track record that supports the authorities’ re-engagement efforts and complements their broader strategy toward arrears clearance and debt restructuring, including eventual access to external concessional financing,” the IMF’s Wojciech Maliszewski, who led its staff team’s mission to Zimbabwe, said in a statement on Friday.

“Continued progress on reforms, together with strengthened policy credibility and improved transparency, would help lay the groundwork for more substantive discussions with international partners on arrears-clearance and debt restructuring modalities in the near term.”

Commenting on the development Treasury permanent secretary George Guvamatanga told Reuters that Zimbabwe’s authorities were aiming for a 10-month staff monitored programme starting next month “if all processes can be completed in time.”

“The programme is to consolidate current fiscal and monetary policy reforms”

The southern African nation has been locked out of international capital markets since 1999 after defaulting on debt owed to lenders including the World Bank, the Paris Club and the African Development Bank, and is seeking to restructure about $21 billion of loans.

Zimbabwe last had a staff-monitored IMF program in 2019, which was abandoned after the nation failed to adhere to the lender’s recommendations on its now-defunct Zimbabwean dollar. It has since taken a series of steps to reengage with international creditors and in 2024 introduced a gold-backed currency — the ZiG.

In 2022, Zimbabwe enlisted then AfDB President Akinwunmi Adesina and former Mozambican leader Joaquim Chissano to negotiate with creditors. Toward the end of 2024, it hired Global Sovereign Advisory, a Paris-based consultancy, and law firm Kepler-Karst, which specializes in debt restructuring and insolvency, to advise it.

The IMF expects Zimbabwe’s economy to grow 5% this year, supported by continued strength in agriculture and mining. It also sees inflation remaining in single digits, reflecting tight monetary conditions and a more stable foreign-exchange market.

Zimbabwe’s annual inflation rate fell to single digits for the first time since 1997 last month.