Source: Zim, IMF resume SMP dialogue – herald
Tapiwanashe Mangwiro
Senior Business Reporter
Zimbabwe’s efforts to re-engage the global financial community have entered a decisive phase, with the Treasury saying discussions with the International Monetary Fund on a Staff-Monitored Programme have resumed.
The southern African nation has, over the last few years, reengaged with a wide range of multilateral financial institutions, bilateral creditor nations and development partners through a Structured Dialogue Platform (SDP) to resolve its external debt.
As of late 2025, Zimbabwe’s total public and publicly guaranteed (PPG) debt was approximately US$23,4 billion, with approximately 51,8 percent of this being external liabilities.
The SMP could lead to further discussions and agreements that could unlock bridging finance for debt clearance to restore access to affordable long-term global capital.
Zimbabwe is currently unable to access multilateral funding primarily due to long-standing external debt arrears to institutions like the African Development Bank, International Monetary Fund and World Bank.
Lack of access to cheaper multilateral credit has led to economic challenges for Zimbabwe, including slow development, limited foreign currency, high borrowing costs, reduced private sector investment, and a shallow financial sector, forcing reliance on costly alternatives and weighing economic activity.
In an interview, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said an IMF mission was expected in Zimbabwe in the first week of February, marking a critical step towards formalising the SMP process.
The programme, he said, was central to Zimbabwe’s efforts to resolve legacy debts and arrears and reposition the economy for sustained growth.
“The staff monitored programme is part of the process of clearing our international debt arrears,” Minister Ncube said. “It is a necessary step so that we can build a macroeconomic track record which is then reported officially in terms of performance.”
The Treasury boss noted that Zimbabwe’s current debt profile no longer fits the traditional definition of a highly indebted country, despite lingering liquidity constraints.
“With our debt-to-GDP ratio at about 45 percent, we are not a highly indebted country,” he said. “We may have liquidity challenges in servicing the debt, but we are no longer in that high debt category.”
He noted that many countries with similar debt levels can service their obligations normally, arguing that Zimbabwe’s arrears problem is largely a historical issue rather than a reflection of current fiscal recklessness.
“The fact that we are engaging in arrears clearance is a legacy issue that we just need to clear,” he said. “And we hope the discussions with the IMF will go well.”
If talks progress smoothly, Zimbabwe would enter a nine-month SMP, expected to run through to year-end.
Successful completion of the SMP would then pave the way for negotiations with international partners willing to provide short-term bridge financing to clear arrears.
Minister Ncube said the Government had already begun approaching potential partners to support the arrears clearance process once the SMP is completed.
“Our intention is that if this is successful, then we will enter into nine months of a staff-monitored programme, which will be complete by year’s end,” he said. “After that, we will negotiate with potential sponsors who can give us the bridge loans required to effect the arrears clearance process.”
He explained that the bridge financing needed is relatively modest in duration.
“We need a short-term, literally a 24-hour bridge loan,” he said. “That is what is required from a variety of supporters.”
However, he stressed that such financing would only be activated after the IMF programme is successfully concluded, reinforcing the Government’s commitment to a rules-based and transparent process.
While broader arrears clearance remains a work in progress, Minister Ncube said Zimbabwe is continuing to meet its obligations to creditors, albeit at modest levels.
“We are continuing to make token payments to all the Paris Club creditors, 17 of them, including the international financial institutions,” he said. “We are making token payments.”
At the same time, the Government is also servicing obligations to white former commercial farmers under the Global Compensation Deed valued at US$3,5 billion, as well as from the Bilateral Investment Promotion and Protection Agreement (BIPPA) with other countries.
“We are also making actual payments to the farmers,” he said. “So, we are meeting our obligations everywhere, although at a low level for the debt creditors.”
While Minister Ncube did not immediately provide cumulative figures for payments made so far, he said the consistent servicing of these instruments is sending a powerful signal to markets.
One of the most striking developments, according to the minister, is growing interest from global investors in Zimbabwe’s compensation bonds.
“We are seeing some very interesting reactions from the markets,” he said. “Global investors are now coming to us and saying, ‘We like these bonds. Why don’t we come in and do deals with the farmers so they can be paid faster?’”
Under such arrangements, investors would purchase the bonds from farmers, typically at a discount, and hold them to maturity.
Minister Ncube said the trend reflected rising confidence in Zimbabwe’s commitment to honour its obligations.
“It just shows that they do realise that we are serious about meeting our obligations and that the risk of default overall is low,” he said.
The minister said these developments support the broader narrative of improving macroeconomic stability, which is increasingly being felt beyond government and financial markets.
“My colleague spoke about the middle class feeling this stability,” he said, suggesting that consistency in policy and debt servicing is beginning to translate into confidence on the ground.
As the IMF mission prepares to arrive, all eyes will be on whether Zimbabwe can convert renewed engagement into a concrete breakthrough on arrears clearance, a long-awaited milestone in the country’s economic recovery journey.
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