Source: Govt seeks 30pc cut in domestic debt – herald
Wallace Ruzvidzo
Herald Reporter
GOVERNMENT has started discussions with suppliers to reduce domestic debt by as much as 30 percent, as the Second Republic continues to make steady progress in bringing domestic debt under control.
This was revealed by Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube at a meeting with IMF Executive Director Mr Adriano Ubisse, outgoing IMF African Department Director Mr Abebe Selassie, and IMF Deputy Managing Director Mr Nigel Clarke on the sidelines of the 2026 IMF/World Bank Spring Meetings, which kicked off yesterday in Washington DC, United States.
In a statement, the Ministry of Finance said that during the meeting, Professor Ncube provided the IMF with an update on Zimbabwe’s progress to date.
“During the meetings, the Minister briefed the IMF on progress to date, including achieving single‑digit inflation, containing domestic debt, avoiding the accumulation of arrears, strengthening tax administration and improving public finance management, among other achievements.
“Within this framework, Government has adjusted employee compensation within the US$9 billion ceiling and has initiated talks with suppliers to reduce domestic debt by up to 30 percent,” said the Ministry on its official X handle.
Treasury said domestic debt had ballooned due to arbitrage pricing by suppliers and contractors.
To curb this, Government last month introduced a National Standard Price List (NSPL) to guide the procurement of commonly used goods and services across ministries, departments and agencies (MDAs), including State‑owned enterprises and local authorities.
According to the latest Treasury debt figures at the start of the year, between January and September 2025, Government settled domestic debt obligations totalling ZiG11,2 billion, demonstrating its commitment to meeting obligations to investors and financial institutions.
Of this total, ZiG9,1 billion was used to pay maturing Treasury Bills and bonds, while ZiG2,1 billion went towards interest payments.
An additional ZiG4,8 billion was expected to be paid before the end of the year, underscoring the authorities’ determination to remain current on all debt obligations.
During the Washington meeting, the IMF expressed confidence in Zimbabwe’s economic progress, while urging the country to remain vigilant against external shocks, such as the ongoing fuel price surge, and to maintain a long‑term focus on the Staff‑Monitored Programme (SMP).
“The meetings are taking place against the backdrop of Zimbabwe and the IMF reaching a staff‑level agreement on economic policies and reforms, which is being monitored under a 10‑month Staff‑Monitored Programme (SMP) from March to September 2026, aimed at consolidating recent stabilisation gains and strengthening macroeconomic management,” said Treasury.
The Ministry of Finance said the SMP sets out measurable targets and reporting commitments to guide Zimbabwe’s economic reforms, aimed at strengthening confidence in the economy, improving public sector management and protecting priority social spending.
“It is drawn from the National Development Strategy 2 (NDS2), the current national economic blueprint, which was developed through extensive stakeholder consultations, particularly with citizens, and is expected to pave the way for broader engagement with the international community on arrears clearance and debt restructuring under the Structured Dialogue Platform.
“Key commitments include maintaining fiscal discipline, placing strong emphasis on safeguarding foreign‑currency reserves, limiting new non‑concessional external borrowing, protecting social and priority spending, and strengthening transparency and accountability,” said Treasury.
On arrears clearance, Professor Ncube informed the IMF that Zimbabwe has approached the World Bank and the African Development Bank for bridge financing, which is among the key issues being discussed at the Spring Meetings.
The Spring Meetings are being held under the theme “Building Prosperity Through Policy.”
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