Mnangagwa to Lead Key Forum on Zimbabwe’s Debt Arrears and Economic Reforms

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HARARE – President Emmerson Mnangagwa is set to headline a pivotal High-Level Structured Dialogue Platform today, aimed at updating stakeholders on Zimbabwe’s ongoing national debt resolution process.

The meeting, according to State media The Herald, which will take place in Harare, will focus on the progress made in addressing the country’s debt arrears and discuss a roadmap to manage its indebtedness sustainably.

The event will feature prominent figures, including Dr. Akinwumi Adesina, President of the African Development Bank (AfDB), who has been a key champion of Zimbabwe’s debt resolution efforts, and former Mozambican President, Joaquim Chissano, who serves as the high-level facilitator for the process. These leaders will be joined by various stakeholders, including government officials, external creditors, development partners, civil society organizations, and private sector representatives.

The dialogue comes at a time of renewed efforts to tackle Zimbabwe’s substantial national debt. In a related development, Time Bank of Zimbabwe has increased its syndicated loan proposal to the Government from US$35 billion to US$38 billion. The additional funds are intended to finance compensation for various groups, including white former commercial farmers and support the broader process of resolving Zimbabwe’s sovereign debt.

The country’s external debt, which includes arrears to multilateral development banks such as the African Development Bank, World Bank, and European Investment Bank, remains a significant challenge. The government is focusing on clearing arrears and securing a sustainable path for repayment, with the help of both local and international partners.

Among the key debt obligations under discussion are payments to foreign lenders, totalling US$20.4 billion; compensation for land improvements by Indigenous Zimbabweans whose land was acquired by the Government without compensation before 1980, estimated at US$10 billion; and compensation for land improvements by white former commercial farmers, pegged at US$3.5 billion. The latter is a part of the Global Compensation Deed (GCD) signed with the farmers in July 2020, which outlines the terms for compensating affected farmers.

The compensation of these groups, particularly the former farm owners, is a central component of Zimbabwe’s debt resolution efforts. Time Bank’s involvement in the process includes facilitating banking solutions to assist the farmers in raising funds from donors for compensations, particularly for land improvements amounting to US$3.2 billion. This initiative is seen as a way to improve confidence in Zimbabwe’s business environment, contributing to the wider economic reforms.

Today’s forum will also feature progress reports from the co-chairs of the sector working groups set up for the debt resolution process. These working groups have focused on economic growth reforms, land tenure issues, governance improvements, and the resolution of Bilateral Investment Protection and Promotion Agreements (BIPPAs).

Since assuming office in 2017, President Mnangagwa has consistently committed to undertaking reforms that address the country’s debt challenges. The government has made significant strides in implementing reforms under the arrears clearance and debt resolution process, which is seen as crucial to unlocking economic stability and growth.

The Structured Dialogue Platform was established by the Government in December 2022 to foster regular communication with creditors and development partners. This forum is designed to institutionalize dialogue on economic reforms and governance issues, which underpin the debt resolution process. The government is optimistic that continued dialogue and collaboration will lead to a lasting solution to Zimbabwe’s debt problems.

The outcomes of today’s meeting will likely shape the next phase of the country’s debt resolution efforts. The discussion will include a plenary session on the roadmap for the Arrears Clearance and Debt Resolution Process, outlining the next steps to ensure Zimbabwe’s long-term economic recovery. The government’s transparent and collaborative approach aims to resolve the country’s long-standing debt challenges in a sustainable manner.

As Zimbabwe continues to make progress with these reforms, it remains committed to working with its creditors and development partners to overcome its economic challenges. The success of the Structured Dialogue Platform and the broader debt resolution process will depend on sustained cooperation between all stakeholders, with the goal of achieving a more stable and prosperous future for Zimbabwe.