Zimbabwe, which had more than $14 billion in external debt as of September 2022, has not been able to secure financing from the likes of the International Monetary Fund in more than two decades, due to its arrears.
“Zimbabwe’s debt overhang continues to weigh down heavily on our development efforts,” President Emmerson Mnangagwa said, as part of a meeting on the southern African country’s debt that was open to reporters.
“We have no access to new lines of credit, including from the multilateral banks, such as the World Bank Group.”
About 17 countries from the Paris Club of creditor nations were scheduled to attend the meeting, along with the World Bank, African Development Bank (AfDB) and European Investment Bank, to discuss progress on economic and governance reforms, finance minister Mthuli Ncube said last week.
Zimbabwe will compensate white farmers, whose land was forcibly taken, over 10 years instead of the 20 announced three years ago, Ncube said on Thursday in a news conference, adding that the money would be raised through treasury bills.
“We should try to pay faster than 10 years,” Ncube said, noting that most of the farmers were now old.
Zimbabwe agreed in 2020 to pay $3.5 billion in compensation to local white farmers whose land was taken by the government to resettle Black families, while foreign white farmers were allowed to apply to get seized land back, moving closer to resolving one of the most divisive policies of the Robert Mugabe era.
Other measures Zimbabwe needs to carry out include bringing together the official and black market foreign exchange rates and reforming the central bank, which currently has a quasi-fiscal role that fuels inflation, African Development Bank President Akinwumi Adesina told Reuters in an interview.
“You have to restructure debt,” said Adesina, who is co-chairing the debt resolution process, adding that he could discuss the amount that needs writing off after a “high level” meeting with Zimbabwe’s creditors in the second week of May.