Afreximbank exposes US$2,4 billion hole in Zimbabwe external debt

The African Export-Import Bank (Afreximbank) has revealed a significant US$2.4 billion discrepancy in Zimbabwe's official external debt data, raising fresh concerns over the credibility of the country's fiscal reporting and debt management.

While Zimbabwe's Ministry of Finance recently pegged the nation's external debt at US$12.2 billion as of December 2024, Afreximbank's newly released country brief places the figure much higher - at US$14.6 billion. The revelation, disclosed during the African Development Bank (AfDB) annual meetings, has renewed scrutiny on Harare's debt transparency.

"As of end-December 2024, Zimbabwe's total public and publicly guaranteed debt stock stood at US$21 billion, comprising external debt of US$12.2 billion and domestic debt of US$8.8 billion," Treasury said in a statement earlier this week.

But according to Afreximbank: "As of 2024, the total external debt was US$14.6 billion, a marginal increase from US$14.2 billion in 2023. Projections indicate that external debt obligations will reach approximately US$14.9 billion in 2025 and US$15.5 billion in 2026."

The discrepancy has prompted renewed concern over Zimbabwe's public financial disclosures, especially as the country seeks US$2.6 billion in bridge financing and debt relief under the Structured Dialogue Platform.

This is not the first time Afreximbank has contradicted Zimbabwean authorities on debt figures. In 2021, then Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya claimed Afreximbank had lent US$9 billion to the country - a statement Afreximbank President Benedict Oramah swiftly corrected, placing the actual exposure at US$13 billion.

Such inconsistencies, observers warn, could undermine Zimbabwe's negotiations with international creditors and further erode investor confidence.

Afreximbank's report also paints a grim picture of Zimbabwe's debt sustainability. The country's external debt-to-GDP ratio is estimated at 61% for 2024 and is projected to rise to 67% in 2025 and 72% in 2026 - well above the 50% threshold considered manageable for developing economies.

The external debt service-to-revenue ratio is similarly alarming, projected to reach 52.2% in 2025 and 54.4% in 2026 - nearly triple the recommended ceiling of 18%.

"These trends point to mounting fiscal stress," the bank said in its assessment. "However, debt relief negotiations, economic reforms, and improved domestic revenue mobilisation could ease the burden over the medium term."

Afreximbank's warnings come at a sensitive moment, as Zimbabwe attempts to repair relations with global lenders and reintegrate into international capital markets. The data discrepancies risk derailing efforts to restructure debt and access new concessional financing.

"Overall, the assessment suggests Zimbabwe is in debt distress," Afreximbank concluded. "Urgent steps are required to strengthen fiscal discipline, improve debt transparency, and implement far-reaching structural reforms."

Analysts caution that unless Harare addresses these credibility gaps and adopts a more rigorous reporting framework, future support from bilateral and multilateral lenders could remain elusive.