IMF 'exposes' Zimbabwe debt under reporting

An International Monetary Fund (IMF) assessment has raised concerns over Zimbabwe's fiscal transparency, revealing that the country may have understated its total public debt by approximately US$2 billion in 2024. The revelation comes after the IMF conducted a Staff Monitored Programme (SMP) assessment, which also flagged discrepancies in Zimbabwe's external debt reporting.

While the Ministry of Finance had reported Zimbabwe's public debt at US$21 billion in May 2024 during the African Development Bank's annual meetings, the IMF's 2025 Article IV Consultation Report estimates it at US$23.3 billion, with external debt alone potentially understated by about US$4.5 billion.

According to the IMF, total public and publicly guaranteed debt stood at US$23.3 billion, equivalent to 72.9% of GDP by the end of 2024. The external debt stock was US$16.7 billion (52.5% of GDP), with arrears to official creditors estimated at US$7.4 billion (23.2% of GDP). Zimbabwe also accumulated arrears to external commercial creditors amounting to US$47.4 million and suspended some domestic debt obligations totalling US$425 million in 2025.

The Fund warned that current policies were insufficient to restore debt sustainability. It recommended a combination of fiscal consolidation, strengthened public debt management, growth-promoting structural reforms, and resolution of external arrears to pave the way for renewed financing from multilateral and bilateral creditors.

This is not the first time Zimbabwe's official financial statistics have been questioned. Discrepancies have previously emerged in inflation reporting, notably during the country's hyperinflation crisis from 2007 to 2008, when official Consumer Price Index (CPI) figures sharply diverged from independent estimates.

The IMF also highlighted the Structured Dialogue Platform (SDP) as a framework for Zimbabwe's engagement with creditors, focusing on economic, political-governance, and land reform issues. Progress under the SDP has been uneven, with bilateral Paris Club creditors demanding advances on all three pillars before further engagement.

Zimbabwe is seeking debt relief and bridge financing of US$2.6 billion through the SDP's Arrears Clearance and Debt Resolution Process. Discussions with commercial creditors regarding debt moratoria have also begun. The IMF emphasised the need to reconcile Zimbabwe's debt and establish clear restructuring parameters, noting potential limitations under the G20 Common Framework and the Heavily Indebted Poor Countries (HIPC) Initiative.

Despite the challenges, Zimbabwean authorities reportedly agree with the IMF's unsustainable debt assessment and remain committed to the reengagement process. They have taken initial steps, such as making payments to farmers under bilateral investment agreements, and plan to launch a fourth SDP pillar focusing on debt resolution.

Zimbabwe's situation mirrors debt distress seen elsewhere in Southern Africa. Mozambique, Zambia, Malawi, and Angola have all grappled with high debt burdens, hidden loans, and default risks, highlighting the region-wide challenge of managing fiscal sustainability amid constrained financing options.

The IMF's findings underscore the urgency for Zimbabwe to implement a robust debt resolution strategy and improve transparency to restore credibility with international creditors and secure long-term economic stability.