Fierce pushback as Zimbabwe debt riots into dangerous territory

A fierce critic of Zimbabwe's debt management has raised fresh concerns over the credibility and inclusivity of the country's reform agenda, as the African Development Bank (AfDB) moves to inject US$4 million to support ongoing arrears clearance efforts.

The Zimbabwe Coalition on Debt and Development (Zimcodd) warned that Zimbabwe's rising debt burden was pushing the country deeper into fiscal distress, despite government assurances that economic reforms are gaining traction.

The warning comes amid reports that a regional survey by the United Nations Development Programme, African Union, Economic Commission for Africa and AfDB ranked Zimbabwe among Africa's most debt-distressed economies.

Zimcodd questioned the effectiveness of the government's reform agenda, asking why the country's debt situation continues to worsen if corrective measures are working.

"With public debt estimated at around US$23 billion, Zimbabwe is facing serious concerns about intergenerational debt injustice," the organisation said.

It warned that continued borrowing without transparency and accountability risks deepening inequality and weakening long-term economic stability.

Zimcodd also raised concerns about government guarantees on private sector projects, arguing that such arrangements could create hidden liabilities that may eventually fall on taxpayers.

"Government guarantees on private infrastructure and investment projects create significant contingent liabilities that may not immediately appear in public debt statistics but can eventually become obligations for taxpayers if projects fail or underperform," it said.

The organisation called for stronger parliamentary oversight, transparency in procurement processes and full disclosure of public debt obligations to prevent renewed fiscal crises.

Zimbabwe's debt crisis has been a long-standing obstacle to economic recovery, with the country remaining locked out of international capital markets for over two decades due to arrears and governance concerns.

Debt management reforms were prioritised by President Emmerson Mnangagwa after taking office in 2017, including the establishment of structured engagement processes with international creditors.

More than a year ago, Zimbabwe engaged former African Development Bank president Akinwumi Adesina and former Mozambican president Joaquim Chissano to help lead its arrears clearance and debt resolution efforts.

However, critics say the reform programme has been undermined by policy inconsistencies and governance concerns, including disputes over legislation such as the Private Voluntary Organisations (PVO) Act.

This week, the AfDB approved a US$4 million grant to support Zimbabwe's arrears clearance and re-engagement process through the Zimbabwe Arrears Clearance Dialogue Enhancement Project (ZACDEP).

AfDB country manager for Zimbabwe Eyerusalem Fasika said the support reaffirmed the bank's commitment to Zimbabwe's economic recovery.

"Clearing arrears is the gateway to unlocking the development financing the country urgently needs," she said.

The latest regional report also placed Zimbabwe alongside several African countries facing severe fiscal instability, highlighting rising debt vulnerabilities across the continent.

Analysts say Zimbabwe's debt profile has become increasingly complex, with growing reliance on sovereign guarantees, private borrowing and short-term financing instruments.

The Zimbabwe Investment and Development Agency reported that foreign currency-denominated debt financing surged to US$431.37 million in the first quarter of 2026, nearly double the previous peak recorded in late 2025.

Some analysts interpret this as a sign of improving liquidity conditions, while others warn it may reflect deeper structural weaknesses in the economy's financing model.

The debate continues as African economies grapple with rising debt pressures driven by post-pandemic borrowing, climate shocks, inflation and tightening global financial conditions.