Zimbabwe targets 2027 for critical debt clearance push

Zimbabwe says 2027 will be a decisive year in its long-running effort to resolve a debt crisis that has left the country largely shut out of concessional international financing.

The government, which owed a combined US$21,8 billion to domestic and foreign creditors at the end of 2025, plans to seek bridge financing to clear billions of dollars in arrears owed to major international financial institutions (IFIs).

According to the latest Arrears Clearance and Debt Resolution Roadmap prepared by the Debt Office, Zimbabwe's public debt increased from US$21,5 billion in 2024 to US$21,8 billion in 2025, equivalent to about 37,4% of gross domestic product (GDP).

The country's debt crisis dates back decades, with Zimbabwe suspending debt repayments in 1999. Since then, arrears have accumulated and restricted access to international capital and concessional development funding.

The 48-page roadmap identifies 2027 as a critical milestone in the government's arrears clearance programme, with a series of reforms and financing arrangements expected to determine whether Zimbabwe can move towards restoring relations with international lenders.

A major obstacle is the US$2,7 billion Zimbabwe owes to three key international financial institutions.

Of this amount, US$1,5 billion is owed to the World Bank Group, US$740 million to the African Development Bank Group and US$435 million to the European Investment Bank.

The government says clearing these arrears is a prerequisite for securing an IMF financing programme and reopening access to concessional development finance.

"This is the most critical juncture for Zimbabwe, where government requires external support built upon successful implementation of the SMP," the roadmap states.

Zimbabwe recently secured an IMF Staff-Monitored Programme (SMP), which authorities regard as an important confidence-building step in the debt resolution process.

The next stage will involve securing bridge financing, followed by support from international "champions" backing Zimbabwe's debt resolution efforts.

Harare would then seek to qualify for the International Monetary Fund's Upper Credit Tranche (UCT) programme, a step that could ultimately pave the way for debt treatment under the G20 Common Framework.

The government is considering several options to raise the funds required to clear its multilateral arrears.

These include official financing on concessional or semi-concessional terms as well as alternative funding arrangements backed by Zimbabwean assets.

The Debt Office said government was engaging international financial institutions to develop a concrete proposal for consideration by official partners following approval of the SMP.

Once the major IFI arrears have been cleared and the SMP successfully implemented, Zimbabwe is expected to move towards a full IMF financing programme.

This would potentially allow the country to seek eligibility under the G20 Common Framework for restructuring bilateral and commercial debt.

That process would constitute the second phase of the broader debt resolution programme.

Civil society organisations have welcomed efforts to resolve Zimbabwe's debt crisis but warned that the process must deliver tangible benefits for ordinary citizens.

Zimbabwe Coalition on Debt and Development (Zimcodd) executive director John Maketo criticised what he described as the slow pace of negotiations and the absence of clear timelines for concluding the process.

"The leeward side of the story is the snail pace at which the dialogue has been taking place without clear timelines for conclusion," Maketo said.

He said international developments had also affected the process as creditor countries increasingly focused on domestic economic challenges.

Maketo urged government to ensure that the debt resolution strategy prioritises transparency and meaningful citizen participation.

He also called for a balance between debt servicing and investment in essential public services, including health, education, water, sanitation and social protection.

"Sustainable debt resolution," he argued, should ultimately translate into improved living standards and inclusive economic development.

Zimbabwe's prolonged debt crisis has attracted growing attention from international and continental institutions.

A report released in March by the United Nations Development Programme, African Union, United Nations Economic Commission for Africa and African Development Bank ranked Zimbabwe among Africa's seven most debt-distressed countries.

The other countries identified were the Republic of Congo, Djibouti, Ethiopia, Malawi, São Tomé and Príncipe and Sudan.

The report highlighted Zimbabwe's unresolved arrears to the World Bank, AfDB and other multilateral lenders as a major barrier to accessing concessional finance.

For Harare, the challenge now is to translate the 2027 roadmap into concrete financing arrangements, clear the multilateral arrears and secure a pathway back to international capital markets.

Success would potentially unlock access to cheaper development finance at a time when Zimbabwe requires substantial investment in infrastructure, public services and productive sectors to support sustainable economic growth.