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Zimbabwe races to implement IMF-backed reforms
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Zimbabwe is racing to implement wide-ranging fiscal and monetary reforms agreed with the International Monetary Fund (IMF), as the country seeks to exit its long-standing debt crisis, rebuild trust with international creditors, and unlock access to concessional financing.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the government was moving swiftly to implement key measures discussed during an IMF technical mission in June 2025. The reforms are seen as a critical step toward securing a Staff Monitored Programme (SMP), a prerequisite for broader debt restructuring and financial re-engagement with the global community.
"Government will continue implementing the policy measures which were agreed and concluded during the June 2025 IMF Mission," Ncube said, signalling Harare's urgency and commitment to the reform agenda.
Among the reforms being undertaken are efforts to close the 2025 fiscal gap, strengthen public financial management, improve transparency in state-owned enterprises, institutionalise the reporting of domestic arrears, and operationalise a rules-based monetary policy framework to ensure price stability. Additionally, the Treasury is working to improve the efficiency and transparency of the willing-buyer, willing-seller foreign exchange market amid ongoing currency volatility.
The government is also finalising operational manuals for the Zimbabwe Social Registry, a tool designed to improve the targeting of social protection programmes and public sector efficiency.
These reforms are integral to Zimbabwe's broader re-engagement and arrears clearance strategy, aimed at ending nearly two decades of economic isolation that stemmed from governance failures, sanctions, and ballooning public debt.
"Zimbabwe's debt distress situation is a structural barrier to Zimbabwe's inclusive and sustainable economic growth agenda," said Ncube.
To tackle this burden, the Finance Ministry is pushing forward with its Arrears Clearance and Debt Resolution Roadmap under the Structured Dialogue Platform Process (SDPP), aligned with the National Development Strategy 1 (NDS1) and its successor, NDS2, which will run from 2026 to 2030.
At the core of this roadmap are three strategic pillars: achieving macroeconomic stability and growth, improving governance, and implementing comprehensive land reforms. Key components include enhancing the value of 99-year leases, compensating former commercial farmers, and settling obligations under Bilateral Investment Promotion and Protection Agreements (BIPPAs).
"Significant progress has been achieved in implementing the reforms under the three strategic pillars, with the economy experiencing macroeconomic stability," Ncube said.
To consolidate reform momentum, Zimbabwe has officially requested a Staff Monitored Programme with the IMF. While the SMP does not offer direct financial support, it allows IMF staff to assess the credibility of Zimbabwe's economic reforms, setting the stage for future debt relief and financing.
"In order to establish a track record of implementing sound economic reforms, Government requested a Staff Monitored Programme with the IMF," Ncube confirmed. "Discussions with the IMF have been ongoing and are continuing, with a target to agree on all the prior actions, quantitative targets and structural benchmarks in the coming months."
Despite the forward movement, some business leaders and economists remain cautiously optimistic, insisting that success will depend on implementation.
Zimbabwe National Chamber of Commerce (ZNCC) CEO Christopher Mugaga welcomed the reforms but called for faster progress, particularly on state-owned enterprise restructuring and land reform. "We are happy with the current reforms, but more should be done to transform State owned entities (SOEs), pay former farm owners and make land bankable," he said. "The private sector is keen to see measurable progress."
Veteran economist Eddie Cross echoed those sentiments, praising the IMF's recommendations and urging urgent implementation. "The prescriptions of the IMF resulting from a recent visit all made complete sense, and would in fact lead to increased stability for the currency and the economy in a wider sense," he said.
He emphasized the need to establish currency credibility. "What is necessary is that the authorities float the currency so that the market establishes the real value and then build confidence so that we can revert to our own local currency for domestic trading activities."
Monetary Policy Committee member and economist Persistence Gwanyanya acknowledged the reforms but said structural issues remain. "We have achieved the liberalisation of the exchange rate and managed to transfer all fiscal duties and debts to the Treasury. However, IMF raised concerns about the central bank's involvement in the exchange rate and that process has to be accelerated," he said.
He also urged stronger coordination between fiscal and monetary authorities to support the reforms and facilitate the transition to the Zimbabwe Gold (ZiG) currency as the sole legal tender. "There should be coordination and congruence between the fiscal and monetary authorities to satisfy the necessary reform requirements."
With limited fiscal space, constrained foreign currency inflows, and a fragile sovereign credit profile, the stakes for Treasury are high. A successful reform drive and an eventual SMP could unlock goodwill and resources from global lenders. But failure to deliver could see Zimbabwe once again shut out of international capital markets.
As the country finds itself at a critical crossroads, its reform agenda has become both a lifeline and a test of credibility.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the government was moving swiftly to implement key measures discussed during an IMF technical mission in June 2025. The reforms are seen as a critical step toward securing a Staff Monitored Programme (SMP), a prerequisite for broader debt restructuring and financial re-engagement with the global community.
"Government will continue implementing the policy measures which were agreed and concluded during the June 2025 IMF Mission," Ncube said, signalling Harare's urgency and commitment to the reform agenda.
Among the reforms being undertaken are efforts to close the 2025 fiscal gap, strengthen public financial management, improve transparency in state-owned enterprises, institutionalise the reporting of domestic arrears, and operationalise a rules-based monetary policy framework to ensure price stability. Additionally, the Treasury is working to improve the efficiency and transparency of the willing-buyer, willing-seller foreign exchange market amid ongoing currency volatility.
The government is also finalising operational manuals for the Zimbabwe Social Registry, a tool designed to improve the targeting of social protection programmes and public sector efficiency.
These reforms are integral to Zimbabwe's broader re-engagement and arrears clearance strategy, aimed at ending nearly two decades of economic isolation that stemmed from governance failures, sanctions, and ballooning public debt.
"Zimbabwe's debt distress situation is a structural barrier to Zimbabwe's inclusive and sustainable economic growth agenda," said Ncube.
To tackle this burden, the Finance Ministry is pushing forward with its Arrears Clearance and Debt Resolution Roadmap under the Structured Dialogue Platform Process (SDPP), aligned with the National Development Strategy 1 (NDS1) and its successor, NDS2, which will run from 2026 to 2030.
At the core of this roadmap are three strategic pillars: achieving macroeconomic stability and growth, improving governance, and implementing comprehensive land reforms. Key components include enhancing the value of 99-year leases, compensating former commercial farmers, and settling obligations under Bilateral Investment Promotion and Protection Agreements (BIPPAs).
"Significant progress has been achieved in implementing the reforms under the three strategic pillars, with the economy experiencing macroeconomic stability," Ncube said.
To consolidate reform momentum, Zimbabwe has officially requested a Staff Monitored Programme with the IMF. While the SMP does not offer direct financial support, it allows IMF staff to assess the credibility of Zimbabwe's economic reforms, setting the stage for future debt relief and financing.
"In order to establish a track record of implementing sound economic reforms, Government requested a Staff Monitored Programme with the IMF," Ncube confirmed. "Discussions with the IMF have been ongoing and are continuing, with a target to agree on all the prior actions, quantitative targets and structural benchmarks in the coming months."
Despite the forward movement, some business leaders and economists remain cautiously optimistic, insisting that success will depend on implementation.
Zimbabwe National Chamber of Commerce (ZNCC) CEO Christopher Mugaga welcomed the reforms but called for faster progress, particularly on state-owned enterprise restructuring and land reform. "We are happy with the current reforms, but more should be done to transform State owned entities (SOEs), pay former farm owners and make land bankable," he said. "The private sector is keen to see measurable progress."
Veteran economist Eddie Cross echoed those sentiments, praising the IMF's recommendations and urging urgent implementation. "The prescriptions of the IMF resulting from a recent visit all made complete sense, and would in fact lead to increased stability for the currency and the economy in a wider sense," he said.
He emphasized the need to establish currency credibility. "What is necessary is that the authorities float the currency so that the market establishes the real value and then build confidence so that we can revert to our own local currency for domestic trading activities."
Monetary Policy Committee member and economist Persistence Gwanyanya acknowledged the reforms but said structural issues remain. "We have achieved the liberalisation of the exchange rate and managed to transfer all fiscal duties and debts to the Treasury. However, IMF raised concerns about the central bank's involvement in the exchange rate and that process has to be accelerated," he said.
He also urged stronger coordination between fiscal and monetary authorities to support the reforms and facilitate the transition to the Zimbabwe Gold (ZiG) currency as the sole legal tender. "There should be coordination and congruence between the fiscal and monetary authorities to satisfy the necessary reform requirements."
With limited fiscal space, constrained foreign currency inflows, and a fragile sovereign credit profile, the stakes for Treasury are high. A successful reform drive and an eventual SMP could unlock goodwill and resources from global lenders. But failure to deliver could see Zimbabwe once again shut out of international capital markets.
As the country finds itself at a critical crossroads, its reform agenda has become both a lifeline and a test of credibility.
Source - Business Times
