• Zimbabwe is seeking $2.6 billion in bridge financing to clear $6.7 billion in arrears, part of its $21 billion public debt
  • The country faces significant policy challenges, including a large fiscal deficit and state enterprise losses, which threaten debt sustainability
  • The PVO Act has raised concerns about civil society autonomy and undermines creditor confidence

                               

Harare- Zimbabwe is pursuing $2.6 billion in bridge financing to clear $6.7 billion in arrears, a critical component of its $21 billion public debt, equivalent to 96.6% of its 2023 GDP (World Bank, 2024).

Finance Minister Mthuli Ncube is in Washington at the IMF and World Bank Spring Meetings, advocating for a Staff Monitored Programme (SMP) to rebuild creditor trust and unlock low-cost global lending.

This effort aims to address Zimbabwe’s economic isolation and secure affordable financing for infrastructure, vital for recovery.

The country’s debt, comprising $13 billion external and $8 billion domestic obligations, severely limits international lending access due to $6.7 billion in arrears (AfDB, 2024).

A fiscal deficit of 17.5% of GDP and state enterprise losses at 2% of GDP in 2023 reflects the urgency of debt sustainability (World Bank, 2024).

Ncube has appealed to 10 wealthy nations for loans to resolve this impasse, dating back to 1999.

                         

The SMP, a non-financial IMF program, monitors policy adherence to signal reform commitment. Success could unlock IMF lending and facilitate World Bank and AfDB financing by late 2025, per AfDB President Adesina.

However, a failed 2019-2020 SMP highlights risks of policy reversals.

The SMP demands fiscal discipline, monetary stabilization, governance improvements, structural reforms, and social protection. Key measures include reducing the fiscal deficit, stabilizing the Zimbabwe Gold (ZiG) with reserves covering less than one month of imports, and boosting foreign direct investment, which was $350 million in 2023 (World Bank, 2023).

Social protection targets the 38% of Zimbabweans below the $2.15 poverty line, but compliance faces political resistance, limited fiscal space (60% of the 2023 budget services debt), and unrest risks.

                               

A significant obstacle is the Private Voluntary Organizations (PVO) Act, signed into law on April 11, 2025, by President Emmerson Mnangagwa (ZimEye, 2025). This act grants the government extensive control over NGOs, allowing scrutiny of funding and leadership suspensions, raising concerns about civil society autonomy.

The EU suspended €20 million in 2025 governance funding, citing democratic threats (The Zimbabwean, 2025). With 15 NGOs at risk of deregistration and Human Rights Watch noting civic space restrictions, the act undermines creditor confidence (Human Rights Watch, 2024).

The government claims it aligns with anti-money laundering standards, but critics, including Amnesty International, argue existing laws suffice and the act risks abuse to silence opposition.

The PVO Act jeoparders Zimbabwe’s debt relief by alienating Western creditors, who provide only a 20-30% chance of funding the $2.6 billion due to governance concerns. Zimbabwe ranks in the bottom 10% for voice and accountability (World Bank, 2023) and 124th in Transparency International’s 2024 Corruption Perceptions Index.

This pushes reliance toward non-Western creditors like China, risking long-term debt sustainability. Amending the PVO Act and advancing judicial independence, electoral transparency, and anti-corruption measures are critical to align with SMP conditions and restore trust.

Sustained dialogue with creditors and SADC, leveraging Adesina’s leadership, is essential. If reforms hold, Zimbabwe could achieve debt relief and economic recovery by 2030.

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