The International Monetary Fund (IMF) has indicated that Zimbabwe’s external debt is understated by over $2 billion, a development that casts doubt on the country’s suitability for debt relief.

Zimbabwe, burdened with $21 billion debt, according to official figures, has been pushing for an urgent resolution with major Western creditors since the removal of long-time ruler Robert Mugabe in a military coup eight years ago, but without success.

According to the IMF’s newly released 2025 Article IV Consultation Report, Zimbabwe’s debt stood at a staggering $23.3 billion at the end of 2024, exposing a major discrepancy with the country’s acknowledged debt figures.

The Bretton Woods institution’s findings echoed earlier observations by the African Export–Import Bank (Afreximbank), which stated in its May country brief that Zimbabwe’s external debt was much higher than official estimates.

Zimbabwe has been accumulating arrears to external creditors for over two decades due to its failure to repay loans.“Total public and publicly guaranteed debt stood at $23.3 billion (72.9 percent of Gross Domestic Product) at the end of 2024,” the IMF report reads.

“The external debt stock was $16.7 billion (52.5 percent of GDP). Zimbabwe has been accumulating external arrears to its official creditors since the early 2000s, estimated at $7.4 billion (23.2 percent of GDP).“More recently, the government has started accumulating arrears to external commercial creditors, estimated at $47.4 million at the end of 2024 (0.1 percent of GDP), and has suspended servicing some of its domestic debt obligations, amounting to $425 million (0.8 percent of GDP) in 2025.”The IMF said the government’s economic policies did not appear sufficient to extricate the country from the debt crisis.“Current policies are insufficient to restore debt sustainability, which will require a balanced mix of fiscal consolidation, strengthened public debt management, growth-promoting structural reforms, and external arrears resolution—paving the way for new financing from multilateral and bilateral creditors,” the report added.

Loan defaultsZimbabwe began defaulting on loan repayments to the World Bank, the IMF, and other lenders in 2000 under the regime of the late Robert Mugabe. The defaults escalated during the height of a controversial land reform programme that began around the same time, leading to the country’s international isolation and economic ruin.

The country’s biggest Paris Club creditors are Germany, France, the United Kingdom, Japan, and the United States, with a combined external debt stock amounting to $2.9 billion—accounting for 74 percent of the total Paris Club external debt.

Since 2019, Zimbabwe has been using the Structured Dialogue Platform (SDP), championed by then African Development Bank (AfDB) president Akinwumi Adesina and former Mozambican President Joaquim Chissano, to push for a debt clearance programme.

It noted that while progress had been made on some sub-components, bilateral Paris Club creditors insisted that re-engagement required advances on all three pillars.“A roadmap to clearing arrears to the international financial institutions—including the World Bank, African Development Bank, and European Investment Bank—will be essential to facilitate an eventual debt resolution. But this would likely require support through a bridge loan,” the IMF added.“While discussions on a potential bridge loan are ongoing, creditors have called for an IMF Staff Monitoring Programme (SMP) to be in place before engaging on such financing.”Earlier this year, Zimbabwe indicated that it was seeking debt relief and bridge financing of $2.6 billion through the SDP’s Arrears Clearance and Debt Resolution Process.“Staff indicated that the authorities’ programme that could be supported by an SMP would need to be broadly aligned with Article IV and recent capacity development advice,” the IMF said.“The authorities have also initiated discussions with key commercial creditors on debt payment moratoria.”In July, World Bank president Ajay Banga warned that if Zimbabwe tried to go it alone, it would remain in a debt trap for the next five years.

The Common Framework was created in 2020 to help poor countries bring together a diverse set of creditors to restructure debts.“It is not clear whether Zimbabwe would be eligible for treatment under the G20 Common Framework or the Heavily Indebted Poor Countries (HIPC) Initiative, due to ineligibility from protracted arrears to multilateral creditors, and in HIPC’s case, because Zimbabwe’s income exceeds the required IDA eligibility criteria,” the IMF said.“However, as shown in other cases such as Sri Lanka and Suriname, official creditors may be willing to provide an ad hoc treatment consistent with restoring debt sustainability.”The IMF noted that Zimbabwean authorities broadly agree with the unsustainable debt assessment and reiterated their commitment to the re-engagement process.“In this context, they highlighted recent progress under the SDP, where an initial payment to farmers covered by bilateral investment agreements was welcomed by partners,” the report said.“The authorities also plan to launch a fourth SDP pillar focused on debt resolution, bringing creditors together to provide updates on the government’s roadmap to restoring debt sustainability.“They emphasised the urgency of the process, as financing options have narrowed due to constrained access to concessional financing from official sector creditors, limited access to non-concessional commercial lenders, and challenges in the domestic capital market.”Zimbabwe’s debt stock has risen in recent years because it resorted to seeking cheap infrastructure loans from China. However, it has not been able to repay the money due to an ongoing economic crisis characterised by hyperinflation and instability.

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