KEY POINTS
- AfDB President Akinwumi Adesina is committed to restructuring Zimbabwe’s $21 billion debt by August 2025.
- Zimbabwe plans to use the African Development Fund to clear arrears and regain access to international capital markets.
- The nation is negotiating an IMF program and compensating seized landowners as part of its debt restructuring efforts.
Zimbabwe’s chief debt negotiator, African Development Bank (AfDB) President Akinwumi Adesina, is pushing to secure a debt restructuring deal for Zimbabwe before his tenure ends in August 2025. Speaking at a debt conference in Harare, Adesina emphasized his commitment to resolving Zimbabwe’s financial challenges, saying, “I will work as hard as I can so that we can get this done before my time ends.”
Adesina, alongside former Mozambican President Joaquim Chissano, has been spearheading negotiations with creditors, including the World Bank, Paris Club, and European Investment Bank, since 2022. Zimbabwe, which owes $21 billion, has been excluded from international capital markets for over 20 years. To aid the restructuring process, the government recently hired Global Sovereign Advisory and Kepler-Karst for technical assistance.
Plans to tap AfDB’s development fund
The AfDB may utilize its African Development Fund to assist Zimbabwe, a strategy previously used for debt relief in Sudan and Somalia. Adesina disclosed plans to propose a special allocation during the bank’s 17th replenishment round, stating, “We are going to make a request to have it set aside to clear Zimbabwe’s arrears.”
The restructuring process has also involved efforts to address historical grievances. Zimbabwe has committed to paying $331 million to 439 White farmers whose land was seized during the controversial land reforms of 2000. Adesina highlighted the importance of this financial settlement as a confidence-building measure for creditors.
Negotiations with IMF and social reforms
Zimbabwe is negotiating a staff-monitored program (SMP) with the International Monetary Fund (IMF), which, if approved, would mark its first engagement with the IMF in five years. President Emmerson Mnangagwa emphasized the necessity of social protections during the reforms, noting, “The implementation of reforms under the SMP impacts vulnerable groups. Protecting them through effective social safety nets is critical.”
The government’s commitment to reform, alongside support from international financial institutions, is expected to pave the way for Zimbabwe’s reintegration into global financial markets. Adesina’s leadership and the coordinated efforts of stakeholders could potentially redefine the nation’s economic trajectory, offering a path toward stability and growth.
