Zimbabwe President Emmerson Mnangagwa has reassured development partners and creditors that his government is committed to the implementation of key reforms critical to resolving the country’s nearly $8.3 billion of debts and arrears. He was speaking during the high-level debt resolution forum held Monday, May 16, in the capital Harare, which was also addressed by the President of the African Development Bank, Dr. Akinwumi Adesina, the facilitator of the high-level dialogues, former president of Mozambique Joachim Chissano and attended by government officials, development partners, private sector, former farm owners and civil society organizations. According to President Mnangagwa, “in spite of the challenges associated with the debt overhang and further exacerbated by the albatross of the illegal economic sanctions, Zimbabwe is realizing key milestones towards moving our country forward for the good of our people.” The three key reform pillars for Zimbabwe’s implementation program include governance reforms, land tenure reforms, compensation of former farm owners, and the resolution of bilateral investment protection agreements. Economic sanctions driving Zimbabwe further into unsustainable debt Dr. Adesina, who is the official champion for Zimbabwe’s arrears clearance and debt resolution expressed deep concern about the country’s debt and a “debt accumulation from arrears that don’t have an end in sight.” He noted that they were meeting to facilitate a revived and vibrant Zimbabwe that can boost greater economic integration and prosperity for the entire Southern African Development region. “A revived Zimbabwe is good for Africa. A revived Zimbabwe is good for the world. Dr. Adesina thanked President Mnangagwa for his determination to resolve “well-known historical issues” that led to the imposition of economic sanctions on Zimbabwe. “Yes, it is the right thing to do, as two decades of sanctions have compromised the quality of life of the people of Zimbabwe,” he said. “Economic sanctions are driving Zimbabwe further into unsustainable debt. The debt itself is not as debilitating as the arrears on the debt since the country cannot access international concessional financing or other revenue or less expensive financing to pay down its debt obligations.” Of the $5.7 billion of bilateral debt, Dr. Adesina noted, 69% of this is accounted for by arrears. Similarly, he added, of the $2.6 billion of multilateral debt, 91% is accounted for by arrears. “Arrears is now the new debt of Zimbabwe. The past is hurting the present and the future of Zimbabwe.” According to Adesina, “Zimbabwe cannot run up the hill of economic recovery carrying a backpack of debt on its back. It is time for a comprehensive debt arrears clearance and debt resolution for Zimbabwe. But getting there is not a walk in the park. We must address history, to make history.” The majority of Zimbabwe’s combined $8.3 billion bilateral and multilateral debt is accounted for by arrears. The country currently publishes public debt statistics and debt payment information to ensure transparency and accountability. “There is a need to nurture the trust and goodwill which continues to grow among all parties,” President Mnangagwa said, adding that the country’s sustainable economic recovery requires augmentation by a comprehensive arrears clearance and debt resolution process which is backed by international financial institutions and the international community at large. In his remarks, Chissano said Zimbabwe’s situation is hurting the region. Chissano said: “The crisis in the country is having terrible consequences for the region, as Zimbabwe lies at the heart of Southern Africa. Many regional infrastructure development plans, including roads, railways, and power transmission lines have been brought to a standstill, as they have to run through the country. The continental free trade is also undermined by the situation prevailing in Zimbabwe.” Mobilizing $3.5 billion for compensation On land reforms and compensation, Dr. Adesina said the Bank is working with the Government of Zimbabwe to develop innovative financial instruments and structures that can be used to front-load the mobilization of $3.5 billion for compensations. He cautioned against further delays, which could erode trust and confidence. “So, timing counts; responsiveness counts; and financial sustainability counts,” he said. Adesina appealed to development partners “to work together on this proposed structure which can help leverage capital markets to fund compensations without additional debt for Zimbabwe.” The African Development Bank boss commended the government for its decision to make land titles available to enhance the security of commercial farmland. “These would be for 99-year leases which are also commercially viable, bankable, and transferable,” he recommended. Commitment to free and fair elections On electoral reforms, President Mnangagwa assured stakeholders that the county has put in place the requisite mechanisms to guarantee peaceful, free, fair, and credible elections scheduled for August 2023. “My government stands committed to consolidating constitutionalism, rule of law, good governance and protecting constitutionally enshrined rights and freedoms,” Mnangagwa said. Adesina commended the Government of Zimbabwe. “The people of Zimbabwe and the international community will be watching very closely. The full weight of re-engagement with the international community will depend on this. It will also depend not just on the election, but the entire electoral process that guarantees a credible election,” Adesina said. He further emphasized the need for stakeholders to ensure that there is concrete and measurable progress on the Zimbabwe Democracy and Economic Recovery Act (ZIDERA), which is critical for re-engagement with the United States and could be used to support advocacy for the lifting of select sanctions imposed by the US Congress. The African Development Bank chief and Chissano visited the US in early May to meet with leaders in the US Congress, Treasury Department, State Department, and other US agencies. Adesina said: “It was very clear that there is support for this high-level dialogue and a hope that it will translate into concrete and measurable progress on the ground to inform a consideration of the lifting of the sanctions under ZIDERA.” In December 2022, the Zimbabwean government established a Structured Dialogue Platform with all creditors and development partners, to institutionalize structured dialogue on economic and governance reforms to underpin the arrears clearance and debt resolution process.
