Zimbabwe wants seven different helpers to pay off its old debts. These helpers include countries, big banks, and private money groups. They plan to give cash, make promises, and teach Zimbabwe how to fix its money problems. This marks a big step toward paying what they owe to foreign banks and countries.
First, Zimbabwe will undergo a nine-month test period with the International Monetary Fund, which should start after March ends. During this time, Zimbabwe must show that it handles money wisely. Good behavior unlocks cheaper loans from outside the country. Zimbabwe has already talked to three possible helpers about clearing its $7.5 billion in past-due bills.
Money Minister Mthuli Ncube says they keep talking with possible helpers. He explained that they must finish the IMF test program before anything else happens. The test watches how Zimbabwe spends money and makes sure it follows smart rules. Only after nine months can they start paying old debts. During that waiting time, they need to find countries willing to give short loans.
These short loans last only about a day but help clear old debts quickly. Minister Ncube has already met face-to-face with three money chiefs from other countries. He can't say who yet until they agree to help. Zimbabwe picked the direct loan path, where another country gives money to pay off what Zimbabwe owes. Then, Zimbabwe promises to change certain money rules as part of the deal.
Zimbabwe started working on debt problems in 2022. It wants to pay what it owes to the World Bank, African Development Bank, and groups like the Paris Club. The country promised to spend money carefully, run the government better, and make things right with farmers who lost land years ago. It's already started paying over 500 former farm owners.
The government approved payments to 57 farmers who had special international agreements protecting their farms. Another 444 farms got cleared for payment under a different agreement. These farmers only get money for improvements they made, not for the land itself. The Treasury planned to pay $1.91 million last year to settle claims for ten protected farms completely.
The other 84 protected farms should receive $215,355 each. The remaining money will be paid over four years ending in 2028. The Treasury set aside $331.7 million for the 444 regular farms. Each farmer gets 1% cash this year, with the rest paid through government bonds over ten years. Last year, $20 million went toward protected farms and $35 million toward regular farms.
Former Mozambique President Joachim Chissano helps lead the debt fixing plan with African Development Bank president Akinwumi Adesina. They met President Mnangagwa last week to check progress. Adesina promised his bank would still support Zimbabwe even after his job ends in August. He said they hired financial experts to help and look for ways to get bridge loans.
Chissano feels good about how things move forward. He worried about what would happen when Adesina left his position but felt better after Adesina promised to keep helping personally. As of September 2024, Zimbabwe owed $12.4 billion to outside groups. This includes $6.3 billion to other countries, $3.2 billion to big world banks, and $2.9 billion in central bank debts the Treasury took over in 2023.
Other countries have successfully used similar plans before. Greece got €260 billion between 2010 and 2018 from European groups and the IMF. These loans came with strict budget cuts and reform demands. Zambia defaulted on debts in 2020 during COVID-19 but later received $1.3 billion from the IMF. China, France, and others restructured what Zambia owed them. They made Zambia clean up corruption and manage money better.
First, Zimbabwe will undergo a nine-month test period with the International Monetary Fund, which should start after March ends. During this time, Zimbabwe must show that it handles money wisely. Good behavior unlocks cheaper loans from outside the country. Zimbabwe has already talked to three possible helpers about clearing its $7.5 billion in past-due bills.
Money Minister Mthuli Ncube says they keep talking with possible helpers. He explained that they must finish the IMF test program before anything else happens. The test watches how Zimbabwe spends money and makes sure it follows smart rules. Only after nine months can they start paying old debts. During that waiting time, they need to find countries willing to give short loans.
These short loans last only about a day but help clear old debts quickly. Minister Ncube has already met face-to-face with three money chiefs from other countries. He can't say who yet until they agree to help. Zimbabwe picked the direct loan path, where another country gives money to pay off what Zimbabwe owes. Then, Zimbabwe promises to change certain money rules as part of the deal.
Zimbabwe started working on debt problems in 2022. It wants to pay what it owes to the World Bank, African Development Bank, and groups like the Paris Club. The country promised to spend money carefully, run the government better, and make things right with farmers who lost land years ago. It's already started paying over 500 former farm owners.
The government approved payments to 57 farmers who had special international agreements protecting their farms. Another 444 farms got cleared for payment under a different agreement. These farmers only get money for improvements they made, not for the land itself. The Treasury planned to pay $1.91 million last year to settle claims for ten protected farms completely.
The other 84 protected farms should receive $215,355 each. The remaining money will be paid over four years ending in 2028. The Treasury set aside $331.7 million for the 444 regular farms. Each farmer gets 1% cash this year, with the rest paid through government bonds over ten years. Last year, $20 million went toward protected farms and $35 million toward regular farms.
Former Mozambique President Joachim Chissano helps lead the debt fixing plan with African Development Bank president Akinwumi Adesina. They met President Mnangagwa last week to check progress. Adesina promised his bank would still support Zimbabwe even after his job ends in August. He said they hired financial experts to help and look for ways to get bridge loans.
Chissano feels good about how things move forward. He worried about what would happen when Adesina left his position but felt better after Adesina promised to keep helping personally. As of September 2024, Zimbabwe owed $12.4 billion to outside groups. This includes $6.3 billion to other countries, $3.2 billion to big world banks, and $2.9 billion in central bank debts the Treasury took over in 2023.
Other countries have successfully used similar plans before. Greece got €260 billion between 2010 and 2018 from European groups and the IMF. These loans came with strict budget cuts and reform demands. Zambia defaulted on debts in 2020 during COVID-19 but later received $1.3 billion from the IMF. China, France, and others restructured what Zambia owed them. They made Zambia clean up corruption and manage money better.
