On Monday, President Emmerson Mnangagwa hosted a conference with creditors and finance executives to discuss his administration’s plans for addressing Zimbabwe’s $12.7 billion external debt, which accounts for 81% of the country’s GDP. He revealed ongoing negotiations for a Staff Monitored Program (SMP), a prerequisite for embarking on much-needed policy reforms, with the International Monetary Fund. Akinwumi Adesina, the president of the African Development Bank (AfDB), who was also at the event, pledged financial support to help mitigate any potential adverse impacts from the reforms. He stated that the AfDB has money from a special fund to help settle Zimbabwe’s arrears. Analysts highlight clearing these arrears as critical to reducing borrowing costs and attracting investment. Harare’s unsustainable debt situation, compounded by decades of financial crises, remains a significant obstacle. However, with strategic reforms, the nation seeks to restore economic credibility and address its enduring economic challenges.
SOURCE: REUTERS