HARARE, Feb. 7 (NewsDay Live) – The International Monetary Fund (IMF) and Zimbabwean authorities have reached a staff-level agreement on a proposed 10-month Staff-Monitored Programme (SMP), a move aimed at entrenching macroeconomic stability, strengthening policy credibility, and advancing arrears clearance and debt restructuring.
The agreement follows years of macroeconomic instability, policy slippages, and protracted arrears that have constrained Zimbabwe’s access to external financing, weakened investor confidence, and stalled re-engagement with international creditors. As a result, the country has remained largely reliant on domestic resources and limited external support.
Owing to these challenges, Zimbabwe’s total public debt stood at US$23,4 billion as of September 2025, according to Treasury figures—an 8,5% increase from 2024—largely driven by rising domestic debt.
This increase has been attributed to the government’s inability to settle obligations to contractors, amid an ongoing liquidity crunch created by the Reserve Bank of Zimbabwe’s efforts to stabilise the Zimbabwe Gold (ZiG) currency.
However, Bretton Woods institutions reported Zimbabwe’s public debt at US$23,3 billion as of the end of 2024, rather than September 2025, challenging figures provided by the Ministry of Finance, Economic Development, and Investment Promotion.
“We are pleased to announce that the Zimbabwean authorities and the IMF team have reached a staff-level agreement on the key economic policies and reforms that could underpin a Staff-Monitored Programme (SMP), as outlined in the National Development Strategy 2 (NDS2),” IMF staff team leader Wojciech Maliszewski said following meetings with authorities held from January 28 to February 6.
“The proposed 10-month programme seeks to consolidate recent stabilisation gains, further strengthen fiscal and monetary policy frameworks, improve foreign exchange market functioning, and advance governance reforms to support stronger and more inclusive growth.”
Maliszewski said Zimbabwe’s economic recovery continues, supported by tight monetary policy, improving fiscal discipline, and favourable external conditions.“Growth strengthened in 2025, surpassing the initial projection of 6,6%, with solid performances in agriculture and mining, boosted by high gold prices and recovering platinum and lithium output,” he said.
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“Inflation fell to 4,1% in January 2026, aided by exchange rate stability and tight monetary conditions. Fiscal revenues also strengthened in 2025, supported by improved tax administration and new measures, narrowing the deficit and producing a small primary surplus.”
However, he noted that 76,1% of the economy remains informal—a sector often poorly captured in the calculation of inflation and other key economic indicators.
“Looking ahead, growth in 2026 is projected at around 5%, supported by continued strength in agriculture and mining. Inflation is expected to remain in single digits, reflecting tight monetary conditions and a more stable foreign exchange market,” Maliszewski said.
“The current account is projected to remain in surplus at about 3,8% of gross domestic product (GDP), while the primary fiscal balance is expected to register a surplus of about half a percent of GDP.
“Building on this progress, continued efforts will help entrench stability, deepen confidence in the ZiG, enhance the functioning of the foreign exchange market, sustain the rebuilding of reserve buffers, and reinforce the policy and institutional foundations for durable and broad-based growth.”
According to the IMF, the programme supports the authorities’ commitment to prudent budget execution and sound expenditure control.
“In line with the 2026 budget, spending in the first half of the year will be anchored on a conservative revenue outlook, helping ensure that expenditure remains aligned with available resources and avoiding the accumulation of new domestic arrears,” Maliszewski said.
“To reinforce fiscal discipline and transparency, the authorities will strengthen domestic arrears monitoring through regular reporting and clearer institutional responsibilities. Improving cash planning and public financial management is another important element of the programme.”
The IMF expects Zimbabwean authorities to enhance institutional arrangements for cash management and improve short-term liquidity forecasting to support more predictable and credible budget execution.
“Over time, broader public financial management (PFM) reforms—including upgrades to budget controls, improved capture of commitments, and steps toward a Treasury Single Account—will help strengthen the efficiency, transparency, and discipline of public spending,” Maliszewski said.
“The programme will support efforts to maintain low and stable inflation and preserve progress in easing pressures in the foreign exchange market. It will also help lay the foundations for further strengthening the monetary policy framework, including through measures to promote demand for the ZiG, enhance monetary policy operations, and improve foreign exchange (FX) market efficiency.”
The SMP is also expected to support structural reforms aimed at strengthening governance and improving the management of fiscal risks.
“In addition, the programme supports the authorities’ efforts to strengthen social protection. As part of this, the Zimbabwe Social Registry (ZISO) will be fully operationalised to improve the targeting and delivery of social assistance, helping ensure that support reaches households most in need,” Maliszewski said.
“The SMP is intended to establish a credible track record that supports the authorities’ re-engagement efforts and complements their broader strategy toward arrears clearance and debt restructuring, including eventual access to external concessional financing.”
However, he cautioned that continued progress on reforms—together with strengthened policy credibility and improved transparency—will be essential in laying the groundwork for more substantive discussions with international partners on arrears clearance and debt restructuring modalities in the near term.
