IMF urges Zimbabwe to revamp $10.5 billion of unsustainable debt
The International Monetary Fund (IMF) said Zimbabwe must restructure its external debt of more than $10 billion, before the southern African nation can receive any fresh credit lines from the institution.
The IMF is unable to provide financial support to the nation due to unsustainable debt levels and official external arrears, it said at the end of a virtual mission, led by Dhaneshwar Ghura, mission chief for Zimbabwe. Government debt was at 86% of gross domestic product in 2020, according to the IMF.
“A Fund financial arrangement would require a clear path to comprehensive restructuring of Zimbabwe’s external debt, including the clearance of arrears and obtaining financing assurances from creditors,” the Washington-based lender said in a statement Tuesday.
The southern African nation is saddled with $10.5 billion of debt owed to international financial institutions including the Paris Club, African Development Bank and the World Bank, which has effectively cut it off from multilateral lenders. Treasury started repaying a portion of the $3.78 billion it owes Paris Club members this year, to regain access to foreign loans.
