ZIMBABWE’S debt repayment efforts have been sluggish, with the country managing to pay a mere US$24,56 million to external creditors between January and May this year, despite owing a staggering US$12,3 billion, according to the latest available data.
The southern African country had a total debt overhang of US$21 billion as at June 2024, as the debt situation continues to deteriorate, posing significant threats to national development and access to global financial markets.
The figure stood at US$17,7 billion last year.
According to the 2024 mid-term budget statement presented by Finance minister Mthuli Ncube in Parliament on July 25, the debt consisted of external debt stock amounting to US$12,3 billion and domestic debt stock of US$8,7 billion.
In terms of the local currency, the country’s debt stock amounted to ZiG287,2 billion, comprising external debt of ZiG168,5 billion and domestic debt of ZiG118,7 billion.
Ncube said payments to external creditors amounted to US$19,8 million during the period January to May 2024.
These payments were made to China Exim Bank (NetOne Network Expansion Phase 1 Project and Victoria Falls International Airport Expansion Project).
Under legacy debts, Dutch farmers were paid US$2,5 million, while US$60 000 was paid towards servicing the debt to Equatorial Guinea. In addition, token payments for the same period amounted to US$2,2 million.
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The stock of domestic debt as at end June 2024 amounted to ZiG118,7 billion, composed of government securities amounting to ZiG69,3 billion, compensation of former farm owners, ZiG66,4 billion, and domestic arrears to service providers amounting to ZiG2,9 billion.
Government made domestic debt payments on maturing TBs amounting to Z$434 billion, ZiG77,7 million and US$356,2 million during the period January to June 2024.
“Government remains committed to the engagement and reengagement agenda through the implementation of the structured dialogue platform process,” Ncube said.
He said a total of US$7,6 million was disbursed during the first quarter of 2024 by African Development Bank (AfDB) to support governance related activities including implementation of the Arrears Clearance, Debt Relief and Restructuring Strategy.
“In order to unlock disbursements for on-going projects and programmes, government will prioritise debt service payments to active portfolios,” he said.
In addition, Ncube said the government will continue making quarterly token payments to the following international financial institutions: the AfDB, the World Bank and the European Investment Bank and the 16 Paris Club creditors as a sign of commitment to engagement and re-engagement agenda.
During the period January to June 2024, external loan disbursements amounted to US$11,23 million, comprising US$2,24 million to central government and US$9 million towards state-owned enterprises (on-lent loan).
The US$9 million was disbursed by India Exim Bank towards the ZPC Deka Pumping Station and River Water Intake System Project, while the OPEC Fund for International Development disbursed US$2,24 million for the smallholder irrigation revitalisation project.
