President Emmerson Mnangagwa has told his top diplomats to make Zimbabwe’s arrears clearance plan a priority, at a time when the strategy is at risk due to his failure to meet agreed governance benchmarks.
Meeting Zimbabwe’s ambassadors attending a Foreign Affairs retreat on Wednesday, Mnangagwa said the country needs a debt deal to clear its arrears so that it can once again access global capital.
Zimbabwe has accumulated arrears of at least US$6.6 billion. This means that the country cannot access new credit from institutions such as the World Bank, the African Development Bank and other lenders. The country has had to fund key infrastructure projects from the budget. While this has been touted as a source of pride for the government, it has driven inflation.
Mnangagwa said: “This (debt restructuring) is important for us as we seek to unlock fresh financing for critical infrastructure and other socioeconomic development projects, which improve the quality of life of the ordinary Zimbabwean and lift many out of poverty into prosperity.”
He told the envoys that they are “critical cogs in an effective media and communication strategy that would help consistently and accurately inform the world of the content, context and progress of Zimbabwe’s Arrears Clearance and Debt Resolution Strategy”.
Talks with Western lenders to restructure the debt are at risk because the country is failing to meet conditions on economic and governance reform targets. The 2023 election was a key test for the process, which is being led by AfDB president Akinwumi Adesina. But a row with the European Union, the key driver of the debt talks, following the August 2023 election has complicated matters even more.
Total public and publicly guaranteed debt was US$18 billion in December 2022. This is made up of US$12.8 billion of foreign debt and domestic debt of US$5.2 billion.
Mnangagwa said diplomatic stations “are not holiday resorts”, telling ambassadors to work harder. However, a recent report by a Parliamentary committee says Zimbabwe’s missions abroad are poorly funded, leaving diplomats unable to do their work.