Zimbabwe’s Debt Crisis Reaches US$18 Billion: Finance Deputy Minister David Mnangagwa Addresses Parliament
Zimbabwe’s Debt Crisis Reaches $18 Billion, Threatening National Development
HARARE – Zimbabwe is facing a daunting debt crisis with a staggering $18 billion burden, posing significant threats to national development and access to global financial markets. Finance deputy minister David Mnangagwa addressed legislators in parliament on Wednesday, revealing the alarming state of the country’s debt situation.
Mnangagwa explained that the debt figures are still undergoing validation and reconciliation, including a $1.9 billion recapitalization of the Mutapa Fund and an additional $1.2 billion assumed from the Reserve Bank of Zimbabwe (RBZ). These amounts need to be reconciled and validated before being entered into the debt profile, a process that is currently underway.
The deputy minister also highlighted that debt reported to the African Development Bank in April was $2.7 billion higher than the approved budget for the year, which is still undergoing validation. The government’s efforts to address the crisis are being hindered by unclear fund usage, with 76 percent of external bilateral debt (approximately $6.2 billion) in arrears.
Paris Club members, including the US, Germany, France, Japan, and Britain, are owed $4.1 billion, with nearly 98 percent in default due to Zimbabwe’s economic crisis. Despite government appeals for debt forgiveness and penalty waivers, these efforts have been unsuccessful so far.
The United States halted its participation in a crucial debt restructuring program in January, citing lack of progress on human rights abuses, electoral reforms, and crackdown on opposition politicians. The situation remains dire as Zimbabwe grapples with its mounting debt burden, posing significant challenges to the country’s economic stability and development prospects.
