Zimbabwe’s Ncube sees $18 billion debt talks on course despite US exit

Talks on the restructuring of Zimbabwe’s $18 billion debt remain on track, even after the US paused its involvement in the discussions, Finance Minister Mthuli Ncube said.

The discussions led by African Development Bank President Akinwumi Adesina and Mozambique’s former leader, Joaquim Chissano, are continuing, Ncube said in response to a question by Bloomberg at a conference in Victoria Falls. He spoke after the US announced on Monday that in addition to withdrawing from the negotiations, it’s imposed sanctions on Zimbabwe’s leaders.

“We will remain engaged in the dialog process and our hope is that we will conclude soon as we have the International Monetary Fund coming through the staff-monitored program in a few weeks, which is part of process we have to take,” said Ncube. “We will keep the US informed using whatever channels we have.”

Zimbabwe’s government stopped servicing the loans it owes to international financial institutions more than two decades ago. The arrears it has accumulated on its external debt equated to 52% of its gross domestic product in 2022, up from 26% four years earlier, according to the World Bank. The debt precludes Zimbabwe from borrowing from the International Monetary Fund.

The country continue making quarterly token payments to its creditors, which include the AfDB, the Paris Club and the World Bank, according to Ncube.

Zimbabwe began making token payments in 2021 to the Paris Club for the first time in two decades as part of a wider commitment to settle its arrears, the Treasury said at the time. Payments to the World Bank and AfDB resumed in 2020.

The US sanctioned Zimbabwean President Emmerson Mnangagwa and other top officials over what it called “gross abuses” following last year’s disputed elections. The US also scrapped a previous sanctions program on Zimbabwe in order to target specific individuals.

Ncube said the scrapping of penalties against other entities affected by the sanctions regime was a step in the right direction. “It opens a window for Zimbabwe to engage with international community to access more resources,” he said.

The southern African nation assumed the chairmanship of the United Nations Economic Commission for Africa at a conference in Victoria Falls that ended on Tuesday. Finance ministers who attended the gathering resolved among other things to call for reforms to the global financial order, adopt a common stance on carbon-credit trading, and seek an easing of the debt burden on African nations.