The head of the African Development Bank President Dr Akinwumi Adesina has urged development partners to “walk with” Zimbabwe, the only African country currently under economic sanctions by its creditors.
Adesina spoke at a roundtable on Zimbabwe’s debt arrears clearance held on Wednesday 24 May, during the African Development Bank Group’s 2023 Annual Meetings in Sharm El Sheikh, Egypt. During the session Zimbabwe’s government, led by President Dr. Emmerson Mnangagwa, briefed the bank group’s governors on the ongoing Structured Dialogue Platform with the country’s s creditors and development partners.
Representatives from the Southern Africa Development Community (SADC), the South African government, the Common Market for Eastern and Southern Africa (COMESA), the United Kingdom, the United States of America, the European Union, the World Bank Group, the International Monetary Fund (IMF), Switzerland and the United Nations, attended the event.
Adesina said inviting Zimbabwe to hold a side event on its arrears’ clearance process during the Annual Meetings, showed “dialogue is the best way of resolving issues by understanding differences and closing divergencies.”
He said the objective was to build common understanding. “We are engaging, we listen, and we are honest brokers,” Adesina told participants.
The Zimbabwean government established the Structured Dialogue Platform in December 2022. Its goal is to institutionalize structured dialogue on economic and governance reforms to underpin the arrears clearance and debt resolution process. President Mnangagwa invited Adesina to champion the process, and former Mozambican President Joaquim Chissano to serve as high-level facilitator of the dialogues.
As the champion of Zimbabwe’s debt arrears clearance, Adesina said President Mnangagwa and his government are committed to the process, adding, “we have to accompany Zimbabwe and help the country to take tough reforms.”
The African Development Bank chief noted Zimbabwe’s considerable economic progress despite soaring poverty levels, its external debt burden, and high unemployment. However, he pointed out that the country’s performance impacted the economic growth prospects of the southern African sub-region.
“It is very important to lift the Southern African Development Community up, and we cannot lift SADC without Zimbabwe,” he said.
Adesina added that the African Continental Free Trade Area represented Africa’s biggest opportunity today but that this opportunity could not be realized without “a new and resurgent Zimbabwe.”
President Mnangagwa thanked the African Development Bank for the invitation and gave a comprehensive brief on economic, governance and land reforms, which his government pledged and has begun to implement, as part of the structured dialogue process.
“I would like to reiterate that the Government of Zimbabwe stands committed to resolve its long overdue debt arrears and reengagement with world’s development partners and creditors,” the president emphasized.
He said: “Good governance, the rule of law, transparency and accountability continue to be entrenched. We are strengthening institutions that support democracy to ensure their effectiveness and efficiency.”
Mnangagwa pointed out that Zimbabwe, once the breadbasket of the African continent, had also attained food sufficiency in wheat production.
“I am pleased to highlight that Zimbabwe is now food secure. We are self-sufficient in wheat production since 2022, saving up to $300 million annually, and no doubt…looking at the figures this winter season, we may have surplus wheat to sell,” the president said.
Professor Mthuli Ncube, Zimbabwe’s finance and economic development minister described his country’s debt burden as an albatross, though noting that dialogue had brought Zimbabwe and its creditors closer together.
Chissano, said Zimbabwe’s staggering debt, of which 80% are arrears, had become a formidable impediment for the country’s efforts to further social and economic development. He said despite this, the nation possessed “all the necessary natural and strategic conditions to become a successful country and a regional powerhouse, capable of exerting a positive influence in the development of Southern Africa.” He added, “Therefore, bringing Zimbabwe back to the concert of nations is of critical importance.”
Past arrears clearance
Adesina said the African Development Bank, which has contributed over one million dollars to Zimbabwe’s Structured Dialogue Platform, was focusing on accountability, inclusive dialogue, and partnerships.
He said the African Development Bank, with the support of its shareholders, had twice in the recent past supported arrears clearance for Sudan and Somalia. While Zimbabwe’s case is different in context and history, the country could benefit from similar support if conditions were met. These include delivering on its commitments to implement wide-ranging reforms, including fiscal measures and democratic reforms.
Adesina warned that these measures would be tough and have a painful impact on Zimbabwe’s citizens. He urged development partners to support the process and “help Zimbabwe to be able to swallow the tough reforms.”
South African finance minister Enoch Godongwana, SADC and COMESA representatives affirmed their support for the process, noting the importance of Zimbabwe to the region.
“Zimbabwe is one of us. SADC is going to walk with Zimbabwe,” Elias Magosi, SADC Executive Secretary said.
Several representatives at the session said Zimbabwe’s upcoming elections in August would be an important test for the government’s commitment to reforms.
Adesina said: “It is time to put the past behind us; Zimbabwe desires a new and better and more prosperous future. I believe in Zimbabwe.”
Zimbabwe’s total consolidated debt stands at $17.5 billion. Debt owed to international creditors stands at $14.04 billion, while domestic debt stands at $3.4 billion. The country is in arrears for servicing its debt, with arrears to multilateral development banks, including the African Development Bank, the World Bank, and the European Investment Bank.
