Trymore Tagwirei

Zimbabwe’s total public and publicly guaranteed debt climbed to US$23.4 billion by the end of September 2025, driven largely by a dramatic rise in domestic expenditure arrears, according to the latest Public Debt Report from the Ministry of Finance and Economic Development.

The report shows that total debt rose by 8.5 percent from US$21.5 billion in December 2024 to US$23.4 billion by September 2025.

External debt now stands at US$13.6 billion, accounting for 58.1 percent of the total, while domestic debt amounts to US$9.8 billion, or 41.9 percent.

Treasury attributes much of the rise in domestic debt to a sharp accumulation of unpaid obligations to service providers, which ballooned from US$34 million in December 2024 to US$1.3 billion by September 2025.

During the same period, domestic government debt increased from ZiG217.6 billion to ZiG261.1 billion, with arrears to service providers alone estimated at ZiG34.1 billion.

“The increase in the stock of public and publicly guaranteed debt is primarily attributed to the rise in domestic expenditure arrears,” Treasury noted.

Zimbabwe’s external debt arrears remain a significant barrier to economic recovery.

As of September 2025, arrears stood at US$7.7 billion, with 63.2 percent owed to bilateral creditors and the remaining 36.8 percent to multilateral institutions.

Of the US$6.4 billion owed to bilateral lenders, Paris Club creditors hold nearly two-thirds, with 98 percent of those obligations in arrears.

Non-Paris Club creditors, including China, hold about 35 percent of Zimbabwe’s bilateral debt.

Despite the arrears burden, Government made external debt service payments of US$220.25 million between January and September 2025 and expects to pay an additional US$86.6 million before year-end.

Looking ahead, Treasury projects debt service payments of ZiG20 billion in 2026—comprising ZiG11.5 billion in principal repayments and ZiG8.5 billion in interest.

Gross financing needs for the year are estimated at ZiG14.8 billion, leaving a net borrowing requirement of roughly ZiG3.2 billion.

Domestic borrowing will remain the main source of financing, with external funding limited to concessional loans.

To tackle the mounting debt crisis, Government is advancing its Arrears Clearance and Debt Resolution Roadmap, which includes securing an IMF Staff-Monitored Programme in early 2026, arranging bridge financing to clear arrears to international financial institutions, and pursuing long-term restructuring under the G20 Common Framework.

The plan also covers compensation for former farm owners under the Global Compensation Deed, with Treasury allocating US$10 million for disbursements in 2026.

Despite mounting fiscal pressures, Zimbabwe earned positive acknowledgement for improved transparency after the World Bank’s 2024 Debt Reporting Heatmap flagged no concerns in its debt disclosure practices—placing the country among a small number of African states meeting international reporting standards.

However, analysts warn that without meaningful restructuring and sustained policy discipline, rising debt pressures will continue to undermine economic growth and public service delivery, prolonging Zimbabwe’s financial recovery.