Zimbabwe's debt stock hits US$21.5 billion

Published: 21 hours ago

Zimbabwe's total public debt has surged to US$21.5 billion as of March 2025, an increase of about US$1 billion from the same period last year. The growing debt burden continues to undermine the country's economic recovery prospects and limit access to international credit markets.

Presenting the 2025 Mid-Term Budget Review in Parliament on Thursday, Finance and Economic Development Minister Professor Mthuli Ncube revealed that the country's debt comprises both external and domestic components. He noted that external debt now stands at US$12.6 billion, while domestic debt has risen to US$8.9 billion. This has pushed the total debt-to-GDP ratio to 44 percent.

In local currency terms, Zimbabwe's Public and Publicly Guaranteed (PPG) debt reached ZiG576.5 billion by the end of March. Of this, ZiG337.7 billion is external debt and ZiG238.8 billion is domestic, representing 58.6 percent and 41.4 percent of the total debt stock respectively.

Ncube also reported that total arrears - accumulated debt payments that Zimbabwe has failed to make over the years - amounted to US$7.8 billion as of March 2025. These arrears represent 36 percent of the total debt and continue to weigh heavily on the country's ability to attract concessional financing. He pointed out that the persistent build-up of arrears since 2000 has worsened Zimbabwe's debt situation and limited its access to much-needed external development support.

In response, the government is continuing to implement its Arrears Clearance and Debt Resolution Roadmap. According to the minister, the roadmap is aimed at restoring debt sustainability and unlocking crucial external funding to support the country's development agenda.

Domestic debt servicing in the first half of 2025 cost the government ZiG1.64 billion, covering both principal and interest payments. During the same period, the Treasury paid US$176.28 million to service external debt. This included US$93.72 million toward the active debt portfolio, US$79.75 million for legacy debts, and US$2.81 million in token payments to international financial institutions and Paris Club bilateral creditors.

Meanwhile, local currency interest payments reached ZiG39.52 million, and the government paid ZiG1.60 billion in principal on Treasury Bills and bonds.

Zimbabwe's rising domestic borrowing has sparked concern among economists and financial analysts, who warn that it is crowding out the private sector by absorbing capital that could otherwise support business and investment. The mounting debt also raises questions about the country's fiscal discipline and the sustainability of current borrowing levels.

As Zimbabwe continues to grapple with its longstanding debt crisis, the coming months will be critical. The effectiveness of the government's debt resolution efforts and its ability to re-engage with international creditors could determine whether the country can escape its debt trap or spiral further into economic isolation.
- NewZimbabwe

Tags: Debt,