Online Reporter
Tapiwanashe Mangwiro
Senior Business Reporter
The Government has intensified efforts to place Zimbabwe’s public finances on a firmer footing in 2026, rolling out a raft of debt management reforms after the country’s public debt ended last year at a level that Treasury says remains manageable by international standards.
The reforms, which include reintroducing Treasury Bill auctions, lengthening the maturity profile of domestic debt, issuing more ZiG-denominated securities and pursuing innovative financing instruments, come as authorities seek to strengthen fiscal sustainability while advancing the country’s Arrears Clearance and Debt Resolution Roadmap.
According to the 2025 Annual Public Debt Bulletin, Zimbabwe’s total public and publicly guaranteed debt stood at US$21,8 billion at the end of December last year, equivalent to 37,4 percent of gross domestic product (GDP).
The debt stock increased by just 1,4 percent from the US$21,5 billion recorded in 2024, with Treasury attributing much of the increase to improved recognition of domestic expenditure arrears rather than to a surge in new borrowing.
The latest figures now provide the baseline for the Government’s debt management strategy in 2026, which is focused on lowering financing costs, reducing refinancing risks and rebuilding confidence among investors and development partners.
Treasury says improving debt transparency has become a key pillar of public financial management reforms, as Zimbabwe works towards restoring long-term debt sustainability.
Economic analyst Gladys Shumbambiri-Mutsopotsi said the emphasis should now shift from the size of the debt stock to the quality of debt management reforms being implemented.
“Debt, on its own, is not necessarily a problem. What matters is whether it remains sustainable, whether borrowed resources are channelled towards productive investments and whether the Government has the capacity to meet its obligations without compromising macroeconomic stability,” she said.
“The latest debt bulletin demonstrates a stronger commitment to transparency and better reporting of Government liabilities. These are important reforms because they improve policy credibility and provide investors with greater confidence in the country’s fiscal management.”
She said maintaining debt below internationally recognised sustainability thresholds, while implementing reforms under the arrears clearance programme, would strengthen Zimbabwe’s prospects of eventually regaining access to affordable international financing.
The bulletin indicates that external debt accounted for about 54 percent of the country’s total obligations, while domestic debt represented approximately 46 percent, reflecting a relatively balanced debt portfolio.
However, Treasury acknowledges that historical arrears remain the biggest obstacle to restoring full access to international capital markets.
The report estimates Zimbabwe’s total arrears at approximately US$10,3 billion, comprising external arrears of around US$8,1 billion and domestic arrears of approximately US$2,1 billion. Resolving these obligations remains central to the Government’s debt reform agenda.
Economic analyst Namatai Maeresera said Treasury’s latest debt strategy reflected a gradual transition from crisis management towards proactive debt management.
“The reforms announced are significant because they seek to improve the structure of public debt rather than simply reducing its size. Lengthening debt maturities, diversifying financing instruments and strengthening domestic capital markets all reduce refinancing risks over time,” he said.
He added that strengthening the domestic debt market would give the Government greater flexibility in financing development projects, while reducing reliance on costly short-term borrowing.
“A well-functioning domestic bond market provides the Government with predictable funding, while also creating investment opportunities for pension funds, insurance companies and other institutional investors.”
Treasury intends to broaden domestic financing through increased issuance of ZiG-denominated Treasury Bills and bonds, while gradually reducing exchange rate risks associated with foreign currency borrowing. Authorities also plan to revive competitive Treasury Bill auctions, expand the investor base and explore alternative financing mechanisms, including diaspora bonds, asset recycling and public-private partnerships for infrastructure development.
The reforms form part of wider efforts to improve debt management capacity and align borrowing with the country’s medium-term fiscal objectives.
The Government is also continuing to engage bilateral and multilateral creditors through the Arrears Clearance and Debt Resolution Process, which seeks to normalise relations with international financial institutions and eventually restore access to concessional financing. The roadmap envisages implementing agreed economic reforms, mobilising bridge financing to clear arrears with international financial institutions and negotiating debt treatment with external creditors.
Economists say progress on these reforms could significantly lower the cost of future borrowing, while improving investor confidence and creating greater fiscal space for productive expenditure.
Ms Shumbambiri-Mutsopotsi said sustained fiscal discipline would ultimately determine the success of the Government’s debt strategy.
“The reforms being implemented today must be accompanied by continued budget discipline, efficient public spending and strong economic growth. These elements reinforce each other and are essential if Zimbabwe is to place public debt on a durable and sustainable path,” she said.
With the latest debt bulletin providing greater transparency on the country’s obligations, and Treasury pressing ahead with reforms aimed at improving debt management, attention will now turn to how effectively the measures are implemented during 2026 and whether they translate into improved confidence among creditors, investors and the broader economy.
