Harare – Zimbabwe’s prolonged debt crisis — spanning more than two decades — cannot be resolved without the intervention of major global powers, according to World Bank President Ajay Banga, who says the southern African nation must stop trying to go it alone and instead actively engage the Group of 20 (G-20) for a coordinated debt relief solution.
Speaking to Bloomberg, Banga said Zimbabwe’s best opportunity to exit its 25-year-long debt default lies in building consensus among global creditors and policy makers, particularly within the G-20 framework, which plays a leading role in steering multilateral responses to sovereign debt distress.
“They need to work with the G-20,” Banga told Bloomberg. “Trying to solve this by themselves is not going to work.”
Zimbabwe defaulted on its external debt in the early 2000s following land reform policies that triggered economic collapse, hyperinflation, and strained relations with Western creditors. Over the years, ballooning arrears to international lenders — including the World Bank, IMF, and African Development Bank — have effectively shut Zimbabwe out of concessional financing, further worsening economic challenges.
Despite efforts to re-engage through a structured arrears clearance and debt resolution plan spearheaded by Finance Minister Mthuli Ncube, progress has stalled amid political concerns over governance, transparency, and reforms.
The World Bank’s intervention underscores mounting international pressure on Zimbabwe to adopt a more inclusive and multilateral approach.
Analysts say meaningful debt relief can only occur through structured frameworks such as the G-20 Common Framework for Debt Treatments, launched in 2020 to assist heavily indebted developing countries.
According to Banga, any long-term solution would require not only G-20 coordination but also clear commitments from Zimbabwe on governance, fiscal discipline, and accountability — key areas of concern among lenders and donors.
Zimbabwe’s total external debt is estimated at over US$18 billion, with arrears accounting for the bulk. The country’s inability to access international capital markets has left it reliant on domestic borrowing and natural resource-backed loans, further deepening its financial vulnerabilities.
While Harare continues to pitch itself as open for business, with President Emmerson Mnangagwa’s government courting investors in mining, energy, and agriculture, the unresolved debt burden remains a major obstacle to full economic recovery.
Economic analysts warn that without a breakthrough on debt relief, Zimbabwe risks falling further behind regional peers that are attracting international capital through transparent and predictable financial governance.
Efforts to initiate dialogue with the G-20 may also require regional support from the African Union and the Southern African Development Community (SADC), whose backing could strengthen Zimbabwe’s case on the global stage.
Bloomberg reports that while Banga’s remarks signal international willingness to engage, the burden now lies with Zimbabwe’s leadership to take bold steps towards restoring credibility and embracing multilateral solutions.
Source: Thezimbabwemail
