## EXECUTIVE SUMMARY

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### Context and recent policy shifts
- Zimbabwe has been in debt default and excluded from international capital markets and most official financing for over 25 years, with multiple episodes of very high inflation and economic downturns.
- Recent stability drivers:
  - Cessation of monetary financing and a tightened monetary stance by the Reserve Bank of Zimbabwe (RBZ) sharply reduced inflation.
  - Favorable external conditions: multi-year-high gold prices and a rebound in agriculture following a severe drought.
- Preconditions for transition to a “mono-currency” system stated in the National Development Strategy II (NDS2):
  - low and stable single-digit inflation;
  - FX reserves of 3-6 months of imports cover;
  - FX market functioning without segmentation;
  - stable exchange rate with minimum over/undervaluation;
  - increased demand for local currency;
  - efficient and secure payment system;
  - cohesive fiscal and monetary policies;
  - USD-assets and foreign currency bank deposits would be preserved in such transition.

### SMP request, objectives, and program design
- Authorities requested a 10-month Staff‑Monitored Program (SMP) to consolidate stabilization gains and lay foundations for reforms.
- Program focus areas:
  - Execute the 2026 budget prudently with enhanced public financial management (PFM) controls and containment of wage-bill pressures.
  - Strengthen social protection.
  - Sustain monetary discipline and consolidate FX market equilibrium.
  - Lay foundations for further liberalizing the FX market and improving the monetary policy framework.
  - Strengthen governance measures to enhance transparency, manage fiscal risks, and address corruption vulnerabilities.
- Program features:
  - Start in March with three review test dates (end-Mar. 2026, end-Jun. 2026, end‑Sep. 2026).
  - Monitoring through quantitative targets, indicative targets, and structural benchmarks defined in the TMU.
  - Continuous commitments monitored under the SMP are specified in the TMU.
- Staff supports the SMP request and considers it a step toward re‑engagement, arrears clearance, and debt resolution.

### Recent economic developments and macro performance
- Growth and external sector:
  - Growth strengthened in 2025Q3 with robust activity across sectors, particularly agriculture and mining amid high gold and recovering platinum and lithium prices.
  - Current account surplus reached 4 percent of GDP in 2025.
- Inflation and exchange rate:
  - ZiG Y‑o‑Y CPI inflation fell to 4 percent in January, from around 90 percent mid-2025 and over 600 percent a year earlier.
  - RBZ policy rate remained at 35 percent.
  - Parallel market premium narrowed from around 30 mid-2025 to below 20 percent since end-2025.
  - Foreign exchange reserves reached 1 month of import cover, up from about half a month at end-2024.
  - External position in 2025 assessed as moderately weaker than the level implied by medium-term fundamentals and desirable policies.
- Monetary operations:
  - Local currency monetary base dynamics slowed markedly in H2 2025 via zero-interest NNCDs.
  - Monetary financing stopped; positive net financing from RBZ in 2025 reflects use of government deposits to recapitalize RBZ.
- Fiscal developments (staff estimates, commitment basis):
  - Overall fiscal deficit: -0.7 percent in 2024 to 0.0 percent (balance) in 2025.
  - Primary balance: 0.7 percent of GDP in 2025.
  - Revenue-to-GDP: about 13 percent in 2024 to 15.5 percent in 2025.
    - Mining revenues: 3.9 percent of GDP in 2025, up from 2.7 percent in 2024.
  - Total spending: 13.6 percent of GDP in 2024 to 15.6 percent in 2025.
  - Preliminary figures indicate budget repaid about US$350 million of past arrears in 2025; staff estimate net expenditure arrears at zero in 2025.
- Banking sector:
  - Total capital adequacy reported at 28 percent (regulatory minimum 12 percent).
  - NPL ratio: 3.5 percent through December; watch‑listed loans: 26 percent.
  - Banks hold 11 percent of assets in government securities.
  - Banks’ nominal returns on assets dropped sharply in 2025.

### Outlook and baseline projections (selected)
- Real GDP growth (staff estimates/projections):
  - 2025: 7.5 percent
  - 2026: 5 percent
  - Medium-term growth: 4.2 percent (2027–2031)
- Inflation (end year):
  - 2025: 15.0
  - 2026: 9.0
  - 2027–2031: 8.0
- Current account balance:
  - 2025: 4.0 percent of GDP
  - 2026: 3.7 percent of GDP
- Selected series from Text Table 1 (as presented):
  - Real GDP growth: 5.3 (2023), 1.7 (2024), 7.5 (2025), 5.0 (2026), 4.2 (2027–2031).
  - Inflation (end year): 778.8 (2023), 68.8 (2024), 15.0 (2025), 9.0 (2026), 8.0 (2027–2031).
  - Current account balance: 0.3 (2023), 1.1 (2024), 4.0 (2025), 3.7 (2026), 3.5 (2027), 3.0 (2028), 2.6 (2029), 2.1 (2030), 1.5 (2031).
  - Primary Balance: -9.2 (2023), 0.2 (2024), 0.7 (2025), 0.6 (2026), 0.5 (2027–2031).
  - Overall fiscal balance: -9.5 (2023), -0.7 (2024), 0.1 (2025), -0.8 (2026), -0.9 (2027–2031).
  - Reserves (months to imports): 0.1 (2023), 0.5 (2024), 1.2 (2025), 1.3 (2026), 1.7 (2027), 2.1 (2028), 2.4 (2029), 2.7 (2030), 3.0 (2031).
- Baseline assumptions and fiscal path:
  - Monetary conditions remain tight.
  - Program targets reserve increase from 1.2 to 1.3 months of imports in 2026.
  - Revenue-to-GDP expected to increase by about ½ percentage point to 16 percent of GDP in 2026 and gradually to 17 percent in the medium term.
  - Primary balance surplus around ½ percent of GDP throughout forecast horizon.
  - No financing gap in 2026 under baseline; financing gaps of 1½-2 percent of GDP emerge in 2027+ as partial moratorium on domestic debt payments ends and arrears repayment progresses.
  - Past expenditure arrears estimated at 3.2 percent of GDP or US$1.7 billion to be fully cleared by 2025 via gradual repayments (about ½ percent of GDP per year thereafter).

### Box 1 — Macroeconomic implications of a gold price correction (scenario)
- Exposure:
  - Gold accounts for: around 40 percent of exports; 10 percent of GVA; around 5 percent of formal employment; an estimated 5 percent of fiscal revenues (accounting for spillovers).
- Downside scenario simulated:
  - Gold prices decline by 25 percent relative to the 2026 baseline.
- Estimated deviations from baseline:
  - Exchange rate: moderate response due to high dollarization.
  - Output: drop in GDP growth of about 1.5 pp.
  - Fiscal: increase in government overall deficit of about 0.4 percent of GDP.
  - External: current account deterioration of 2 percent of GDP.
  - Financial sector: model does not estimate the impact; banks’ limited exposures to mining suggest modest effect.

### Debt sustainability and financing
- 2025 Article IV DSA characterizes external and overall public debt as unsustainable and in distress.
- Authorities plan to seek debt restructuring; fiscal path to be revisited during restructuring.

### Risks and scenarios; contingency
- Upside risks:
  - Stronger-than-expected growth momentum could ease fiscal pressures.
  - Program spillovers, arrears resolution, debt restructuring, and regained access to external financing could boost growth.
- Downside risks:
  - Sharp gold price correction.
  - Impact of the conflict in the Middle East (trade disruptions, higher fuel/input prices).
  - Adverse weather shocks.
  - Policy slippages or slow reform progress.
- Contingency:
  - Adverse shocks beyond WEO assumptions would require fiscal adjustment and external assistance given limited external financing access and high dollarization.

### Banking and financial sector vulnerabilities and reforms
- Soundness indicators (selected):
  - Regulatory capital to risk-weighted assets: Dec‑2025: 27.7.
  - Nonperforming loans (> 90 days): Dec‑2025: 3.5.
  - Past‑due loans to gross loans: Dec‑2025: 29.7.
  - Liquid assets/total assets (Dec sequence): 35.2 (Dec‑2025).
  - Return on assets (Dec sequence): 5.9 (Dec‑2025).
  - Return on equity (Dec sequence): 20.5 (Dec‑2025).
- Vulnerabilities:
  - Banks hold 11 percent of assets in government securities and face sovereign credit risk and payment delays.
  - Nominal returns on assets dropped sharply in 2025 due to reduced valuation gains from FX assets and investment properties.
- Policy actions to maintain stability:
  - Strengthen financial stability framework guided by the 2018 FSSR.
  - Adopt Basel III standards (Liquidity Coverage Ratio adopted; NSFR and capital rules being finalized).
  - Improve corporate governance, cybersecurity, payment system oversight, macroprudential, and crisis management frameworks.
  - Prioritize implementation of Basel III capital standards; consider dedicated financial stability and resolution units.
  - Started Asset Quality Thematic Reviews (AQRs) and corrective actions.

### Governance, Mutapa transparency, and fiscal risk management
- Mutapa Investment Fund:
  - Published first audited annual financial statement in 2025.
  - Will publish audited IFRS-consistent financial statements for subsidiaries except those under Corporate Rescue Proceedings or Administration.
  - Mutapa and subsidiaries to refrain from contracting, guaranteeing, or assuming borrowing without prior written approval of the Ministry of Finance (continuous commitment).
  - MoFED&IP to produce an extended Fiscal Risks Statement quantifying fiscal risks from SOEs and publish contingent liabilities/borrowings.
- Broader governance reforms:
  - NDS2 targets full technical compliance with FATF recommendations and strengthened AML/CFT frameworks.
  - Authorities to prepare and publish a comprehensive anti‑corruption strategy with a policy matrix (end‑September SB).

### Fiscal policy, PFM, and revenue measures (selected operational details)
- 2026 budget execution central: full-year conservative revenue envelope for first-half 2026: US$9.0 billion.
- Total expenditure limit for first half of 2026: US$4.2 billion.
- Domestic arrears strategy:
  - Current expenditure arrears: US$1.7 billion as of December 31, 2024 (pending validation).
  - US$304.5 million allocated in the 2026 National Budget toward expenditure arrears clearance.
  - Clearance envisaged over five years through budget allocations.
  - Terms of Reference adopted for Auditor‑General Office to audit expenditure arrears for end‑2024 and end‑2025.
- Cash management and PFMS:
  - Revised circular clarifying Cash Management Committee mandates; CMC re‑established and met on February 02 and 09, 2026.
  - Operationalize US dollar payment functionality in PFMS; require Funds Reservations for all expenditures and earmarking for multi‑year projects.
- Public wage bill management:
  - Employment costs targeted not to exceed 50 percent of total revenue collections.
  - Measures: align salary adjustments with revenue, Job Evaluation Exercise recommendations, staffing rationalization, recruitment freeze except critical sectors, payroll audits, digitization, and elimination of ghost workers.
  - MOFED&IP to develop medium‑term staffing plan to bring employment cost-to-revenue ratio below 50 percent and wage bill-to-GDP toward 8.4 percent over medium run.
- Protection of social and priority spending:
  - Maintain budgeted level for social programs: US$592 million.
  - Programs anchored on Zimbabwe Social Registry; adopt and publish user manual for ZISO.

### FX market, monetary policy framework, and RBZ institutional reform
- Achievements:
  - Progress stabilizing FX market and reducing parallel premium.
  - RBZ and MOFED&IP consolidated FX regulations; banks free to determine exchange rates in interbank and client transactions.
  - MOFED&IP repealed Statutory Instrument 81A.
  - August 2025 Monetary Policy Statement: hybrid framework—price stability primary objective; nominal exchange rate intermediate target; reserve money operational target.
  - RBZ developing new FX trading platform with World Bank technical assistance.
- Forward actions and constraints:
  - Publish reference exchange rate series (weighted average of transactions) and provide IMF staff timely information on parallel premium and FX demand backlog.
  - Develop comprehensive FX liberalization strategy (end‑September 2026) with IMF TA to promote demand for ZiG, improve monetary operations, and design FX intervention strategy.
  - Refrain from further increases in surrender requirement until FX liberalization strategy adopted; temporary increases could be time‑bound in response to capital outflows.
  - Update RBZ Act to reinforce autonomy and clarify mandate; RBZ will not extend credit to government under revised framework.
  - Plan to request a Safeguards Assessment of the RBZ in Q3 of the SMP year.

### Quantitative targets, indicative targets, and structural benchmarks (selected)
- Quantitative targets (examples):
  - Floor on primary budget balance (US$ million): 47 136; 200; 271.
  - Ceiling on changes in credit to nonfinancial public sector from RBZ (US$ million): 0 0; 0 0.
  - Floor on changes in net official international reserves (US$ million): 74 195; 291 356.
  - Ceiling on changes in ZiG monetary base of the RBZ (ZiG million): 602 830; 830 830.
- Indicative targets (examples):
  - Floor on central government total revenue collection (US$ million): 1,975; 4,132; 6,385 9,000.
  - Ceiling on accumulation new (net) domestic expenditure arrears (US$ million): 0; 0; 0; 0.
  - Ceiling on central government employment costs (US$ million): 840; 2,143; 3,446 4,976.
  - Floor on protected social and priority spending (US$ million): 190 414; 603 755.
- Structural benchmarks (selected and target dates):
  - RBZ to start publishing reference exchange rate series and develop comprehensive FX liberalization strategy. End‑September 2026.
  - ZISO user manual adoption and publication. End‑June 2026.
  - Improve taxpayer register quality monitoring. End‑March 2026.
  - Operationalize US dollar payment functionality in PFMS; full earmarking. End‑September 2026.
  - TSA reform strategy development. End‑June 2026.
  - Mutapa: refrain from unapproved borrowing; publish audited IFRS-consistent financial statements for subsidiaries. End‑September 2026.
  - Prepare and publish anti‑corruption strategy with policy matrix. End‑September 2026.

### Staff appraisal, priorities, and policy imperatives
- Staff view Zimbabwe as well‑positioned to build on stabilization gains to support arrears clearance and debt resolution, but risks are material and concentrated.
- Key policy imperatives:
  - Maintain revenue efforts and strengthen expenditure controls to meet targeted primary surplus (program anchor).
  - Complete PFM reforms to expand coverage to U.S. dollar transactions and advance TSA to prevent new arrears and improve commitment controls.
  - Strengthen control over public employment costs.
  - Validate arrears credibly, prioritize repayments transparently, and implement rules‑based repayment path consistent with financing constraints; avoid new arrears via tighter controls and realistic budgeting.
  - Preserve monetary discipline: cessation of monetary financing, tight liquidity management, and address legacy balance‑sheet swings.
  - Continue FX market reforms to deepen price discovery and reduce segmentation while managing confidence in local currency in a highly dollarized environment.
  - Strengthen governance and fiscal risk management: deepen transparency at Mutapa, maintain safeguards against unapproved borrowing, expand fiscal risk disclosures, and publish anti‑corruption strategy with time‑bound action matrix.

*Source: IMF Executive Summary (March 30, 2026).*

### EXECUTIVE SUMMARY

### EXECUTIVE SUMMARY

### Context and recent policy shifts
- Zimbabwe has been in debt default and excluded from international capital markets and most official financing for over 25 years, with multiple episodes of very high inflation and economic downturns.
- Recent policy changes and favorable external conditions have brought stability:
  - Cessation of monetary financing and a tightened monetary stance by the Reserve Bank of Zimbabwe (RBZ) have sharply reduced inflation.
  - Favorable external conditions include multi-year-high gold prices and a rebound in agriculture following a severe drought.
- The National Development Strategy II (NDS2) states that transition to a “mono-currency” system is conditional on: low and stable single-digit inflation, FX reserves of 3-6 months of imports cover, FX market functioning without segmentation, stable exchange rate with minimum over/undervaluation, increased demand for local currency, efficient and secure payment system, and cohesive fiscal and monetary policies; USD-assets and foreign currency bank deposits would be preserved in such transition.

### SMP request and objectives
- The authorities requested a 10-month Staff-Monitored Program (SMP) to consolidate stabilization gains and build foundations for broader reforms.
- Program focus areas:
  - Execute the 2026 budget prudently with enhanced public financial management (PFM) controls and containment of wage-bill pressures.
  - Strengthen social protection.
  - Sustain monetary discipline and consolidate progress in restoring FX market equilibrium.
  - Lay foundations for further liberalizing the FX market and improving the monetary policy framework.
  - Strengthen governance measures to enhance transparency, manage fiscal risks, and address corruption vulnerabilities.
- The SMP request is part of the authorities’ broader strategy to re-engage with the international community to achieve arrears clearance and debt resolution.
- IMF staff supports the authorities’ SMP request.

### Recent economic developments and macro performance
- Growth and external sector:
  - Growth strengthened in 2025Q3 with robust activity across sectors, particularly agriculture (rebound from the 2024 drought) and mining amid multi-year-high gold and recovering platinum and lithium prices.
  - Current account surplus reached 4 percent of GDP in 2025.
- Inflation and exchange rate:
  - ZiG Y-o-Y CPI inflation fell to 4 percent in January, from around 90 percent mid-2025 and over 600 percent a year earlier.
  - The RBZ policy rate remained at 35 percent.
  - Parallel market premium narrowed from around 30 mid-2025 to below 20 percent since end-2025.
  - Foreign exchange reserves reached 1 month of import cover, up from about half a month at end-2024.
  - External position in 2025 assessed as moderately weaker than the level implied by medium-term fundamentals and desirable policies (see Annex II).
- Monetary operations:
  - Local currency monetary base dynamics slowed markedly in the second half of 2025 as liquidity was more strictly controlled through zero-interest Non-Negotiable Certificates of Deposit (NNCDs).
  - Monetary financing has stopped; the positive net financing from the RBZ in 2025 reflects use of government deposits to recapitalize the RBZ.
- Fiscal developments (staff estimates, commitment basis):
  - Overall fiscal deficit shrank from -0.7 percent in 2024 to 0.0 percent (balance) in 2025.
  - Primary balance improved to 0.7 percent of GDP in 2025.
  - Revenue-to-GDP ratio rose from about 13 percent in 2024 to 15.5 percent in 2025.
    - Mining revenues reached 3.9 percent of GDP in 2025, up from 2.7 percent in 2024.
  - Total spending increased from 13.6 percent of GDP in 2024 to 15.6 percent in 2025.
  - Preliminary figures indicate the budget repaid about US$350 million of past arrears in 2025; staff conservatively estimate net expenditure arrears at zero in 2025.
- Banking sector:
  - Total capital adequacy reported at 28 percent (regulatory minimum 12 percent).
  - Nonperforming loan (NPL) ratio at 3.5 percent through December; watch-listed loans at 26 percent.
  - Banks hold 11 percent of assets in government securities.
  - Banks’ nominal returns on assets dropped sharply in 2025.

### Outlook and baseline projections
- Near- and medium-term growth and inflation projections (staff estimates and projections):
  - Real GDP growth: 7.5 percent (2025) and 5 percent (2026); medium-term growth at 4.2 percent.
  - Inflation (end year): 15.0 (2025), 9.0 (2026), and 8.0 (2027–2031) as presented in Text Table 1.
  - Current account balance: 4.0 (2025) and 3.7 (2026) percent of GDP.
- Text Table 1 (selected series from source):
  - Real GDP growth: 5.3 (2023), 1.7 (2024), 7.5 (2025), 5.0 (2026), 4.2 (2027–2031).
  - Inflation (end year): 778.8 (2023), 68.8 (2024), 15.0 (2025), 9.0 (2026), 8.0 (2027–2031).
  - Current account balance: 0.3 (2023), 1.1 (2024), 4.0 (2025), 3.7 (2026), 3.5 (2027), 3.0 (2028), 2.6 (2029), 2.1 (2030), 1.5 (2031).
  - Primary Balance: -9.2 (2023), 0.2 (2024), 0.7 (2025), 0.6 (2026), 0.5 (2027–2031).
  - Overall fiscal balance: -9.5 (2023), -0.7 (2024), 0.1 (2025), -0.8 (2026), -0.9 (2027–2031).
  - Financing gap: 0.5 (2023), 2.0 (2024), 0.1 (2025), 0.0 (2026), 2.0 (2027), 1.8 (2028), 1.6 (2029), 1.9 (2030), 0.8 (2031).
  - Reserves (months to imports): 0.1 (2023), 0.5 (2024), 1.2 (2025), 1.3 (2026), 1.7 (2027), 2.1 (2028), 2.4 (2029), 2.7 (2030), 3.0 (2031).
- Fiscal projections (Text Table 2, selected lines, percent of GDP):
  - Revenue: 15.5 (2025), 16.9 (2026), 16.0 (2027–2029), 16.4 (2030), 16.6 (2031), rising to 17.0 by end horizon.
  - Expenditure: 15.5 (2025), 17.1 (2026), 16.7 (2027), 17.0 (2028), 17.3 (2029), 17.5 (2030), 17.7 (2031), 17.9 (2031 row also present).
  - Fiscal balance: 0.1 (2025), -0.2 (2026), -0.8 (2027), -0.9 (2028–2031).
  - Primary balance: 0.7 (2025), 0.3 (2026), 0.6 (2027), 0.5 (2028–2031).
  - Identified financing and financing gap series are provided in the source tables.
- Baseline assumptions:
  - Monetary conditions remain tight to contain FX pressures and inflation.
  - Program targets reserve increase from 1.2 to 1.3 months of imports in 2026, with further increases in the medium term.
  - Revenue-to-GDP ratio expected to increase by about ½ percentage point to 16 percent of GDP in 2026 and gradually to 17 percent in the medium term.
  - Primary balance surplus around ½ percent of GDP throughout the forecast horizon.
  - No financing gap in 2026 under the baseline; financing gaps of 1½-2 percent of GDP emerge in 2027 and beyond as the partial moratorium on domestic debt payments ends and arrears repayment progresses.
  - Past expenditure arrears estimated at 3.2 percent of GDP or US$1.7 billion to be fully cleared by 2025 via gradual repayments (about ½ percent of GDP per year thereafter).

### Debt sustainability and finance
- The 2025 Article IV Debt Sustainability Analysis (DSA) characterizes external and overall public debt as unsustainable and in distress.
- Authorities plan to seek debt restructuring; fiscal path will be revisited at that time.

### Risks and scenarios
- Upside risks:
  - Stronger-than-expected growth momentum could ease fiscal pressures.
  - Program spillovers, resolution of external arrears, debt restructuring, and regained access to external financing could significantly boost growth.
- Downside risks:
  - A sharp gold price correction (see Box 1 in the source).
  - Impact of the conflict in the Middle East including trade disruptions and higher fuel/input prices.
  - Adverse weather shocks.
  - Policy slippages or slow reform progress.
- Contingency:
  - Given limited access to external financing and high dollarization, materialization of adverse shocks beyond current WEO assumptions would require a combination of fiscal adjustment and external assistance.

### Banking and financial sector vulnerabilities
- Sector resilience:
  - Capital adequacy at 28 percent; NPL ratio 3.5 percent.
  - Watch-listed loans at 26 percent.
  - RBZ completed three Asset Quality Thematic Reviews and is finalizing corrective actions.
- Vulnerabilities:
  - Banks hold 11 percent of assets in government securities and are exposed to sovereign credit risk and payment delays.
  - Nominal returns on assets dropped sharply in 2025 due to reduced valuation gains from FX assets and investment properties.

### Program priorities and policy directions
- Fiscal: restore fiscal discipline through prudent 2026 budget execution, enhanced cash and expenditure controls, contain wage-bill pressures, and strengthen social protection.
- Monetary and FX: sustain tight monetary policy, consolidate FX market equilibrium, lay foundations for liberalization of the FX market, and strengthen the monetary policy framework.
- Governance: strengthen transparency, manage fiscal risks, and address corruption vulnerabilities.
- Debt strategy: pursue arrears clearance and debt resolution as part of re-engagement with the international community.

*Source: IMF Executive Summary (March 30, 2026).*

### Box 1. Macroeconomic Implications of a Gold Price Correction

### Box 1. Macroeconomic Implications of a Gold Price Correction

### Context and exposure
- Gold prices reached their all-time high in early 2026 and are expected to remain elevated in the program baseline.
- Gold accounts for:
  - around 40 percent of exports;
  - 10 percent of GVA;
  - around 5 percent of formal employment (and a large share of informal employment);
  - an estimated 5 percent of fiscal revenues (accounting for spillovers to other sectors).
- Staff note that a potential large price reversal could have large economic implications for Zimbabwe.

### Scenario and methodology
- Staff estimate the impact of lower gold prices using an augmented version of a semi-structural comprehensive adaptive expectations model calibrated to Zimbabwe.
- Downside scenario simulated: gold prices decline by 25 percent relative to the 2026 baseline (which would still keep prices above the 2025 levels).

### Estimated macroeconomic impacts (deviations from baseline)
- Exchange rate: moderate exchange rate response—in line with the high degree of dollarization—limiting its shock absorption role.
- Output: drop in GDP growth of about 1.5 pp, driven by lower exports, investment, and consumption.
- Fiscal: increase in the government overall deficit of about 0.4 percent of GDP due to lower mining sector tax revenues and lower growth.
- External: a current account deterioration of 2 percent of GDP.
- Financial sector: the model does not estimate the financial sector impact of such a scenario, but banks’ limited exposures to the mining sector suggest it would be modest.

*Source: Box 1. Macroeconomic Implications of a Gold Price Correction.*

### 28.      The SMP will support the authorities’ efforts to enhance governance and fiscal risk

### The SMP will support the authorities’ efforts to enhance governance and fiscal risk management from Mutapa Investment Fund’s (Mutapa) operations

### Governance and fiscal-risk strengthening for Mutapa
- Mutapa published its first audited annual financial statement in 2025.
- Mutapa will publish audited IFRS-consistent financial statements for all its subsidiaries except those under Corporate Rescue Proceedings or Administration (end-September SB, MEFP ¶22).
- Mutapa and all its subsidiaries (excluding those under Corporate Rescue Proceedings or Administration) will continue refraining from contracting, guaranteeing, or otherwise assuming any borrowing or debt-like obligation without the prior written approval of the Ministry of Finance, Economic Development and Investment Promotion (continuous SB, MEFP ¶22).
- The authorities will produce, in consultation with Fund staff, an extended Fiscal Risks Statement for the budget documentation that quantifies and discloses the fiscal risks stemming from the financial performance of state-owned enterprises.

### Broader governance reforms
- The authorities’ NDS2 targets full technical compliance with the Financial Action Task Force (FATF) recommendations and strengthening of AML/CFT frameworks.
- In line with NDS2 and the IMF’s 2020 Governance and Corruption Assessment, the authorities will prepare, in consultation with Fund staff, and publish a comprehensive anti-corruption strategy, accompanied by a policy matrix that sets out clear responsibilities, timelines, and measurable actions (end-September SB, MEFP ¶31).

### Program design, duration, and monitoring
- The authorities have requested a 10-month staff-monitored program. The program will start in March, with three review test dates (Text Table 4).
- The authorities completed all four prior actions (MEFP Table 1).
- Program performance will be monitored through quarterly program reviews and assessed against:
  - Quantitative targets, indicative targets, and structural benchmarks set out in MEFP Tables 2–3 and defined in the attached Technical Memorandum of Understanding (TMU).
  - Continuous commitments monitored under the SMP are specified in the TMU.

### Quantitative and indicative targets
- Quantitative and indicative targets (MEFP, Table 2):
  - Quarterly quantitative targets on: net international reserves; new central bank credit to the nonfinancial public sector; primary fiscal balance; and changes to local currency monetary base.
  - Continuous quantitative target covering contracting and guaranteeing of new external non-concessional borrowing.
  - Indicative targets setting a floor on central government revenue collection and social spending, and ceilings on the accumulation of new domestic expenditure arrears, central government employment costs, and changes in domestic debt.

### Structural benchmarks
- Structural benchmarks (MEFP Table 3): ten structural benchmarks aiming to:
  - Support the 2026 budget revenue target.
  - Contain fiscal pressures from expenditure arrears.
  - Enhance public financial management (PFM).
  - Contain wage bill pressures and improve social protection.
  - Improve FX market efficiency and liberalization.
  - Strengthen governance to address vulnerabilities, enhance transparency, and manage fiscal risks.

### Capacity development and technical assistance
- The SMP will be supported by IMF Capacity Development (CD); Zimbabwe is one of the largest beneficiaries of IMF CD programs.
- Authorities have already received capacity development support related to agreed structural benchmarks on:
  - Tax administration (SB#4).
  - Public financial management system (SB#5).
  - Wage bill (SB#6).
- World Bank technical assistance on the Social Protection system (SB#3) is ongoing.
- Authorities requested IMF technical assistance on FAD’s state-owned enterprise health check toolkit to reinforce fiscal risks monitoring (SB#8 and SB#9).
- Following the 2019 IMF Governance and Anti-Corruption Assessment for Zimbabwe, Fund staff remain ready to provide additional technical assistance as the authorities prepare their anti-corruption strategy and policy matrix (SB#10).

### Staff appraisal, outlook, and risks
- Staff view Zimbabwe as well-positioned to build on recent stabilization gains and establish a credible track record to support progress on arrears clearance and debt resolution.
- Recent tighter policies—supported by favorable external conditions—have helped bring down inflation sharply while growth and the external position strengthened, though assessed as moderately weaker than levels implied by medium-term fundamentals and desirable policies.
- The program appropriately prioritizes near-term macro stability and core institutions, with focus on:
  - Prudent 2026 budget execution.
  - Stronger public financial management controls.
  - Sustaining monetary discipline and improving FX market functioning.
  - Developing a comprehensive FX market liberalization strategy.
  - Governance reforms to enhance transparency and manage fiscal risks, and address corruption vulnerabilities.
- Near-term outlook: favorable but with material and highly concentrated risks. Drivers and downside risks include:
  - Support: elevated growth momentum and current account surplus supported by mining activity amid high gold prices and a recovery in agriculture following drought.
  - Downside risks: a sharp gold price correction; higher fuel and input prices and trade disruptions due to the conflict in the Middle East; adverse weather shocks; and policy slippages.
- Key policy imperatives highlighted by staff:
  - Maintain revenue efforts and strengthen expenditure controls to meet the targeted primary surplus (the program’s anchor), aligned with available non-inflationary financing.
  - Complete reforms to expand the public financial management system to cover U.S. dollar transactions and advance the Treasury Single Account strategy to prevent new arrears and improve commitment controls.
  - Strengthen control over public employment costs.
  - Validate arrears credibly, prioritize repayments transparently, and implement a rules-based repayment path consistent with financing constraints; avoid new arrears through tighter controls and realistic budgeting.
  - Preserve monetary discipline by maintaining cessation of monetary financing of fiscal deficits and continuing tight liquidity management, while addressing legacy balance-sheet swings and past quasi-fiscal operations.
  - Continue FX market reforms to deepen price discovery and reduce segmentation, while carefully managing confidence in the local currency and recognizing hysteresis in local currency demand in a highly dollarized environment.
  - Strengthen governance and fiscal risk management (deepen transparency at Mutapa, maintain safeguards against unapproved borrowing, expand fiscal risk disclosures, and publish a comprehensive anti-corruption strategy with a time-bound action matrix) to support re-engagement on debt resolution.

### Planned reviews (tentative)
- Review — Test date / Target — Review based on:
  - End-Mar. 2026 — Mar. 2026 test — First Jul-26
  - End-Jun. 2026 — Jun. 2026 test — Second Oct-26
  - End-Sep. 2026 — Sep. 2026 test — Third Jan-27

*Source: 1zweea2026001-source-pdf.*

### 41.      Staff supports the authorities’ request for a Staff-Monitored Program and considers it

### 41.      Staff supports the authorities’ request for a Staff‑Monitored Program and considers it an important step toward restoring debt sustainability and unlocking external financing over time.

### IMF staff assessment and program support
- Staff supports the authorities’ request for a Staff‑Monitored Program as an important step toward restoring debt sustainability and unlocking external financing over time.
- Strong and consistent implementation—supported by targeted capacity development—will be essential to translate the current window of macro stability into durable reforms and a credible basis for arrears clearance and eventual debt treatment discussions.

### Macroeconomic outlook and key projections (selected indicators)
- Real GDP growth (at constant 2019 prices):
  - 2023: 5.3
  - 2024: 1.7
  - 2025: 7.5
  - 2026–2031: 5.0; 4.2; 4.2; 4.2; 4.2; 4.2
- Nominal GDP (US$ millions):
  - 2023: 44,447
  - 2024: 45,719
  - 2025: 53,474
  - 2026–2031: 56,713; 57,406; 59,827; 62,350; 64,994; 67,762
- GDP deflator (index/percent):
  - 2023: 768.6
  - 2024: 1097.2
  - 2025: 61.5 (note: table formatting)
  - 2026–2031: 13.3; 8.0; 8.0; 8.0; 8.0; 8.0
- CPI (annual average):
  - 2023: 667.4
  - 2024: 736.1
  - 2025: 81.4
  - 2026–2031: 8.0 (each year)
- CPI (end-of-period):
  - 2023: 778.8
  - 2024: 686.8
  - 2025: 15.0
  - 2026–2031: 9.0; 8.0; 8.0; 8.0; 8.0; 8.0

### Monetary and credit aggregates (selected)
- Money supply (M2) annual percentage change:
  - 2023: 712.9
  - 2024: 930.8
  - 2025: 37.6
  - 2026–2031: 27.8; 26.0; 23.7; 21.6; 20.7; 19.5
- Money Base (annual percentage change):
  - 2023: 1,842.7
  - 2024: 2,421.3
  - 2025: 44.2
  - 2026–2031: 27.9; 25.9; 23.6; 21.5; 20.6; 19.4
- Credit to the private sector (US$ millions and percent of GDP):
  - Levels (US$ millions): 2023: 914.1; 2024: 1,070.4; 2025: 35.3 (table format); 2026–2031: 29.6; 18.8; 18.9; 17.5; 16.4; 16.7
  - Percent of GDP (mem. items): 2023: 6.5; 2024: 6.3; 2025: 4.9; 2026–2031: 5.3; 5.6; 6.0; 6.2; 6.4; 6.7
- Credit to the central government (annual percentage change and percent of GDP):
  - 2023: 876.4 (US$ millions)
  - 2024: 2,391.6
  - 2025: 58.4
  - 2026–2031 (annual % change): 13.3; 8.8; 9.8; 10.8; 11.7; 12.7
  - Percent of GDP (mem. items): 2023: 6.5; 2024: 6.3; 2025: 4.9 (table formatting includes many mem. items)
- Exchange rate indicators:
  - Annual Average Exchange Rate (ZWL$ per US$ until 2023, ZiG in 2024):
    - 2023: 3,516.2
    - 2024: (table blank) then 16.7; 26.7 (2026 and 2027 entries in table)
  - End‑of‑Period Exchange Rate:
    - 2023: 6,104.7
    - 2025 onward: 25.8; 27.4 (table formatting)

### Fiscal sector (central government, percent of GDP)
- Revenue and grants:
  - 2023: 11.6
  - 2024: 12.9
  - 2025: 15.5
  - 2026–2031: 16.0; 16.2; 16.4; 16.6; 16.8; 17.0
- Expenditure and net lending:
  - 2023: 21.1
  - 2024: 13.6
  - 2025: 15.5
  - 2026–2031: 16.7; 17.0; 17.3; 17.5; 17.7; 17.9
- Overall balance (commitment basis, staff estimates of arrears):
  - 2023: -9.5
  - 2024: -0.7
  - 2025: 0.1
  - 2026–2031: -0.8; -0.9; -0.9; -0.9; -0.9; -0.9
- Primary balance:
  - 2023: -9.2
  - 2024: 0.2
  - 2025: 0.7
  - 2026–2031: 0.6; 0.5; 0.5; 0.5; 0.5; 0.5

### External sector and reserves (selected)
- Exports of goods and services (US$ millions):
  - 2023: 7,603
  - 2024: 8,252
  - 2025: 11,002
  - 2026–2031: 13,825; 14,685; 15,320; 16,067; 16,822; 17,290
  - Annual percentage changes: 2023: 2.0; 2024: 8.5; 2025: 33.3; 2026–2031: 25.7; 6.2; 4.3; 4.9; 4.7; 2.8
- Imports of goods and services (US$ millions):
  - 2023: 10,293
  - 2024: 10,715
  - 2025: 11,553
  - 2026–2031: 13,828; 14,854; 15,749; 16,741; 17,814; 18,749
  - Annual percentage changes: 2023: 7.6; 2024: 4.1; 2025: 7.8; 2026–2031: 19.7; 7.4; 6.0; 6.3; 6.4; 5.3
- Current account balance (excluding official transfers):
  - Levels (US$ millions): 2023: 135; 2024: 501; 2025: 2,129; 2026–2031: 2,120; 1,994; 1,796; 1,628; 1,371; 1,016
  - Percent of GDP: 2023: 0.3; 2024: 1.1; 2025: 4.0; 2026–2031: 3.7; 3.5; 3.0; 2.6; 2.1; 1.5
- Gross international reserves (US$ millions and months of imports):
  - Reserve assets (US$ millions): 2023: 110; 2024: 484; 2025: 1,181; 2026–2031: 1,537; 2,157; 2,777; 3,397; 4,050; 4,703
  - Months of imports of goods and services: 2023: 0.1; 2024: 0.5; 2025: 1.2; 2026–2031: 1.3; 1.7; 2.1; 2.4; 2.7; 3.0

### Public debt and arrears
- Consolidated public sector debt (US$ millions and percent of GDP):
  - Levels (US$ millions): 2023: 21,077; 2024: 22,460; 2025: 22,843; 2026–2031: 22,523; 22,916; 23,331; 23,746; 24,172; 24,609
  - Percent of GDP: 2023: 76.1; 2024: 70.4; 2025: 43.8; 2026–2031: 42.3; 41.4; 40.4; 39.5; 38.5; 37.6
- Public and publicly guaranteed external debt:
  - Levels (US$ millions): 2023: 16,538; 2024: 15,326; 2025: 15,223; 2026–2031: 15,318; 15,228; 15,200; 15,189; 15,148; 15,375
  - Percent of GDP: 2023: 59.6; 2024: 48.0; 2025: 29.2; 2026–2031: 28.8; 27.5; 26.3; 25.2; 24.1; 23.5
- Of which: Arrears (levels and percent of GDP):
  - Levels (US$ millions): 2023: 10,770; 2024: 10,905; 2025: 11,127; 2026–2031: 11,842; 12,390; 12,851; 13,466; 13,886; 14,534
  - Percent of GDP: 2023: 38.8; 2024: 36.7; 2025: 21.3; 2026–2031: 22.3; 22.4; 22.3; 22.4; 22.1; 22.2

### Balance of payments and external financing mechanics (selected)
- Current Account components (US$ millions, 2025–2031 projections):
  - Current Account: 2025: 2,129; 2026–2031: 2,120; 1,994; 1,796; 1,628; 1,371; 1,016
  - Exports of goods: 2025: 10,477; 2026–2031: 13,287; 14,134; 14,756; 15,490; 16,231; 16,686
  - Imports of goods: 2025: 9,513; 2026–2031: 11,584; 12,405; 13,098; 13,873; 14,710; 15,390
  - Secondary income (net): 2023: 3,260; 2024: 3,443; 2025: 3,291; 2026–2031: 3,204; 3,238; 3,264; 3,291; 3,319; 3,385
  - Workers' Remittances (US$ millions): 2023: 2,162; 2024: 2,575; 2025: 2,821; 2026–2031: 2,849; 2,878; 2,907; 2,936; 2,965; 3,030
- External Financing Table (percent of GDP), 2025–2031:
  - I. Total Requirement: 2025: 3.0; 2026–2031: 2.3; 2.2; 2.4; 2.2; 2.2; 2.5
    - Current Account Deficit: -3.7; -3.5; -3.0; -2.6; -2.1; -1.5
    - Public Sector Debt Amortization: 0.8; 1.1; 0.8; 1.0; 0.7; 0.6
    - Reserves accumulation: 0.6; 1.1; 1.0; 1.0; 1.0; 1.0
    - Other Capital Flows: 5.3; 3.6; 3.4; 3.0; 2.5; 2.4
  - II. Total Sources: 2025: 1.7; 2026–2031: 1.3; 1.4; 1.3; 1.4; 1.4; 1.4
    - Official Transfers: 0.3 (each year)
    - Foreign Direct Investment, net: 1.7; 1.8; 1.9; 1.9; 2.0; 2.0; 2.0
    - Private Sector Loans, net: -0.3; -0.7; -0.7; -0.9; -0.8; -0.8
    - Loan Disbursements to Public Sector: 0.1; 0.1; 0.0; 0.0; 0.0; 0.0; 0.0
  - III. Financing Gap (I–II): 2025: 1.3; 2026–2031: 1.1; 0.9; 1.1; 0.7; 1.0; 1.0
  - IV. Expected Sources of Financing:
    - Exceptional Financing (Accumulation of arrears): 2025: 1.3; 2026–2031: 1.1; 0.9; 1.1; 0.7; 1.0; 1.0

### Financial sector soundness (selected Financial Soundness Indicators)
- Regulatory capital to risk-weighted assets:
  - Dec‑2019: 33.4
  - Dec‑2020: 29.8
  - Dec‑2021: 26.3
  - Dec‑2022: 30.2
  - Dec‑2023: 29.6
  - Dec‑2024: 29.4
  - Dec‑2025: 27.7
- Nonperforming loans (past due > 90 days):
  - Dec‑2019: 1.8
  - Dec‑2020: 0.3
  - Dec‑2021: 0.9
  - Dec‑2022: 1.7
  - Dec‑2023: 2.1
  - Dec‑2024: 3.4
  - Dec‑2025: 3.5
- Past‑due loans to gross loans (aggregate of special mention, substandard, doubtful, and loss loans):
  - Dec‑2019: 18.3
  - Dec‑2020: 33.8
  - Dec‑2021: 41.6
  - Dec‑2022: 38.3
  - Dec‑2023: 35.9
  - Dec‑2024: 32.5
  - Dec‑2025: 29.7
- Liquidity and profitability indicators (selected):
  - Liquid assets/total assets (Dec sequence): 51.7; 53.0; 44.6; 44.7; 41.1; 33.7; 35.2
  - Return on assets (Dec sequence): 12.8; 10.1; 9.6; 15.1; 19.4; 19.0; 5.9
  - Return on equity (Dec sequence): 62.9; 53.0; 50.0; 68.5; 75.8; 69.0; 20.5

### Risk Assessment Matrix — key risks, likelihood, expected impact, and policy responses
- Conjunctural Risks
  - Escalating Trade Measures and Prolonged Uncertainty
    - Likelihood: High
    - Expected Impact: Medium
    - Policy Response: Push forward faster implementation of the AfCFTA to boost regional trade; step‑up implementation of structural reforms to create a stable business environment to attract FDI and improve competitiveness.
  - Geopolitical Tensions
    - Likelihood: High
    - Expected Impact: (text: describes broad negative effects)
    - Policy Response: Push forward faster implementation of the AfCFTA; step‑up structural reforms; diversify economic structure.
  - Fiscal Vulnerabilities and Higher Long‑Term Interest Rates
    - Likelihood: High
    - Expected Impact: Medium
    - Policy Response: Step‑up implementation of structural reforms; advance reforms to improve economic performance and gain support from the international community to pave the way towards arrears clearance unlocking financing from IFIs.
- Commodity price volatility
  - Likelihood: High
  - Expected Impact: High
  - Policy Response: Seek humanitarian support; create fiscal space for grain imports; improve targeting of social support; allow automatic stabilizers; avoid procyclical tightening in fiscal policy; adjust monetary policy as needed; enhance liquidity and reserves management; conduct structural reforms to reduce commodity dependence.
- Decline in International Aid
  - Likelihood: High
  - Expected Impact: (severe for low‑income and fragile countries)
  - Policy Response: Create fiscal space to cope with adverse shocks and ensure the basic expenditure.
- Structural risks
  - Cyberthreats
    - Likelihood: High
    - Expected Impact: High
    - Policy Response: Invest in physical and human capital to increase cyber security and resilience.
  - Climate change
    - Likelihood: Medium
    - Expected Impact: High
    - Policy Response: Seek humanitarian support; create fiscal space for grain imports; rationalize agricultural support schemes to support long‑term growth and resilience.
- Potential Domestic Risks
  - Fiscal policy slippages
    - Likelihood: High
    - Expected Impact: High
    - Policy Response: Take upfront measures to close the financing gap; prepare a credible contingency plan; improve revenue collection and streamline spending.
  - Slow reengagement from delays in advancing reforms
    - Likelihood: High
    - Expected Impact: High
    - Policy Response: Advance reforms to gain support of the international community to pave the way for arrears clearance, unlocking financing from IFIs and restoring access to international financial markets.

*Source: Zimbabwean authorities; IMF staff estimates and projections.*

### Annex II. External Sector Assessment

### Annex II. External Sector Assessment

### Overall Assessment
- The external position of Zimbabwe in 2025 was moderately weaker than the level implied by medium-term fundamentals and desirable policies.
- Key drivers: high level of external debt which is in distress, low foreign reserves, and REER overvaluation.
- The exchange rate used by the RBZ in the WBWS market remained stable in 2025.
- The gap between the parallel exchange rate and the WBWS rate narrowed to around 20 percent by the end of 2025.
- Data shortcomings and natural disasters increase uncertainty surrounding the ESA: external sector statistics rated C (see 2025 Article IV staff report Annex IV).

### Potential Policy Responses
- Enhance functioning of the FX market to provide relevant information for monetary policy and to strengthen credibility of the ZiG.
- Implement fiscal consolidation to improve the current account position.
- Implement growth-friendly macroeconomic policies to:
  - strengthen the trade balance;
  - anchor inflation expectations;
  - build confidence in the domestic economy to boost private capital inflows and shore up reserves;
  - strengthen Zimbabwe’s external competitiveness.

### Foreign Assets and Liabilities: Position and Trajectory
- Data limitations: Zimbabwe does not collect international investment position data; monetary survey used as proxy for NFA-to-GDP ratio.
- NFA-to-GDP ratio:
  - 2025: -1.0 percent (decreasing from a balanced position in 2022).
  - Projected to increase to 9.9 percent in 2030 with economic reforms and implementation of sound policies.
- If public external debt is included for the NFA in the financial sector:
  - 2025 NFA-to-GDP ratio: -30.5 percent.
- Assessment: Given positive CA in the medium term and notwithstanding projected unidentified capital outflows in the BoP, the net foreign asset position is projected to improve, but risks to external sustainability remain high.

### Current Account
- Background:
  - Projected CA surplus in 2025: 4.0 percent of GDP (up from 1.1 percent of GDP in 2024).
  - Drivers: strong growth in production and prices of key mining exports (gold), resilient growth of worker remittances, and somewhat improved fiscal balance.
  - CA balance projected to be in surplus in 2026 due to high gold prices and strong remittances.
  - Medium-term CA balance projected to remain strong, supported by high gold prices.
- EBA-lite estimates for 2025:
  - Adjusted current account balance: 2.8 percent of GDP.
  - Adjusted current account norm: 3.9 percent of GDP.
  - Size of the adjustor: 0.3 percent of GDP (calculated as product of coefficient before NIIP in the CA regression and the difference between medium-term NFA under sound policies and NFA in 2025 divided by GDP in 2025).
  - Current account gap: -1.1 percent of GDP.
  - -4 .2 percent of GDP is explained by policy gaps in Zimbabwe compared to trading partners, especially the cyclically adjusted fiscal balance and the change in reserves.
- Additional assessment: Despite improvements, overall external debt position, external default and inadequate reserves, and consistently large errors and omissions (indicative of large capital flight) corroborate that Zimbabwe’s external position is weaker than implied by fundamentals and desirable policies.

### Real Exchange Rate
- Background:
  - RBZ exchange rate in WBWS market remained stable in 2025.
  - Parallel premium narrowed to around 20 percent by end-2025.
  - Monetary policy stance remained tight: statutory reserve requirements for both ZiG and FX demand deposits at 30 percent; policy rate maintained at 35 percent (limited impact on liquidity conditions).
  - ZiG-based real effective exchange rate appreciated in 2025 due to higher inflation relative to trading partners; limited impact on competitiveness given limited role of national currency.
- Assessment:
  - Based on elasticity of -0.1, the CA gap implies an overvaluation of the REER by 9.9 percent.
  - Construction of a reliable and consistent domestic price index relative to foreign countries is difficult due to multiple changes in the currency regime and hyperinflation.
  - REER data for the REER model is not available; not possible to assess Zimbabwe’s equilibrium exchange rate using the REER model.

### Capital and Financial Accounts: Flows and Policy Measures
- Background:
  - Capital flow measures (CFM) under the Institutional View remain in place:
    - approval requirements for capital account transfers;
    - surrender requirements (increased from 25 percent to 30 percent in February 2025);
    - cash withdrawal and related measures on outflows;
    - limits on foreign investments;
    - limits on external borrowing.
  - 2025 financial account: net lending position due to repayment of loans from commercial lenders.
  - Non-debt creating inflows, notably FDI, increased relative to 2024 given macroeconomic stability.
  - Portfolio investments recorded small net outflows.
  - Credibility dividends from economic reforms could potentially improve outlook for FDI and portfolio investments in the medium term.
- Assessment and staff advice:
  - Staff encourage an appropriate mix of policies to avoid disruptive capital outflows associated with broader economic instability.
  - Authorities encouraged to relax CFMs as soon as economic conditions permit.
  - Pursue a comprehensive package of macroeconomic, financial, and structural policies to allow relaxation of CFMs, shore up reserves, and mitigate currency distortions, financial system stress and output losses.

### FX Intervention and Reserves Level
- Background:
  - Exchange rate regime: de jure floating and de facto other managed.
  - Central bank intervention in FX market was pervasive in 2025.
  - Long-standing capital control measures exist (surrender requirement increased to 30 percent of export receipts in February 2025).
  - FX reserves increased to about US$1.2 b illion by end-December 2025 (from US$179 million at the time of the introduction of the ZiG in 2024).
- Assessment:
  - Gross international reserves increased fast in 2025 (around 1.5 month of imports at end-2025).
  - Reserves remain significantly below adequate levels:
    - Much lower than the 3-months of imports rule-of-thumb.
    - Much lower than the IMF toolkit model-based benchmark for low-income countries, which suggests 5.4 months of imports is the adequate level for Zimbabwe.
  - Given depleted reserves, FX management should be consistent with reserve accumulation goals for reserve coverage under the new currency regime, while considering the dual currency system and seasonality of FX demand/supply.

*Source: Annex II. External Sector Assessment*

### 9.      Policies and reforms to be pursued under the  are expected to strengthen policy

### 9.      Policies and reforms to be pursued under the  are expected to strengthen policy 

### IV. PROGRAM POLICIES — Overview
- SMP policies aim to consolidate macroeconomic stability and support re-engagement with creditors.
- Maintain non-monetization of budget deficits and prevent accumulation of new domestic expenditure arrears through strengthened fiscal discipline and public financial management reforms.
- Advance reforms to strengthen monetary and exchange rate policy framework, improve FX market functioning, and strengthen monetary policy operations.
- Implement governance and institutional reforms to mitigate fiscal risks and enhance transparency to support arrears clearance and restoration of access to external financing.

### A. Fiscal Policy and Public Financial Management
- 2026 budget execution is central to demonstrating commitment to sound macroeconomic management; continue cash budgeting policy stance.
- A process of identifying and auditing expenditure arrears commenced in 2025.
- Full-year conservative revenue envelope for first-half 2026 budget execution: US$9.0 billion.
- Total expenditure limit for the first half of 2026: US$4.2 billion (MEFP Table 1, Prior Action #1).
- Cash management measures:
  - Revised circular clarifying mandates of the Cash Management Committee (CMC).
  - CMC re-established and held its first and second meetings on February 02 and 09, 2026.
  - Standard monthly cash management template with submission timelines, reconciliation to PFMS, and variance analysis is being developed (MEFP Table 1, Prior Action #2).
- Domestic arrears strategy:
  - Clearance envisaged over a five-year period through budget allocations.
  - Current expenditure arrears estimated at US$1.7 billion as of December 31, 2024 (pending validation through audit).
  - US$304.5 million allocated in the 2026 National Budget toward expenditure arrears clearance.
  - Focused audit on arrears related to dam construction and water supply projects, road development, and the Input Support Scheme, which together account for about 76 percent of total domestic arrears as of end-2024.
  - Terms of Reference developed and adopted for the Auditor-General Office to conduct independent audits of expenditure arrears for end years 2024 and 2025 (MEFP Table 1, Prior Action #4).
- Measures to avoid new arrears:
  - Revised circular to MDAs requiring quarterly reporting of domestic expenditure arrears on a rolling basis beginning with Q1 2026 (Table 1, Prior Action #3).
  - Initial monitoring focus: MoFED&IP, MLAFWRD, and MoTID.
- PFMS and commitment control:
  - Operationalize US dollar payment functionality in the PFMS; Treasury to issue payment instructions exclusively from PFMS.
  - Configure PFMS to require Funds Reservations for all expenditures and to record earmarking for multi-year capital projects using Internal Order numbers (MEFP Table 3, SB #5).
- Public wage bill management:
  - Employment costs targeted not to exceed 50 percent of total revenue collections.
  - In the 2026 budget, employment costs are slightly above the 50-percent threshold.
  - Measures to reduce ratio: align salary adjustments with revenue, implement Job Evaluation Exercise recommendations, rationalize staffing, hard freeze on new recruitment except critical sectors, promote multitasking, redeploy staff, payroll audits, digitization of HR systems, elimination of ghost workers.
  - MOFED&IP to develop a medium-term staffing plan to bring employment cost to below 50 percent of revenue and ensure total wage bill-to-GDP ratio converges towards 8.4 percent over the medium run (MEFP Table 3, SB #6).
- Protection of social and priority spending:
  - Maintain budgeted level for social programs: US$592 million.
  - Programs anchored on the Zimbabwe Social Registry: Presidential Input Scheme; BEAM; Food Deficit Mitigation; Harmonized Cash Transfers; Social Protection Management Information System.
  - Adopt and publish user manual covering all operational modules of the Zimbabwe Social Registry (ZISO) (MEFP Table 3, SB #3).
- Treasury Single Account (TSA):
  - Develop TSA reform strategy with IMF technical assistance, including bank account rationalization and phased roadmap for core TSA introduction and coverage expansion (MEFP Table 3, SB #7).
- Domestic revenue mobilization:
  - Domestic revenue mobilization strategy 2026 to 2030 focusing on targeted tax policy and strengthened tax administration.
  - Over next ten months, improve taxpayers' register quality by monitoring and quarterly reporting the percentage of new VAT and PAYE registrants who file and pay (MEFP Table 3, SB #4).
  - Implement compliance-improvement strategy for large and medium-sized corporate taxpayers to raise on-time filing and payment rates for VAT and PAYE.
  - Develop and operationalize a strategy to address tax arrears using risk-based and behaviorally informed interventions.
- Mutapa Investment Fund transparency and fiscal risk management:
  - Mutapa published its inaugural financial statement in December 2025.
  - Mutapa to publish audited IFRS-consistent financial statements for all subsidiaries (excluding those under Corporate Rescue Proceedings or Administration): for 21 subsidiaries for the 12-month period ending December 31, 2024 and for 5 subsidiaries for the period ending on 31 December 2023 (MEFP Table 3, SB#9).
  - Mutapa and subsidiaries to refrain from contracting, guaranteeing, or assuming borrowing or debt-like obligations without prior written approval of the Ministry of Finance (MEFP Table 3, SB#8).
  - MoFED&IP to produce an extended Fiscal Risks Statement quantifying fiscal risks from state-owned enterprises and require publication of contingent liabilities and borrowings, subjecting borrowing above thresholds to prior Ministerial approval and Parliamentary notification.

### B. FX Market and the Monetary Policy Framework
- Achievements and clarifications:
  - Progress in stabilizing FX market and reducing parallel market premium.
  - Maintained a tight monetary policy stance and conducted regular FX market interventions using proceeds from surrender requirements.
  - RBZ and MOFED&IP streamlined and consolidated FX market regulations into a single comprehensive set of operational rules clarifying that:
    - banks are free to determine exchange rates in the interbank market and in transactions with clients;
    - all willing sellers of FX can set the price for their FX;
    - removed rules requiring banks to ration or prioritize FX sales to customers.
  - MOFED&IP repealed Statutory Instrument 81A to eliminate restrictions on pricing of goods and services based on the prevailing WBWS rate.
  - August 2025 Monetary Policy Statement communicated a hybrid framework: price stability as the primary objective, nominal exchange rate as the intermediate target, and reserve money as the operational target.
  - RBZ developing a new FX trading platform with World Bank technical assistance to reduce fragmentation, enhance market efficiency, incentivize interbank FX transactions, improve transparency and price discovery, and address market segmentation.
- Forward actions:
  - Provide IMF staff timely information on the parallel market premium and backlog in FX demand pipeline to monitor market clearing (MEFP Table 3, SB #1).
  - Refine methodologies for computing reference rate series using weighted average price of all market transactions; publish these rates for reference only.
  - Develop a comprehensive strategy to further liberalize the FX market (MEFP Table 3, SB #2) to support transition to a "mono-currency" system and an inflation targeting monetary policy framework. The strategy will be developed jointly by MOFED&IP and RBZ with IMF technical assistance and will include:
    - Promoting demand for ZiG through coordinated policy measures, fiscal operations (increase share of Treasury revenues and expenditures in ZiG), public debt management (issuance of local currency bonds), financial market development (domestic debt markets), and capital flow management.
    - Improving monetary policy operations by strengthening liquidity forecasting and management via market-based OMOs using indirect instruments and developing analytical toolkits to monitor relationships among objectives, targets, and operational instruments.
    - Enhancing FX market functioning and developing an FX intervention strategy aligned with RBZ's risk appetite and program targets to reduce excess exchange rate volatility and gradually limit RBZ market presence.
- Policy on surrender requirements:
  - Refrain from further increases in foreign exchange surrender requirement until comprehensive FX liberalization strategy is adopted.
  - Temporary, time-bound increases could be justified in response to intensification of capital outflows; any additional surrender requirement will be channeled through the market.
- Institutional strengthening of RBZ:
  - Update RBZ Act to reinforce central bank autonomy and clarify policy mandate; under revised framework RBZ will not extend credit to the government.
  - With IMF technical assistance, address legacy RBZ balance sheet weaknesses and improve monetary and financial reporting.
  - Plan to request a Safeguards Assessment (SA) of the RBZ in the third quarter of the SMP year to assess financial controls and inform corrective measures in preparation for possible IMF arrangement.

### C. Maintaining Financial Sector Stability
- Strengthen the financial stability framework guided by the 2018 FSSR.
- Adopted Basel III Liquidity Coverage Ratio; finalizing standards and guidelines for Net Stable Funding Ratio and Basel III capital rules with IMF technical assistance.
- Improve banks' corporate governance, cybersecurity, payment system oversight, macroprudential, and crisis management frameworks; implement consolidated supervision.
- Prioritize implementation of Basel III capital standards.
- Consider establishing separate, dedicated financial stability and resolution units for macroprudential regulation, supervision, and crisis management.
- Started asset quality thematic reviews (AQRs) to validate banks' credit risk management practices.
- February 2025 Circular directing banking institutions to comply with FX net open positions of 10 percent (single currency) and 20 percent (all currencies); consulting the banking industry, reviewing the formula, and planning a staged approach to implementation.

### D. Governance and Structural Reforms
- Strengthen economic governance to lift growth prospects.
- Introduced electronic government procurement (E-GP) system and developed the National Standard Price List (NSLP) to set maximum procurement prices for MDAs.
- Initiated pooled procurement for selected goods and services to optimize economies of scale.
- Prepare a comprehensive anti-corruption strategy in consultation with IMF staff, accompanied by a policy matrix with responsibilities, timelines, and measurable actions (MEFP Table 3, SB #10).
- Publish the anti-corruption strategy when finalized to enhance transparency and provide a roadmap for implementation.

### V. PROGRAM MONITORING
- Program monitoring based on prior actions (MEFP Table 1), quantitative targets (MEFP Table 2), and structural benchmarks (MEFP Table 3); definitions in the Technical Memorandum of Understanding (TMU).
- The 10-month SMP will have three review test dates set for end-March, end-June, and end-September 2026.
- Provide IMF staff with statistical data and other information specified in the TMU and any additional information requested.
- Establish a program monitoring committee at the SMP outset—including representation from the IMF Resident Representative Office—to coordinate review missions and performance assessment under the program.

*Source: 1zweea2026001-source-pdf - 9.      Policies and reforms to be pursued under the  are expected to strengthen policy*

### 1. Floor on the primary budget balance of the central government (US$ million) 3/ 4/

### 1. Floor on the primary budget balance of the central government (US$ million) 3/ 4/

### Quantitative targets (selected table entries)
- 1. Floor on the primary budget balance of the central government (US$ million) 3/ 4/
  - 47 136  
  - 200  
  - 271
- 2. Ceiling on changes in credit to the nonfinancial public sector from the RBZ (US$ million) 3/
  - 0 0  
  - 0 0
- 3. Floor on changes in net official international reserves (US$ million) 5/ 6/
  - 74 195  
  - 291 356
- 4. Continuous ceiling on contracting or guaranteeing of new external non-concessional debt by the central government (US$ million) 7/
  - 0 0  
  - 0  
  - 0
- 5. Ceiling on changes in ZiG monetary base of the RBZ (ZiG million) 8/
  - 602 830  
  - 830 830

### Indicative targets (selected table entries)
- 1. Floor on central government total revenue collection (US$ million)
  - 1,975  
  - 4,132  
  - 6,385 9,000
- 2. Ceiling on accumulation new (net) domestic expenditure arrears (US$ million) 9/
  - 0  
  - 0  
  - 0  
  - 0
- 3. Ceiling on central government employment costs (US$ million) 10/
  - 840  
  - 2,143  
  - 3,446 4,976
- 4. Floor on protected social and priority spending (US$ million) 11/
  - 190 414  
  - 603 755
- 5. Ceiling on changes in domestic debt (US$ million) 5/
  - 19 8  
  - 18 41

### Program exchange rates (Table 1: Rates as of December 31, 2025)
- Currency Zimbabwe Gold (ZiG) per currency unit / Currency units per US Dollar
  - US Dollar 25.98 1.00
  - GB Pound 34.98 0.74
  - Euro 30.49 0.85
  - Rand 1.56 16.61
  - SDR 35.61 0.73
  - Renminbi 3.71 6.99

### Structural benchmarks (selected SBs and target dates)
- Monetary, FX, and Financial Policies
  - RBZ to consolidate progress in restoring FX market equilibrium and start publishing reference exchange rate series calculated as a weighted average of all transaction prices. To be assessed at each program review.
  - RBZ to develop a comprehensive strategy to further liberalize the foreign exchange market. End-September 2026.
- Social programs
  - Ministry of Public Service, Labor and Social Welfare to adopt and publish a finalized user manual covering all operational modules of the Zimbabwe Social Registry (ZISO). End-June 2026.
- Tax administration
  - Improve taxpayer register quality by monitoring and quarterly reporting the percentage of new VAT and PAYE registrants who file and pay. End-March 2026.
- Public Financial Management
  - MOFED&IP to (i) operationalize the US dollar payment functionality in the PFMS and require all MDAs to process all USD payment requests through the PFMS; and (ii) implement full earmarking of funds through Funds Reservations. End-September 2026.
  - MoFED&IP to develop a medium-term staffing plan aimed to bring the employment cost-to-revenue ratio to below fifty percent and ensure total wage bill to GDP converges towards 8.5 percent of GDP. End-September 2026.
  - MoFED&IP develops a Treasury Single Account (TSA) reform strategy, including bank account rationalization plan and phased roadmap for core TSA. End-June 2026.
- Mutapa and fiscal risks
  - Mutapa Investment Fund and subsidiaries to refrain from contracting or guaranteeing borrowing without prior written approval of MoFED&IP. To be assessed at each program review.
  - Publish audited IFRS-consistent financial statements of 21 of Mutapa’s subsidiaries for the 12 month-period ending on 31 December 2024, and for 5 subsidiaries for the period ending on 31 December 2023. End-September 2026.
- Governance
  - Prepare and publish, in consultation with IMF staff, an anti-corruption strategy with policy matrix (MEFP, Paragraph 31). End-September 2026.

### Technical Memorandum of Understanding — key definitions and provisions
- Central government: single institutional unit consolidating all accounts authorized through the Blue Book; excludes public entities with autonomous legal personae.
- General government: central government, extra-budgetary funds, social security, and local governments. RBZ considered part of Public Financial Corporations.
- Public sector: general government and all state-owned enterprises including Mutapa Investment Fund. Nonfinancial public sector excludes RBZ and nine other public financial corporations.
- Fiscal year: January 1 to December 31.
- Primary fiscal balance definition (paragraph 8): central government revenue minus central government expenditure (excluding interest due on public debt); monitored on a cash basis from Treasury data; ZiG components converted to USD using monthly average exchange rates.
- Adjustor for the primary balance (paragraph 9): downward adjustor of up to $300 million by the amount of new external debt contracted by central government to finance critical growth-enhancing projects; large projects (above $100 million) assessed with reputable independent financial institution.
- Ceiling on changes in credit to the nonfinancial public sector (paragraph 10): measured from Central Bank Survey (IFS S1G submission) by sum of specific codes; assessed from end-December 2025; excludes recognition of deferred royalties (US$82 million).
- Adjustor for RBZ credit ceiling (paragraph 11): subtract inflows from in-kind royalties for FX reserves accumulation, valued at program exchange rate.
- Net official international reserves (NIR) definition (paragraph 12): RBZ liquid gross official foreign reserve assets minus short-term official foreign reserve liabilities; assets and liabilities in SDRs or other currencies converted at program exchange rates; gold valued at US$4341.2 per fine troy ounce.
- NIR assessment (paragraph 13): cumulative change from end-December 2025 to test dates; excludes autonomous factors outside RBZ control.
- Continuous ceiling on contracting/guaranteeing new external non-concessional debt (paragraphs 14–18): applies to debt to non-residents with original maturity of one year or more; assessed continuously from program approval (March 27, 2026); debt concessional if grant element at least 35 percent using unified discount rate of 5 percent; program reference rates for six-month USD SOFR and six-month EURIBOR are 2.73 percent and 2.00 percent respectively; ceiling excludes new external debt to finance clearance of external arrears to specified IFIs and excludes planned BADEA loan (US$ 42 million, grant element 23 percent); upward adjustor of up to $300 million for critical growth-enhancing projects.
- Ceiling on changes in ZiG monetary base (paragraph 19): targets apply to quarter-on-quarter changes in ZiG component of monetary base measured from Central Bank Survey (IFS S1G submission); monetary base defined as sum of quasi-currency instruments in circulation and specified ZiG liabilities and codes in Central Bank Survey.
- Floor on central government revenue collection (paragraph 20): defined in accordance with GFSM 2001 including in-kind royalties transferred to RBZ; measured on Treasury data as cumulative USD flows; ZiG components converted using period average monthly exchange rate.
- Ceiling on accumulation of new domestic expenditure arrears (paragraphs 21–22): defined for specific ministries (MLAFWRD, MoFED&IP, MoTID); arrears criteria (30 days unpaid after due date, wages/pensions 90 days, goods/services payments 90 days after processing); net arrears defined as new arrears minus payments toward previously accumulated arrears; non-USD components converted at program exchange rate.

### Key procedural details
- Test dates for quantitative targets: end-March 2026, end-June 2026, and end-September 2026. Continuous quantitative targets remain in effect at all times.
- Assessment basis for many targets: cumulative flows from the beginning of the calendar year or from end-December 2025 as specified.
- Specific exclusions called out: recognition of deferred royalties (US$82 million) excluded from RBZ credit ceiling; BADEA loan (US$ 42 million) excluded from non-concessional borrowing ceiling.

*1zweea2026001-source-pdf*

### 23.      For reporting purposes, data on arrears will be limited to the three ministries listed in

### 23. For reporting purposes, data on arrears will be limited to the three ministries listed in paragraph 20

### Reporting on arrears
- Data on arrears will be limited to the three ministries listed in paragraph 20.
- The report will be on a quarterly basis and reporting will be based on the agreed template consolidated for the MDAs of the listed three ministries.

### H. Ceiling on central government employment costs
- Measurement:
  - Measured on a cash basis as the sum of:
    - civil service wages and salaries;
    - transfers to grant-aided institutions, public service pension fund, National Social Security Authority (NSSA), Premier Service Medical and society (PSMAS);
    - funeral expenses; and
    - benefits in kind (Condition of Service Fuel).
- Monitoring:
  - The target will be monitored as cumulative flows in USD from the beginning of the year.
  - The ZiG component of employment costs will be converted to the USD using average monthly exchange rates.

### I. Floor on protected social and priority spending
- Measurement:
  - Protected social spending is measured on a cash basis and comprises central government spending in:
    - Education: Recurrent spending on teaching and learning materials; spending on the school feeding program; expenditures on the Student Stipend Support portion of the National Education and Training Fund.
    - Health: Recurrent spending on preventative health programmes; medical supplies procured for ARVs and TB drugs; co-financing of GAVI programmes; current expenditures for government hospitals and health centres; grant aided institutions Parirenyatwa/Mission Hospitals/Local authorities; and recurrent expenditures on maternal and child health.
    - Spending under program schemes: (1) Presidential Input Scheme; (2) Basic Education Assistance Module (BEAM); (3) Food Deficit Mitigation; (4) Harmonized Cash Transfers; and (5) Social Protection Management Information System.
- Monitoring:
  - The target will be monitored as cumulative flows in USD from the beginning of the year.
  - The ZiG component of social spending will be converted to the USD using average monthly exchange rates.

### J. Ceiling on changes in domestic debt
- Definition:
  - Changes in domestic debt are defined as a change in the stock of contracted or guaranteed debt to residents.
  - The definition of the stock of domestic debt excludes any obligations to former farm owners.
  - The definition of changes in domestic debt excludes:
    - (i) government securities issued for the compensation of former farm owners; and
    - (ii) the accumulation of additional domestic arrears to service providers and mining companies.
- Monitoring:
  - This quantitative target will be assessed on a cumulative basis starting from end-December 2025, valued at the program exchange rate.

### K. Other Definitions
- Foreign exchange parallel market rate:
  - The parallel market exchange rate refers to the retail transaction rate prevailing outside the official interbank market, including rates used by major retailers, wholesalers for cash sales, and foreign exchange bureaus.
- Foreign exchange uncovered demand:
  - FX uncovered demand or foreign exchange pipeline refers to the stock of verified but unsettled foreign-exchange purchase requests from authorized dealers—covering import payments, service payments, and other external obligations—that are awaiting settlement through the WBWS market.

### DATA REPORTING: key reporting requirements and timelines (Table 2 highlights)
- General submission timing conventions cited across Table 2:
  - Weekly submissions: 1 week submission lag.
  - Daily items: 1 week submission lag.
  - Monthly submissions: typically 1 month or 6 weeks submission lag depending on series.
  - Quarterly submissions: typically 2 months, 3 months, or Quarterly (with specified lag such as 4 weeks).
  - Specific cumulative/start reference: changes in domestic debt assessed starting from end-December 2025.

- Monetary and Financial Sector (reporting institution: RBZ)
  - Examples of required series:
    - Balance Sheet and income statement of the RBZ, including detailed items of NFA, NDA and RBZ’s other liabilities to ODCs — Monthly — 2 weeks.
    - NIR, NFA, CBS 1/ — Weekly — 1 week.
    - ZiG and USD RTGS balances — Weekly — 1 week.
    - Monetary surveys (CBS 1/, ODCS, DCS) — Monthly — 2 months.
    - Outstanding NNCDs — Daily — 1 week.
    - RBZ FX cash flow using the agreed template — Monthly — 1 month.
    - FX prices and transactions among the RBZ, authorized dealers, and customers by bank — Daily — 1 week.
    - Uncovered and fulfilled Demand for FX — Daily — 1 week.
    - Parallel market exchange rates — Daily — 1 week.
    - Prudential liquid asset ratios and liquidity coverage ratios by bank — Monthly — 1 month.
    - Balance sheets and income statements for financial institutions (aggregate and by bank) — Quarterly — 2 months.
    - Individual bank balance sheets with detailed information — Monthly — 1 month.
    - Financial soundness indicators (aggregate and by bank) — Quarterly — 2 months.
    - Common equity tier 1 capital, additional tier 1 capital, total capital, and risk weighted asset by bank — Quarterly — 2 months.
    - Commercial bank interest rates (deposits and lending) — Monthly — 1 month.

- External Sector (RBZ and ZIMSTAT)
  - RBZ purchases and sales of foreign currency — Monthly — 1 month.
  - Banks’ purchases and sales of foreign currency (specified by bank and by type of flow) — Monthly — 1 month.
  - Balance of payments (incl. revised outturn for previous quarters) — Quarterly — 3 months.
  - Import and export data, for aggregated sectors — Monthly — 1 month.
  - Net international reserves (incl. reserve assets/liabilities by currency) — Monthly — 1 week.
  - Foreign exchange flow data (by type of flow) — Monthly — 1 month.
  - Diamond production, exports, and prices — Quarterly — 1 month.

- External Debt (MoFED&IP)
  - External debt stock, disbursements, amortization, interest, other fees and charges, and repayment (by creditor and currency); detailed terms and conditions of all new contracted and government-guaranteed external borrowing (concessional and non-concessional), including the Mutapa Investment Fund; and committed undisbursed balances (by creditor) — Monthly — 1 month.

- Fiscal Sector (MoFED&IP)
  - Central government operations – revenue, expenditure, and financing, in USD and in ZiG — Monthly — 6 weeks.
  - Detailed data on the execution of the budget (by economic and administrative classification) — Monthly — 6 weeks.
  - Consolidated stock of domestic expenditure arrears for the selected three MDAs (MLAFWRD, MoFED&IP, and MoTID, by expenditure type and by currency) netting out planned domestic arrears — Quarterly — Quarterly.
  - Stock of domestic debt, disbursements, amortization, interest, and other fees and charges; face value, maturity, interest rate, and payments schedule for new domestic loans and securities by currency (USD and ZiG), reported separately — Monthly — 6 weeks.
  - Revenue collection by tax head and by currency — Quarterly — 6 weeks.
  - Monthly tax debt by currency (USD and ZiG), by taxpayer group, and by tax head — Monthly — 6 weeks.
  - Mining sector tax by mineral, tax head, and by currency — Monthly — 6 weeks.
  - Mining sector royalties by mineral, by currency (in-cash and in-kind) — Monthly — 6 weeks.
  - On time filing and payment of VAT and PAYE by client office (LCO, MCO, SCO) — Monthly — 6 weeks.
  - Collection of VAT and PAYE by client office (LCO, MCO, SCO) — Monthly — 6 weeks.
  - Detailed data on the budget execution of protected social and priority spending (as defined in this document) — Quarterly — 6 weeks.
  - Detailed data on staff in post including Grant Aided Institutions — Monthly — 6 weeks.
  - Detailed data on employment compensation costs — Monthly — 6 weeks.
  - Details of disbursed external budget support and project grants and loans — Monthly — 6 weeks.
  - Total volume of Treasury bills issued, including by RBZ, with details on interest rate, maturity, and recipient — Monthly — 6 weeks.
  - All guarantees provided by the central government and RBZ, including guarantees to public corporations, RBZ (from central government), and private sector (including agricultural guarantees) — Quarterly — Quarterly.

- Mutapa Investment Fund (Mutapa) and its portfolio companies (Mutapa reporting)
  - Opening balance sheet — Quarterly — Quarterly.
  - Current balance sheet — Quarterly — Quarterly.
  - New borrowing by MIF and its subsidiaries — Quarterly — Quarterly.

- Real Sector (ZIMSTAT and RBZ)
  - Consumer Price Index — Monthly — 1 month.
  - Fuel price indices, including Petrol, Diesel, and Paraffin — Monthly — 1 month.
  - Producer Price Index; Building Materials Price Index; Poverty Datum Lines; and Civil Engineering Materials Index — Quarterly — 6 weeks.
  - Agricultural production data (volume/value of major products) — Quarterly — 3 months.
  - Mining production data (volume/value by minerals), excluding production from sand and stone quarries — Quarterly — 3 months.
  - National Accounts (breakdowns of production and expenditure side in real and nominal terms) — Quarterly — 3 months.
  - Quarterly Digest of Statistics — Quarterly — 3 months.
  - RBZ Monthly Economic Review — Monthly — 6 weeks.
  - Quarterly report on macroeconomic developments — Quarterly — 3 months.

- Structural Benchmarks
  - Update on the status of implementation of the quantitative targets and structural benchmarks specified in Table 2-3 of the MEFP — MoFED&IP and RBZ — Quarterly — 4 weeks.

### Attachment II. Annex I. Public Debt Definition (program purposes)
- Basis:
  - For program purposes, the definition of debt is set out in paragraph 8(a) of the Guidelines on Public Debt Conditionality in Fund Arrangements attached to Executive Board Decision No. 16919-(20/103), adopted October 28, 2020.
- Debt definition:
  - "Debt" means a current, i.e., not contingent, liability, created under a contractual arrangement through the provision of value in the form of financial and nonfinancial assets (including currency) or services, and which requires the obligor to make one or more payments in the form of assets (including currency) or services, at some future point(s) in time; these payments will discharge the principal and/or interest liabilities incurred under the contract.
- Forms of debt include:
  - loans (including deposits, bonds, debentures, commercial loans and buyers' credits; repurchase agreements and official swap arrangements);
  - suppliers' credits (deferred payment contracts); and
  - leases (debt is the present value at inception of all lease payments expected during the agreement, excluding payments that cover operation, repair, or maintenance).
- Arrears and related items:
  - Under this definition, arrears, penalties, and judicially awarded damages arising from the failure to make payment under a contractual obligation that constitutes debt are debt.
  - Failure to make payment on an obligation that is not considered debt under this definition (e.g., payment on delivery) will not give rise to debt.

*Source: 1zweea2026001-source-pdf - 23. For reporting purposes, data on arrears will be limited to the three ministries listed in (IMF content unit).*

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_Source: https://www.imf.org/-/media/files/publications/cr/2026/english/1zweea2026001-source-pdf.pdf_