IMF Staff Completes SMP Discussion Mission to Zimbabwe

IMF News, February 13, 2025

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Published: February 13, 2025

Mission overview

IMF staff team led by Mr. Wojciech Maliszewski conducted a mission to Harare from January 30 to February 13, 2025, to advance discussions on a Staff-Monitored Program (SMP).
Press Release No. 25/35; End-of-Mission press releases convey preliminary findings after a visit to a country. The views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.
IMF Communications Department contact: PRESS OFFICER: Kwabena Akuamoah-Boateng; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson

Economic assessment and recent developments

Growth and output:
- Growth slowed from 5.3 percent to an estimated 2 percent in 2024.
- Agricultural output was lowered by 15 percent in 2024 due to the El Niño-induced drought.
- Growth in 2025 is projected to increase to 6 percent, driven by the recovery in agriculture output due to better climate conditions and the projected improvement in the terms-of-trade.
External sector and remittances:
- Strong remittances continued supporting activity in domestic trade, services, and construction.
- Current account surplus improved to an estimated US$500 million (1.4 percent of GDP) in 2024.
Prices, exchange rate, and monetary conditions:
- The ZiG willing-buyer willing-seller (WBWS) exchange rate was stable from the ZiG’s introduction in April 2024— with the ZiG month-on-month inflation averaging 2.3 percent—until September, when the currency weakened.
- Relative stability returned with the tightening of monetary policy since September; the WBWS and parallel market exchange rates have stabilized, and the gap between these rates has narrowed.
Fiscal developments:
- Strong revenue collection helped limit the 2024 budget deficit to an estimated 1 percent of GDP.
- Fiscal pressures intensified—owing, in large part, to the transfer of the RBZ’s quasi-fiscal operations to the Treasury—resulting in an accumulation of domestic expenditure arrears and emergency spending cuts.

SMP objectives and discussions

Authorities requested an SMP in 2023 to support efforts to stabilize the economy and re-engage with the international community on arrears clearance and debt resolution.
The main objective of the SMP would be to durably anchor macroeconomic stability, building on policy recommendations from the 2024 Article IV consultation.
Fund staff will continue working closely with the authorities to define key parameters and modalities of the SMP. Discussions include:

1. adjusting the fiscal position to avoid a recourse to monetary financing and new arrears and building foundations for a durable fiscal consolidation; 2. fiscal risks residing off-budget (including from the operations of the Mutapa Investment Fund); 3. the effectiveness of the monetary policy framework for the ZiG; and 4. reforms to strengthen economic governance.

IMF support, conditions, and debt reengagement

The SMP is intended to enhance policy credibility and advance the reform agenda embedded in the Structured Dialogue Platform (SDP).
International reengagement remains critical for debt resolution and arrears clearance, which would open the door for access to external financing.
The authorities' reengagement efforts, through the SDP, are key for attaining debt sustainability and gaining access to concessional financial support.
The IMF continues to provide policy advice and extensive technical assistance in:
- revenue mobilization, expenditure control, financial supervision, debt management, economic governance, and macroeconomic statistics.
The IMF is currently precluded from providing financial support to Zimbabwe due to its unsustainable debt situation—based on the IMF’s Debt Sustainability Analysis (DSA)—and official external arrears.
An IMF financial arrangement would require:
- a clear path to comprehensive restructuring of Zimbabwe’s external debt, including the clearance of arrears; and
- a reform plan that is consistent with durably restoring macroeconomic stability; enhancing inclusive growth; lowering poverty; and strengthening economic governance.

Engagements and acknowledgments

The IMF mission held meetings with:
- Minister of Finance, Economic Development and Investment Promotion Hon. Professor Mthuli Ncube, Permanent Secretary Mr. George Guvamatanga; Reserve Bank of Zimbabwe Governor Dr. John Mushayavanhu; Chief Secretary to the President and Cabinet Dr. Martin Rushwaya; other senior government and RBZ officials; honorable members of Parliament; representatives of the private sector; civil society; and Zimbabwe’s development partners.
IMF staff expressed gratitude to the Zimbabwean authorities and stakeholders for the constructive and open discussions and support during the mission.

End-of-Mission press release, February 13, 2025.