Zimbabwe’s prospects for resolving its long-standing debt default could hinge upon its willingness to formally engage with the Group of Twenty (G-20), according to Ajay Banga, President of the World Bank. In a recent interview conducted in Maputo, Mozambique, Mr Banga advised that Zimbabwe cease its solo efforts and seek coordinated multilateral support in order to chart a viable path out of its prolonged financial impasse.
The southern African nation has been in default since 2000, when it ceased repayments to the World Bank. Over the past 25 years, Zimbabwe’s public debt has ballooned to approximately US$21 billion, owed to a mix of multilateral institutions, bilateral creditors, and international lenders. Attempts to resolve the crisis have included raising funds through mineral exports and diplomatic overtures to a consortium of countries aimed at securing US$2.6 billion to address arrears. These efforts have thus far yielded limited progress.
Mr Banga warned that the nation’s current approach could prolong the debt situation indefinitely, stating, “Trying to figure it out on your own, you’ll be doing this for the next five years.” He emphasised the necessity for Zimbabwe to declare its intent to engage the G-20 and request its inclusion in collective restructuring mechanisms.
Compounding the challenge is the fact that Zimbabwe does not meet the strict eligibility criteria for the G-20 Common Framework for Debt Treatments, which was established in 2020 to assist low-income countries in addressing unsustainable debt. While the framework has been utilised by countries such as Ghana, Zambia, and Ethiopia, its processes have faced criticism for slow implementation and protracted negotiations. Zimbabwe’s situation mirrors that of Sri Lanka, which turned to the G-20 in 2023 despite not qualifying as a low-income country.
South Africa, which currently holds the G-20 presidency, has confirmed that Zimbabwe has initiated discussions to gain support from the forum. Nevertheless, any resolution is further complicated by geopolitical factors, particularly the economic sanctions imposed by the United that States. These sanctions have introduced additional obstacles to transparent negotiations and investor confidence.
Efforts to seek advisory support have included the involvement of Kepler Karst, a Madrid-based legal advisory firm, and Global Sovereign Advisory, a consultancy headquartered in Paris. The Zimbabwean government has also enlisted the African Development Bank (AfDB) to act as an intermediary in creditor negotiations, with the assistance of its outgoing president, Dr Akinwumi Adesina, and former Mozambican president Joaquim Chissano.
Although nations such as Belarus, Syria, and Eritrea are also in arrears to the World Bank, Zimbabwe holds the record for the longest-running default. This legacy of fiscal instability stems largely from the country’s controversial land reform programme, combined with macroeconomic turbulence and recurring climatic shocks, including a recent drought.
Mr Banga concluded by reaffirming the World Bank’s readiness to provide technical support, stating, “We try and bring an understanding of what write-down you need to take. It takes a while.” At present, Zimbabwe’s Treasury has not issued a formal comment in response to these developments.
For Zimbabwe to regain access to international capital markets and embark on a sustainable economic recovery, coordinated engagement with global creditors — particularly through structured forums like the G-20 and Paris Club — may offer the most pragmatic route forward.
