Zimbabwe is seeking significant reductions in the debt amounts owed to its creditors, which total $19.2 billion, as part of its efforts to restructure arrears that are burdening the economy.

“We will be looking for lots of haircuts, the removal of penalties,” stated the country’s Finance Minister Mthuli Ncube during an interview on the sidelines of the African Development Bank annual meetings in Nairobi. “We are looking for very deep haircuts.

At the end of last year, Zimbabwe’s debt amounted to $19.2 billion, according to Ncube. 

Out of this amount, the country owes $13 billion to external creditors and $6.2 billion to domestic investors. 

Whereas according to previous data published by Zimbabwe’s Treasury, the figure stood at $18 billion.

“Zimbabwe is currently in debt distress due to the accumulation of external debt-payment arrears amounting to $6.7 billion. The external-debt overhang is weighing heavily on the country’s development needs due to lack of access to international financial resources to finance Zimbabwe’s economic recovery,” the minister went on to say.

Since defaulting on its debt in 1999, Zimbabwe has been excluded from international capital markets. Its external creditors include the Paris Club, the World Bank, the European Investment Bank, and the African Development Bank.

According to Ncube, the nation’s five largest Paris Club creditors—Germany, France, the UK, Japan, and the US—are collectively owed $3.1 billion.

Earlier this year, the US withdrew from talks that got underway in 2022. Relations between Washington and Harare, which have been strained for years, remain tense after the US maintained sanctions on Zimbabwean President Emmerson Mnangagwa in March, New Zimbabwe reports.

Moreover, the government plans to continue making quarterly token payments to international financial institutions as a demonstration of its commitment, according to Ncube.

Since these symbolic remittances began in 2021, Zimbabwe has cumulatively paid $70 million to the World Bank, $37.4 million to the AfDB, and $5.6 million to the EIB.

“Government is also making quarterly token payments of $100,000 to each of the 16 Paris Club bilateral creditors. Cumulative token payments made to date are $12.7 million,” said the minister.