By Business Reporter
France and the United Kingdom have stepped in to co-chair Zimbabwe’s new Debt Consultative Group (DCG) under the Structured Dialogue Platform, aimed at resolving the country’s US$2.7 billion in bilateral debt arrears—a critical hurdle preventing Zimbabwe from regaining full access to international finance and attracting large-scale investment.
Zimbabwe’s Ministry of Finance views the move as crucial to restoring confidence in the country’s economic reform agenda.
France and the UK, both major members of the Paris Club of creditor nations, are playing an increasingly prominent role in Zimbabwe’s long-running arrears clearance and debt restructuring process, which the government hopes will eventually unlock concessional funding from international financial institutions and restore investor confidence.
Zimbabwe has been in debt default for more than two decades, leaving it largely shut out of international capital markets and concessional lending from institutions such as the International Monetary Fund (IMF), the World Bank and the African Development Bank.
While the country’s total public and publicly guaranteed debt is significantly higher, around US$2.7 billion is owed to bilateral creditors, including France, the UK, Germany, Japan and the United States, making negotiations with Paris Club members a key component of Zimbabwe’s re-engagement strategy.
The renewed diplomatic push comes as Zimbabwe has made progress under an IMF Staff-Monitored Programme (SMP), approved earlier this year after the government committed to tighter fiscal discipline, improved monetary management and governance reforms.
The IMF recently announced that Zimbabwe had successfully completed the first review of the programme after meeting all quantitative targets and structural benchmarks, describing the achievement as an important step towards eventual debt restructuring and arrears clearance.
The UK government has reiterated its support for Zimbabwe’s engagement with international financial institutions, saying it remains an active participant in the Structured Dialogue Platform, which brings together creditors, development partners and Zimbabwean authorities to chart a path towards debt resolution.
According to Britain’s Foreign, Commonwealth and Development Office, officials continue to work closely with the IMF and other stakeholders to support Zimbabwe’s reform agenda and the eventual clearance of its foreign debt arrears.
France has also remained a key bilateral creditor in the negotiations through the Paris Club framework, under which creditor governments coordinate sovereign debt restructuring. The country has participated in similar debt restructuring agreements elsewhere in Africa, including Zambia, highlighting its central role in sovereign debt negotiations.
Economists say clearing Zimbabwe’s arrears would represent one of the most significant milestones for the country’s economy since the turn of the century.
Without access to concessional financing, Zimbabwe has relied heavily on domestic resources and more expensive borrowing to fund development projects, limiting investment in infrastructure, healthcare and education.
The IMF says Zimbabwe’s recent macroeconomic stabilisation—including lower inflation, tighter fiscal management and reforms to the foreign exchange market—has created an opportunity to rebuild confidence among international creditors.
However, it has cautioned that sustained policy discipline and stronger governance reforms will be essential before creditors consider comprehensive debt restructuring.
Finance experts say successful debt restructuring would improve Zimbabwe’s sovereign credit profile, reduce borrowing costs and encourage foreign direct investment by signalling renewed confidence in the country’s economic management.
The arrears clearance process is also expected to pave the way for fresh financing from multilateral lenders, potentially unlocking billions of dollars needed to modernise Zimbabwe’s ageing infrastructure and support long-term economic growth.
Despite the progress, officials acknowledge that debt resolution remains a complex and lengthy process that requires agreement among bilateral creditors, multilateral institutions and the Zimbabwean government before the country can fully re-enter international financial markets.
