IMF and Zimbabwe reach staff‑level agreement on 10‑month Staff‑Monitored Programme

Southerton Business Times
2 days ago
3 min read

By Staff Reporter — Harare, Zimbabwe

The International Monetary Fund (IMF) and Zimbabwean authorities have reached a staff‑level agreement on a proposed 10‑month Staff‑Monitored Programme (SMP) designed to consolidate macroeconomic stability, strengthen policy credibility, and advance arrears clearance and debt restructuring, IMF team leader Wojciech Maliszewski said after meetings in Harare.

Programme purpose and policy priorities

The proposed SMP aims to consolidate recent stabilisation gains, reinforce fiscal and monetary frameworks, improve foreign exchange market functioning, and advance governance reforms to support stronger and more inclusive growth. The programme is aligned with Zimbabwe’s National Development Strategy 2 (NDS2) and is intended to build a credible track record to support re‑engagement with international creditors.

Wojciech Maliszewski, IMF staff team leader: “The proposed 10‑month programme seeks to consolidate recent stabilisation gains, further strengthen fiscal and monetary policy frameworks, improve foreign exchange market functioning, and advance governance reforms.”

Recent macroeconomic performance and outlook

IMF and Zimbabwean officials highlighted recent improvements in macroeconomic indicators:

Growth: Economic growth strengthened in 2025, outperforming the initial projection of 6.6%, driven by agriculture and mining, supported by high gold prices and recovering platinum and lithium output.
Inflation: Inflation fell to 4.1% in January 2026, helped by exchange‑rate stability and tight monetary policy.
Current account: Projected to remain in surplus at about 3.8% of GDP.
Fiscal stance: The primary fiscal balance is expected to register a small surplus, with the SMP emphasising prudent budget execution and conservative revenue assumptions for the first half of 2026.

Maliszewski cautioned that 76.1% of the economy remains informal, which complicates measurement and policy calibration.

Debt, arrears, and financing context

Zimbabwe’s public debt remains a central challenge. Treasury figures cited total public debt of US$23.4 billion as of September 2025, an 8.5% increase from 2024, largely driven by rising domestic obligations. Bretton Woods institutions reported a slightly different figure of US$23.3 billion as of end‑2024. The SMP is intended to complement the authorities’ broader strategy toward arrears clearance and debt restructuring, helping to create conditions for eventual access to concessional external financing.

Fiscal and public financial management reforms

Key fiscal measures under the SMP include:

Conservative spending in line with a cautious revenue outlook to avoid new domestic arrears.
Strengthened arrears monitoring with regular reporting and clearer institutional responsibilities.
Improved cash planning and short‑term liquidity forecasting to support predictable budget execution.
Longer‑term PFM reforms such as upgrades to budget controls, better capture of commitments, and steps toward a Treasury Single Account.

These measures aim to improve transparency, discipline, and the efficiency of public spending.

Monetary policy and foreign exchange measures

The SMP supports measures to maintain low and stable inflation, preserve gains in the foreign exchange market, and strengthen the monetary policy framework. Planned actions include steps to promote demand for the Zimbabwe Gold (ZiG), enhance monetary operations, and improve FX market efficiency while rebuilding reserve buffers.

Social protection and governance priorities

The programme also backs structural reforms to strengthen governance and fiscal risk management. A priority is the operationalisation of the Zimbabwe Social Registry (ZISO) to improve targeting and delivery of social assistance, ensuring support reaches the most vulnerable households during the adjustment process.

Next steps and conditionality

The SMP is a staff‑level agreement that sets out policy commitments and monitoring benchmarks over the 10 months. Continued progress on reforms, strengthened policy credibility, and improved transparency will be essential to advance discussions with international partners on arrears clearance and debt restructuring modalities in the near term.

IMF Staff‑Monitored Programme Zimbabwe