World Bank Urges Zimbabwe to Seek G-20 Support in Ending 25-Year Debt Default
Zimbabwe’s best shot at ending its 25-year debt default lies not in going it alone but in formally engaging the Group of 20 nations for a coordinated solution, according to World Bank President Ajay Banga.
Zimbabwe’s best shot at ending its 25-year debt default lies not in going it alone but in formally engaging the Group of 20 nations for a coordinated solution, according to World Bank President Ajay Banga.
The southern African nation, which owes $21 billion to the World Bank and other creditors, has made repeated but largely unsuccessful efforts to regain access to global capital markets, Bloomberg reported.
Past attempts have included using metal-export revenues to pay down debt and, more recently, appealing to 10 countries to help raise $2.6 billion to clear arrears.
“Trying to figure it out on your own, you’ll be doing this for the next five years,” Banga said. “They need to figure out a way to reach out to the G-20 and say, we raise our hand, we’d like to be part of this process.”
Zimbabwe’s external debt surged in the aftermath of a contentious land reform program and decades of economic turbulence.
The southern African nation has been locked out of global financial markets since it first defaulted on World Bank repayments in 2000, according to Bloomberg.
While other countries such as Belarus, Syria, and Eritrea also remain in arrears to the World Bank, Zimbabwe’s default is the most prolonged.
Countries like Zambia, Ghana, and Ethiopia have turned to the G-20’s Common Framework, a debt restructuring initiative launched in 2020, to coordinate negotiations with a wide range of creditors.
While these nations have made headway in reaching agreements, the process has faced criticism for being sluggish and complex.
Zimbabwe, however, is not technically classified as poor enough to qualify for the Common Framework. Still, Sri Lanka, which faces a similar debt profile, approached the G-20 in 2023 to help coordinate its restructuring talks.
