Harare,— The International Monetary Fund and the Government of Zimbabwe have reached a staff-level agreement on a new 10-month Staff-Monitored Programme (SMP), marking a significant step in efforts to consolidate recent macroeconomic stabilisation gains and advance the country’s re-engagement with international creditors.
The agreement follows IMF mission discussions held in Harare between January 28 and February 6, led by Mr Wojciech Maliszewski, and is subject to approval by IMF management. As a staff-monitored arrangement, the programme will not be presented to the IMF Executive Board but will serve as a benchmark for assessing Zimbabwe’s policy performance and reform credibility.
Zimbabwe’s Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube, said the timing of the agreement was critical, coming amid sustained economic growth and improving macroeconomic stability. Officials said recent progress had strengthened the foundations for a credible reform programme.
Growth and Inflation Gains
According to the IMF, Zimbabwe’s economic recovery strengthened in 2025, with growth exceeding the initial projection of 6.6 per cent, supported by solid performances in agriculture and mining. High gold prices, alongside recovering platinum and lithium output, underpinned export earnings and overall economic momentum.
Inflation fell sharply to 4.1 per cent in January 2026, returning to single digits amid exchange rate stability and tight monetary conditions. Fiscal revenues also improved during 2025, supported by enhanced tax administration and new revenue measures, narrowing the fiscal deficit and delivering a small primary surplus.
Looking ahead, the IMF projects economic growth of around 5 per cent in 2026, driven by continued strength in agriculture and mining. Inflation is expected to remain in single digits, while the current account balance is forecast to stay in surplus at approximately 3.8 per cent of gross domestic product. The primary fiscal balance is projected to record a surplus of about 0.5 per cent of GDP.
Policy Priorities Under the Programme
The proposed SMP focuses on reinforcing prudent budget execution, improving cash and expenditure controls, sustaining monetary discipline, and advancing governance reforms to enhance transparency and manage fiscal risks. It also supports the authorities’ social protection agenda.
Under the programme, government spending in the first half of 2026 will be anchored on a conservative revenue outlook, in line with the approved budget. This is intended to ensure expenditure remains aligned with available resources and to prevent the accumulation of new domestic arrears. Authorities have committed to strengthening domestic arrears monitoring through regular reporting and clearer institutional responsibilities.
Improving cash planning and public financial management will be a key pillar of the programme. Measures include enhanced liquidity forecasting, stronger cash management arrangements, and gradual implementation of broader public financial management reforms. These include improved budget controls, better capture of spending commitments, and progress towards a Treasury Single Account to strengthen fiscal discipline and transparency.
Monetary and Exchange Rate Reforms
The SMP also seeks to entrench low and stable inflation and preserve recent improvements in the foreign exchange market. The IMF said the programme would help lay the groundwork for further strengthening the monetary policy framework, including measures to promote demand for the ZiG currency, improve monetary operations, and enhance the efficiency of the foreign exchange market.
Building confidence in the ZiG and rebuilding reserve buffers were identified as important medium-term objectives to support macroeconomic stability and sustained growth.
Governance and Social Protection
Structural reforms to strengthen governance and manage fiscal risks form another core component of the programme. Following the publication of its inaugural financial statement, the Mutapa Investment Fund is expected to enhance transparency by publishing audited financial statements for all state-owned enterprises under its portfolio, in line with the Public Financial Management Act. The fund has also committed to refraining from contracting debt without prior written approval from the Ministry of Finance.
On the social front, the programme supports efforts to strengthen social protection systems. Authorities plan to fully operationalise the Zimbabwe Social Registry to improve the targeting and delivery of social assistance, ensuring support reaches the most vulnerable households.
Re-engagement and Debt Resolution
The IMF said the SMP is designed to help Zimbabwe build a credible track record of reforms as part of its broader strategy to re-engage with the international community on arrears clearance and debt restructuring under the Structured Dialogue Platform.
“Continued progress on reforms, together with strengthened policy credibility and improved transparency, would help lay the groundwork for more substantive discussions with international partners on arrears-clearance and debt restructuring modalities in the near term,” Mr Maliszewski said.
The IMF team expressed appreciation to the Zimbabwean authorities for what it described as constructive dialogue and strong cooperation, adding that it looked forward to continued engagement as the authorities implement the agreed reform agenda.
