The African Development Bank has approved a US$4 million grant to support Zimbabwe’s arrears clearance and international re-engagement process through ZACDEP, running from June 2026 to May 2029

The grant is small against Zimbabwe’s US$21.5 billion public debt, yet it carries strategic weight because it funds the institutional process needed to rebuild creditor confidence and reopen access to concessional finance

The approval follows the April 2026 IMF Staff-Monitored Programme, creating a clear sequence: macro discipline first, AfDB-backed dialogue next, then a structured route toward arrears clearance

Harare- The African Development Bank Group has approved a USD 4 million grant to support Zimbabwe’s arrears clearance and international re-engagement efforts through the Zimbabwe Arrears Clearance Dialogue Enhancement Project, known as ZACDEP. The Board of Directors of the AfDB approved the funding, which will be implemented by the Zimbabwean government over a 36-month period running from June 2026 to May 2029.

The grant is provided under the African Development Fund’s Transition Support Facility Pillar III and builds on an earlier intervention, the Support for Arrears Clearance and Governance Enhancement project, approved in 2022, which established the Structured Dialogue Platform that has brought together Zimbabwe’s government, creditors, development partners, civil society organisations, and the private sector to sustain conversation on reforms and debt resolution.

AfDB Country Manager for Zimbabwe, Eyerusalem Fasika, described the approval as a reaffirmation of the bank’s commitment to Zimbabwe’s economic resilience. “Clearing arrears is the gateway to unlocking the development financing the country urgently needs,” she said. The new AfDB President Sidi Ould Tah has also agreed to personally champion Zimbabwe’s arrears clearance and debt resolution process, a level of institutional support that Harare has not previously enjoyed from the bank’s leadership.

Zimbabwe’s Debt Position at End of 2025

Source: African Development Bank, Zimbabwe Treasury

To understand why a USD 4 million grant carries weight disproportionate to its size, it is necessary to understand the scale of what it is designed to unlock. Zimbabwe’s public debt stood at approximately USD 21.5 billion at the end of 2025, including USD 11.7 billion in external debt, of which around USD 7.7 billion is owed to multilateral and bilateral creditors. This burden of arrears has for two decades denied the country access to concessional international financing, crowded out public investment, and functioned as a ceiling on every development ambition the government has articulated. ZACDEP is not designed to repay that debt, but to build the consensus and the roadmap through which repayment might eventually become possible.

The board approval follows the International Monetary Fund Staff-Monitored Programme agreed in April 2026, which is regarded by both Harare and its creditors as the most credible signal yet of macroeconomic discipline. The sequencing is deliberate. IMF programme first, AfDB dialogue project next, structured roadmap toward arrears clearance thereafter. Finance Minister Prof. Mthuli Ncube has described the SMP as coming at a crucial time, underpinned by sustained growth, single-digit inflation and disciplined fiscal and monetary policies.

The AfDB grant is the institutional community’s response to that claim, a measured endorsement, not a blank cheque.

Ncube has been Zimbabwe’s Finance Minister since September 2018, appointed by President Emmerson Mnangagwa as the economic face of the Second Republic’s re-engagement agenda. A holder of a PhD in Mathematical Finance from Cambridge University and a former Vice President of the African Development Bank, he arrived in Treasury with credentials that were intended to signal, both domestically and internationally, a clean break from the fiscal recklessness of the Mugabe era. His record over seven years is one that honest analysis cannot reduce to either outright success or unqualified failure.

On the growth side, the numbers carry genuine weight, though they must be read carefully. Zimbabwe's GDP grew from 1.7% in 2024 to 7.5% in 2025, led by rebounds in agriculture and higher global mining prices. That said, analysts have cautioned that the nominal surge is largely a pricing story, with the GDP deflator multiplying roughly twentyfold since the 2023 base year, meaning the bulk of nominal expansion reflects price effects rather than additional output. On remittances, the Reserve Bank of Zimbabwe's 2026 Monetary Policy Statement confirmed that the diaspora injected USD 2.45 billion into the local economy in 2025, representing a 15.1% contribution to the total foreign currency basket and a 14% increase from the USD 2.152 billion received in 2024. Projections from the 2026 National Budget Statement estimate remittances will reach around USD 2.8 billion in 2026.

A single-digit inflation rate was achieved alongside disciplined fiscal and monetary policies, figures that underpinned Zimbabwe's IMF Staff-Monitored Programme agreed in April 2026.

The Ease of Doing Business reforms under the Presidential Initiative earned recognition from the World Bank, and crucially, the institutional architecture that ZACDEP now builds upon, the Structured Dialogue Platform, the reform working groups, the framework for creditor engagement, was constructed during Ncube’s tenure at Treasury.

But the distribution of costs tells a different story. The Intermediated Money Transfer Tax, the 2% levy on electronic transactions introduced by Ncube in October 2018, was designed to capture revenue from Zimbabwe’s large informal economy. By 2024, it accounted for 8% of ZIMRA’s total revenues, nearly double its earlier share, after the rate on US dollar transactions was doubled. For low-income earners who depend on mobile money for daily transactions, the IMTT became effectively a tax on basic economic participation. Business associations argued consistently that it eroded margins and made Zimbabwean firms uncompetitive with regional peers who faced no equivalent levy.

The income tax-free threshold in the 2025 budget was set at the equivalent of USD 100 per month, leaving workers earning USD 200 a month, already below the official Poverty Datum Line, paying income tax. A study by Equity Axis  found that working poverty had risen above 35%. The Zimbabwe Gold currency, introduced in April 2024 as the country’s sixth attempt at monetary stabilisation since 2008, lost approximately 75% of its value on the parallel market within six months of launch, wiping out savings and making long-term planning in local currency economically irrational.

The government’s own refusal to accept ZiG for passports, fuel, and medical services signalled, louder than any policy document, the limits of its own confidence in the currency it had mandated.

These contradictions are the context in which the AfDB grant must be read. ZACDEP does not resolve them. What it does is create a formal, internationally supervised process through which Zimbabwe must demonstrate, over 36 months, that its reform trajectory is credible enough to justify the debt relief that would actually resolve them. The grant comes with a gender-responsive requirement, acknowledging the disproportionate impact of debt distress on women and young people. It comes with expectations of continued fiscal discipline, monetary stability, and governance reform. It comes, in short, with conditions that are not imposed as political demands but built into the architecture of the dialogue itself.

The AfDB is not the only institution betting on Zimbabwe’s direction. The accession negotiations with the New Development Bank, the BRICS multilateral lender, formally authorised in May 2026, and the USD 1 billion investment commitment by Aliko Dangote’s group signed in November 2025, together describe a country that is attracting institutional and private capital from multiple directions simultaneously. None of these are guarantees. The Dangote commitments remain at memorandum of understanding stage. NDB membership entitles Zimbabwe to apply for financing, not to receive it automatically. And the AfDB’s USD 4 million is a platform for dialogue, not a resolution of the USD 7.7 billion in arrears that dialogue is meant to address.

What has changed, and what the convergence of these developments in the first half of 2026 makes visible, is that Zimbabwe is no longer simply a country making promises about reform. It is a country whose promises are beginning to attract institutional responses. The IMF programme, the AfDB grant, the NDB accession talks, and the return of serious private capital are each, individually, modest steps. Taken together, they suggest that the minimum threshold of credibility, the point at which international institutions are prepared to re-engage rather than simply observe, has been crossed.

Whether that credibility can be converted into the sustained structural transformation that ordinary Zimbabweans require is the question that seven years of Mthulinomics have posed but not yet answered. The debt remains, the currency remains fragile, the tax burden on those least able to carry it remains heavy, and the 16 million Zimbabweans whose daily reality has not yet caught up with the improving macro indicators are watching, as they have always watched, not the numbers in the policy documents but the prices in the market, the wages in their accounts, and the reliability of the institutions that are supposed to serve them.

ZACDEP gives those institutions three more years to make the case. The AfDB has decided that case is worth funding, and the harder work of making it true belongs to Harare.

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