Zimbabwe Seeks to Privatise State-Owned Enterprise...

Zimbabwe Seeks to Privatise State-Owned Enterprises to Tackle Soaring Debt

Gilbert Munetsi

Zim Now Writer

Zimbabwe is accelerating efforts to privatise several state-owned enterprises in a bid to reduce its mounting public debt, which has surpassed US$21 billion—nearly 90% of the country’s GDP.

The rising debt burden threatens economic growth and fiscal stability, prompting urgent intervention from the government.

The country's major creditors include the World Bank, the African Development Bank, and members of both the Paris and non-Paris Clubs. Years of extensive borrowing, coupled with interest payments outpacing economic growth, have exacerbated the crisis.

Speaking at the recent launch of the National Venture Capital Company of Zimbabwe, Finance Minister Mthuli Ncube confirmed that the government is actively identifying assets for sale to address the debt challenge.

“We are evaluating which assets should be considered for privatization. It’s a work in progress, and when the right opportunities arise, we will move forward with strategic divestments,” Ncube said.

He also highlighted concerns over Zimbabwe’s economic growth rate, which currently averages around 6%, lagging behind the country’s rising interest obligations. “This discrepancy means our debt will continue to rise, making restructuring essential to prevent further accumulation,” he added.

Ncube called on stakeholders—including the private sector, civil society, and development partners—to recognize the debt crisis as a national issue rather than solely a government responsibility.

Last year, the government initiated high-level debt resolution dialogues led by African Development Bank (AfDB) President Akinwumi Adesina and former Mozambican President Joaquim Chissano. However, delays in implementing key governance reforms, necessary for arrears clearance and debt resolution, have hindered progress.

Economist Gift Mugano cautioned that Zimbabwe’s rising debt, coupled with limited repayment capacity, could lead to a full-scale fiscal crisis if not addressed urgently. “The slow pace of governance reforms risks further isolating Zimbabwe from international financial support. Immediate debt restructuring or forgiveness is crucial to avert an economic catastrophe,” he warned.

Zimbabwe has long struggled with a heavy debt burden, balancing both domestic and external obligations. The nation’s outstanding liabilities—comprising loans from international institutions, private creditors, and bilateral lenders—continue to strain economic performance. While debt relief negotiations and restructuring efforts are ongoing, the looming risk of default remains a critical concern for policymakers and investors alike.