• IMF and Zimbabwe reach agreement on a 10-month staff-monitored program
• Program focuses on fiscal discipline, monetary stability, and governance reforms
• Recent gains include lower inflation, stronger growth, and higher reserves

The International Monetary Fund announced on Feb. 6 t it has reached a staff-level agreement with Zimbabwe to help the country implement new reforms and consolidate recent progress in stabilizing the economy.

“We are pleased to announce that the Zimbabwean authorities and the IMF team have reached a staff-level agreement on the key economic policies and reforms that could underpin a Staff-Monitored Program (SMP), as outlined in the National Development Strategy 2 (NDS2),” Wojciech Maliszewski, head of the IMF mission that held talks with authorities in Harare from January 28 to February 6, said in a statement.

A staff-monitored program is an informal arrangement between a member country and IMF staff under which the Fund monitors the implementation of a national economic reform program. Because these arrangements are informal, they generally do not require approval by the IMF’s Executive Board and do not involve financial assistance. Such programs may be put in place when a member country is not yet able to implement a financially supported IMF program due to weak institutional capacity, domestic instability, or insufficient financing assurances.

In these circumstances, staff-monitored programs can help a country build a track record of policy implementation. If successful, they can lay the groundwork for a financing arrangement or help restore a derailed program. In some cases, they can also pave the way for repeated use of the IMF’s emergency assistance.

Hit by a severe economic crisis since the late 1990s, Zimbabwe has previously entered into several staff-monitored programs with the IMF. The most recent one was launched in May 2019 but was abandoned after the country failed to comply with the institution’s recommendations. The newly proposed program, which is expected to run for 10 months, aims to consolidate recent progress in economic stabilization, further strengthen fiscal and monetary policy frameworks, improve the functioning of the foreign exchange market, and advance governance reforms to support stronger and more inclusive growth.

“The program emphasizes prudent budget execution, improved cash and expenditure controls, sustained monetary discipline, and governance reforms to enhance transparency and manage fiscal risks. It also supports the authorities’ social protection efforts,” the IMF said, adding that the planned reforms would help advance Zimbabwe’s reengagement with the international community, particularly on arrears clearance and debt restructuring.

Notable progress in macroeconomic management

As noted above, Zimbabwe has faced a deep economic crisis since the land reform launched in the late 1990s by former President Robert Mugabe. The reform, which led to the eviction of around 4,500 large white landowners in favor of Black farmers, triggered a sharp collapse in agricultural output and trade. Harare subsequently halted repayment of nearly $13 billion owed to the World Bank, the African Development Bank, the European Investment Bank, and Paris Club member countries.

The expropriation of white farmers also discouraged foreign investment and caused exports to fall sharply, prompting Mugabe to resort to large-scale money printing. This led to a prolonged period of hyperinflation and, in 2009, the abandonment of the national currency, the Zimbabwean dollar, in favor of the U.S. dollar. Still cut off from international lenders, the southern African country struggled to secure new credit lines and attract the foreign investment needed to revive its economy.

In February 2025, the IMF conditioned any financial support on “a comprehensive restructuring of external debt, including arrears clearance and a compatible reform plan,” while stating that it would continue to provide policy advice and technical assistance to the government, notably on revenue mobilization, expenditure control, financial supervision, and economic governance.

Zimbabwe’s finance ministry reported in late January 2026 progress in macroeconomic management, including a drop in inflation below 10% for the first time since 1997 and an increase in foreign exchange reserves backing the new gold-backed currency, Zimbabwe Gold (ZiG), to more than $1.2 billion. It attributed these indicators to “strict fiscal discipline and a monetary policy coordinated with the Reserve Bank of Zimbabwe.”

The IMF highlighted these gains in its statement announcing the agreement on the new staff-monitored program. It said growth strengthened in 2025, exceeding the initial forecast of 6.6%, supported by strong performance in the agriculture and mining sectors. Inflation fell to 4.1% in January 2026, helped by exchange rate stability and tight monetary conditions. Tax revenues also increased in 2025, supported by improved tax administration and new measures.

The Fund said continued efforts would help consolidate stability, strengthen confidence in the ZiG, improve the functioning of the foreign exchange market, support the rebuilding of foreign exchange reserves, and reinforce the policy and institutional foundations for sustainable and broad-based growth.

Walid Kéfi