Zimbabwe is expected to see its economy grow by 6.6 percent, according to the latest Zimbabwe Economic Update (ZEU) released by the World Bank Group. The growth is driven mainly by improvements in agriculture, iron and steel manufacturing, and services sectors, positioning Zimbabwe ahead of many countries in Sub-Saharan Africa.
The ZEU report notes that Zimbabwe’s external position remains stable, supported by mineral exports and remittances which help maintain a modest current-account surplus. While there has been some progress with a narrowing fiscal deficit, challenges remain due to high financing needs and persistent debt-service pressures resulting from unsustainable public debt and outstanding external arrears. Although poverty rates are expected to decrease as the economy recovers, many rural households remain vulnerable because of their reliance on rain-fed agriculture, limited off-farm job opportunities, and insufficient social protection measures.
“Zimbabwe has made encouraging progress toward macroeconomic stabilization,” said Eneida Fernandes, World Bank Group Country Manager for Zimbabwe. “Sustained policy consistency that anchors inflation, strengthens fiscal discipline, and advances arrears resolution will be critical to attract investment, create jobs, and support vulnerable households.”
The report recommends keeping monetary policy tight and coordinated to control inflation and stabilize the exchange rate. It also suggests transparent budgeting for all public operations while avoiding quasi-fiscal activities. Other recommendations include improving cash management practices and strengthening controls over government commitments. Fiscal consolidation should continue but priority investments and targeted social protections must be safeguarded. To boost domestic revenue collection, the report calls for rationalizing tax expenditures as well as improving taxation in mining and property sectors; it also urges implementation of an arrears strategy with greater transparency about debt levels.
A special chapter in the ZEU highlights issues within Zimbabwe’s business environment such as complex regulations, para-fiscal fees, and fragmented service delivery—all factors that increase compliance costs especially for small businesses. These challenges can discourage formalization of enterprises as well as investment and job creation efforts. The report outlines a reform agenda centered on increasing transparency through a public registry of licenses, fees, inspections; simplifying regulatory processes via digitalization; and enhancing institutional accountability.
“Zimbabwe’s economic reform agenda is now bearing fruit, and I believe that the Ease of Doing Business reforms will make a significant contribution to sustainable growth going forward,” said Hon.Mthuli Ncube, Minister of Finance, Economic Development, and Investment Promotion.
Recent regulatory reforms under the Presidential Ease of Doing Business Initiative have been recognized by the ZEU report as notable steps forward. The report recommends further action including promoting transparency through public registries related to licensing requirements; simplifying processes through digitization; reducing overlaps in inspection procedures; lowering costs for businesses; enabling more efficient allocation of regulatory resources; and reinforcing central oversight so institutional mandates align with serving public interests rather than just generating revenue.