Zimbabwe’s economy is expected to grow by 6.6% this year outpacing much of Sub-Saharan Africa as a recovery in agriculture, iron and steel production and services gathers pace according to the latest Zimbabwe Economic Update (ZEU) released on Tuesday.
The sixth edition of the report highlights a rebound in output, slowing inflation and a cautiously improving outlook.
But it also stresses that lasting stability will depend on consistent policies to strengthen the business environment, boost private investment and create jobs.
The update Fostering a Business-Enabling Regulatory Environment for Private Sector Growth says Zimbabwe’s external position remains relatively stable, supported by mineral exports and remittances that have helped keep the current account in surplus.
While the fiscal deficit has narrowed, the country’s financing needs remain elevated with debt-service pressures reflecting unsustainable public debt and outstanding external arrears.
Poverty levels are projected to fall gradually as the economy recovers but the report warns that households particularly in rural areas remain highly vulnerable to weather shocks, inflation and limited social protection.
“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.”
To sustain stability, the World Bank recommends a tight and coordinated monetary policy to keep inflation on a downward trajectory and support exchange-rate stability.
It also calls for transparent financing of public operations through the national budget avoiding quasi-fiscal activities and improving cash-flow management and spending controls.
The report urges further fiscal consolidation while protecting essential investments and targeted social protection programmes.
It also recommends raising domestic revenue by rationalising tax exemptions and strengthening mining and property taxation alongside implementing an arrears strategy to improve debt transparency and risk management.
A dedicated chapter examines Zimbabwe’s business environment, warning that regulatory complexity, para-fiscal fees and fragmented service delivery increase compliance costs particularly for small firms and discourage formalisation, investment and job creation.
The authors outline reforms centred on transparency, digitalisation and stronger 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 Mthuli Ncube, Minister of Finance, Economic Development, and Investment Promotion.
The report notes recent progress under the Presidential Ease of Doing Business Initiative but says further steps are needed.
It recommends publishing a public registry of all licences, fees and inspections to reduce uncertainty, simplifying and digitalising processes to cut duplication and strengthening oversight to ensure regulatory bodies serve the public interest rather than institutional revenue goals.
