Zim enters an uncharted era of stability — Economists

Dr Innocent Matshe Martin Kadzere Zimbabwe has achieved unprecedented economic stability and predictability, providing a firm foundation for sustainable growth and transformation, key stakeholders noted during the Mid-Term Economic Review and High-Level Policy Dialogue in Harare yesterday. Hosted by a local think tank, the Africa Economic Development Studies (AEDS), the forum brought together business executives, policymakers, monetary authorities and Government officials, who emphasised that maintaining discipline was now vital to accelerating investment across all value chains and driving industrialisation. The high-level gathering served as a stock-taking platform for the first six months of the fiscal year, to analyse domestic trends, evaluate independent economic modelling and directly inform Zimbabwe’s forthcoming Mid-Term Fiscal Policy and Monetary Policy review. Zimbabwe has maintained macroeconomic stability since September 2024, anchored primarily by the Zimbabwe Gold (ZiG) currency. The stabilised currency has successfully tamed inflation, bringing it down to single digits, while stabilising the exchange rate and establishing a predictable environment for businesses. Reserve Bank of Zimbabwe (RBZ) deputy governor Dr Innocent Matshe assured delegates at the forum that the central bank remained committed to protecting economic stability gains, ensuring the market retains its newfound predictability. “We will make sure all efforts will be invested and will remain,” he said, pointing to robust macroeconomic fundamentals and a tightening grip on monetary policy. He said the country’s foreign exchange reserves would reach US$2 billion by the end of the year, while maintaining a stable exchange rate and keeping inflation firmly within single digits. The economy is projected to grow by 5 percent this year. While lower than the 8.3 percent growth rate recorded in 2025, he emphasised that Zimbabwe remains one of the fastest-growing economies in the region, making it a prime destination for foreign investment. Dr Matshe said foreign currency reserves reached US$1,6 billion last week, providing roughly 1,5 months of import cover. “Import cover should ideally be between three and six months. We are halfway there,” Dr Matshe said, adding that the central bank expects to achieve a “two times cover” by the end of the year. Addressing economic agents who may be betting on a potential sudden depreciation to devalue their local currency debts, Dr Matshe issued a clear warning: “A lot of us wish for the exchange rate to depreciate so that those loans that we took will be expensed, but it’s not going to happen . . . The era of speculating on currency is over.” Following signs of sustained economic stability, the RBZ lowered its policy rate to 35 percent to support growth, from 35 percent. However, Dr Matshe stressed that the central bank will keep its guard up to ensure the country does not drift backward. “The low levels of annual and month-on-month inflation confirm our policy thrust has effectively eased inflationary pressures and anchored expectations,” he said. Representing Industry and Commerce Minister Mangaliso Ndlovu, acting director (heavy industries) Ms Ruvimbo Sandauke said that with economic stability now secured, current policy frameworks must focus on accelerating industrialisation and growth. Ms Sandauke highlighted various policy interventions currently being implemented by the ministry to drive industrial growth, foster local content, promote industrial transformation, and diversify exports. AEDS board chairman Dr Farai Matanhire said the economy was showing broad-based resilience and despite severe pressures from global geopolitical fragmentation and trade disputes. “In our economy, Zimbabwe is uniquely exposed to the turbulence of global fragmentation,” Dr Matanhire said during his welcome remarks to policymakers and private sector executives. “Escalating trade disputes, shifting alliances, and regional conflicts are no longer distant. They translate into real domestic challenges — volatile commodity prices, disrupted supply chains and constrained access to global financial markets.” Despite these external headwinds, Dr Matanhire highlighted a positive mid-year narrative driven by targeted regulatory changes and decisive monetary policies. He said a primary anchor of the current economic stability was the tight monetary baseline maintained by the central bank. Dr Matanhire also pointed to a series of recent domestic reforms designed to slash sovereign risk and enhance operational certainty for investors, which include the total abolition of trading levies, a temporary freeze on selected mining exploration fees and the complete rollout of a computerised mining cadastre system to manage claims transparently. He underscored that the country’s deliberate policy shift towards domestic value addition — enforced through localised lithium processing facilities and concentrate quotas — is successfully capturing greater local profits from ongoing global supply chain realignments. Economist Mr Brains Muchemwa commended the growing culture of discipline among policymakers, noting that the resulting economic stability is historic and represents a significant departure from previous years. “The economy is in the right direction, expectations are quite positive and there is predictability,” he said. He, however, expressed caution regarding the country’s 40 percent year-on-year money supply growth—arguing it needs to be managed to align more closely with regional peers. Dr Matshe countered that, when comparing Zimbabwe to its neighbours, noting local money supply expansion simply mirrors a rapidly growing economy. He emphasised that despite starting from a low baseline, Zimbabwe is currently the fastest-growing economy in the region, a reality that is naturally reflected in its monetary growth patterns. Capitalising on this stable economic climate, AEDS — in partnership with the Ministry of Industry and Commerce and ZimTrade — is hosting the Zimbabwe Industrialisation Conference and Expo 2026.