THE African Export-Import Bank (Afreximbank)'s May 2025 country brief on Zimbabwe presents a comprehensive assessment of the nation's economic, political and financial landscapes.
This detailed report offers crucial insights into Zimbabwe's current trajectory while highlighting persistent structural challenges that continue to shape its development path.
The report illuminates Zimbabwe's significant mineral wealth and its position as a key African mining economy, with the sector generating over 60% of export earnings. Gold exports reached US$2,5 billion in 2024, representing a 9% increase from 2023 and highlighting the sector's growth potential.
As the report notes, “Zimbabwe is recognised as one of Africa's leading mineral-rich economies, boasting vast reserves of gold, platinum, diamonds, lithium and coal."
However, this apparent strength masks a fundamental weakness — the dangerous overreliance on mineral exports leaves the economy vulnerable to global commodity price fluctuations and external shocks. The concentration of export earnings in just five products, accounting for more than 80% of total exports, underscores the urgent need for economic diversification.
Zimbabwe's monetary challenges remain particularly acute. The introduction of the gold-backed Zimbabwe Gold (ZiG) currency in April 2024 represented an ambitious attempt to stabilise the economy and control rampant inflation, which had surged to 667,4% in 2023. However, the rapid 43% depreciation of the ZiG within six months of its introduction reveals the persistent structural weaknesses undermining monetary stability. The projected exchange rates of ZiG34 ZiG39 per US dollar in 2025 and 2026 respectively suggest continued currency pressures that could further erode economic confidence.
The fiscal landscape presents equally significant challenges. The deficit's expansion to 7,8% of GDP in 2023 reflects deep-seated issues in public financial management. As the report notes, "subdued revenue collection due to a narrow tax base, excessive public expenditure on wages and subsidies and inflationary pressures" continue to strain government finances. While projections indicate a gradual reduction to 5,1% by 2026, this level remains unsustainable and limits government's ability to invest in critical development projects.
The external debt situation emerges as perhaps the most pressing challenge. At US$14,6 billion in 2024 and projected to reach US$15,5 billion by 2026, the debt burden threatens to suffocate economic growth. The external debt-to-exports ratio of 185,3% exceeds sustainable thresholds, while the staggering debt service-to-revenue ratio of 53,4% severely constrains fiscal flexibility. This debt distress situation demands urgent attention and comprehensive restructuring efforts.
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The political environment following President Emmerson Mnangagwa's contested 2023 re-election with 52,6% of the vote adds another layer of complexity.
While the administration has prioritised economic stabilisation policies and international re-engagement, persistent governance challenges continue to undermine investor confidence.
The political landscape reveals growing urban-rural divisions and increasing youth activism that could shape future stability.
One notable bright spot emerges in Zimbabwe's regional trade integration. The country's intra-African trade level of 52,6% significantly exceeds the regional average of 14,7%, demonstrating strong regional economic ties. However, the heavy concentration of this trade with South Africa, which accounts for 77% of regional exports, suggests the need for broader regional diversification to reduce vulnerability to single-market dependence.
The financial sector displays remarkable resilience amid these challenges. Banking sector assets have grown significantly, with non-performing loans at a manageable 2,09%. However, this apparent strength must be viewed cautiously against the backdrop of broader economic instability and currency challenges. The sector's true test lies in its ability to support economic transformation while maintaining stability.
The country requires a comprehensive transformation of its economic structure. The government must prioritise export diversification beyond minerals, strengthen domestic revenue mobilisation through systematic tax reforms and implement credible debt management strategies. Enhancing governance frameworks to boost investor confidence and developing value-addition capabilities in mining and agriculture are equally crucial.
The country's abundant natural resources, a relatively educated workforce, and strategic geographic position provide a foundation for economic revival. However, realising this potential requires addressing fundamental challenges in fiscal management, monetary policy and economic diversification.
The government's ability to maintain policy consistency, improve governance and implement meaningful reforms will determine whether Zimbabwe can transform its considerable potential into sustainable economic growth and development.
The choices made in addressing these structural challenges while leveraging on existing strengths will shape the nation's economic trajectory for years to come.
Success requires not just technical solutions but political will, policy consistency and a long-term vision for inclusive economic transformation.
