ZIMBABWE’S much-touted economic calm is not earned but dangerously engineered, three leading economists said this week, warning that tight monetary controls have choked business growth while the country bleeds skills and public infrastructure crumbles.
Their remarks resonated with concerns recently raised by leading bankers, who challenged the central bank’s tight monetary regime, arguing it has strangled credit growth, slowed economic activity and even pushed some companies into corporate rescue.
The Reserve Bank of Zimbabwe (RBZ) has maintained its hawkish monetary stance since 2024, helping stabilise the exchange rate and contain an inflationary surge that had battered markets since 2019.
Armies of cash barons, who once roamed the streets with bags of money to trade on a black market estimated at one point at US$2,5 billion, retreated as the policy took effect, restoring order on the monetary front.
But in a market where direct criticism of policy is often muted, senior bankers used the release of financial statements for the year-ended December 31, 2025, to break an unusually firm silence, warning that prolonged policy tightening had overstretched the financial system, which is now operating under severe liquidity strain.
Inflation has eased to 4,8% and the Zimbabwe Gold (ZiG) has held steady at around US$1:ZiG25. Yet beneath those headline gains, analysts said the economy remains vulnerable, propped up by intervention and exposed to volatile external forces.
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“The system is fragile,” said Tony Hawkins, professor of economics at the University of Zimbabwe’s Graduate School of Management. “It relies on strong positive external influences that are very volatile — commodity prices, including oil.”
Hawkins said the economy was “highly uncompetitive” after decades of high inflation, subdued investment and a brain drain that has hollowed out skilled labour. Manufacturing is struggling even as mining prospers, he noted.
“Policy ignores fundamentals: skills exodus, youth unemployment, collapse of state education and health infrastructure.”
Chenayimoyo Mutambasere, a development economist at the Africa Centre for Economic Justice, said the current stability should be viewed as “managed” rather than structural.
“The relative exchange rate and inflation stability we have seen in recent months has been achieved primarily through tight monetary controls, restrictions on liquidity, high interest rates, and foreign currency management measures by the Reserve Bank,” Mutambasere said.
“The economy also remains heavily dependent on commodity exports, diaspora remittances and the informal sector.
“These are not sufficiently stable foundations for long-term resilience. Therefore, current stability should be viewed as ‘managed’ stability.”
She pointed to a key contradiction in the latest budget figures: government arrears of US$1,3 billion owed to domestic service providers.
“This is contrary to the stability claims,” she said. For ordinary Zimbabweans and businesses, the cost of this “artificial” calm has been brutal, as the year heads into the second half.
Tight liquidity, high interest rates and restricted credit have crushed consumer spending power. Retailers such as OK Zimbabwe are struggling to stay afloat.
“Stability without growth can become economically stagnant,” Mutambasere said. “This is the Zimbabwean reality.”
She said small and medium enterprises, in particular, face serious financing challenges. Borrowing costs remain prohibitive, while limited liquidity in the market reduces transaction volumes and slows economic activity.
Nyasha Chasakara, an investment banker and founder of Solarpro Zimbabwe, said the economy was showing signs of stabilisation at the macro level, but businesses were suffocating.
“Many businesses and households are still feeling a liquidity squeeze at the transaction level,” he said in one of his writings.
On paper, the outlook is not entirely negative, he noted. The International Monetary Fund (IMF) projects Zimbabwe’s real GDP growth at 5% in 2026, with projected consumer price inflation of 8%.
The IMF has also approved a 10-month Staff-Monitored Programme aimed at consolidating stabilisation gains, strengthening macroeconomic management, improving cash and expenditure controls and supporting re-engagement efforts.
All this is positive and, for an economy that is rebuilding, it is encouraging to see investment numbers rising, Chasakara said.
According to the Zimbabwe Investment and Development Agency’s latest report, the country secured US$1,4 billion in investment commitments during the first quarter of 2026, engaging 162 potential investors.
Energy and infrastructure led investment interest, with significant contributions from local asset managers and development finance institutions.
Local capital allocation is moving away from traditional money markets and stocks towards projects, which is positive for the economy.
“For business people, however, the lived reality is more complicated. Customers are cautious. Sales cycles are longer,” he wrote.
“Even where prices are reduced, buyers are delaying decisions. The economy may be stabilising, but cash is not yet moving freely across households, SMEs and informal trading networks.”
However, not all economists share the same view. Tapiwa Mashakada, executive director of the Maji-Marefu Institute of Economic Governance, argued that the current stability reflects underlying structural gains supported by government policy.
“A tight fiscal and monetary policy regime has resulted in low inflation, a stable local currency, and a less volatile exchange rate,” Mashakada said. “Under a dollarised economy, tight monetary policy has created the necessary stability for growth.”
But Hawkins and Mutambasere cautioned that without deeper reforms spanning governance, investment and industrial capacity, Zimbabwe’s stability risks proving short-lived.
In financial statements for the year-ended December 31, 2025, bank CEOs and chairpersons said current restrictions were affecting the economy.
NMB Holdings chairman Pearson Gowero said upheaval in key sectors had been amplified by the liquidity crisis.
“Notwithstanding these positive developments, some sectors of the economy continued to experience adjustment pressures,” Gowero said.
“The retail and manufacturing sectors, in particular, operated below optimal capacity during the year, with several businesses entering corporate rescue as they navigated structural and liquidity challenges,” he added.
AFC Holdings chairman James Prince Mutizwa also warned about tightening liquidity conditions.
“The measures implemented by the monetary authorities also led to a significant liquidity crunch, creating a challenging environment for financial institutions seeking funding in both domestic and international markets,” he said.
FBC Holdings chairman Herbert Nkala was more forthright.
“The downside, however, is the current tight monetary and fiscal policy stance. Funding constraints continue to limit the industry’s ability to carry out its financial intermediation role,” he said.
FBC group chief executive officer Trynos Kufazvinei said the operating environment had become structurally restrictive.
“The operating landscape is constrained by high interest rates, statutory reserve requirements and limited long-term funding, all of which suppress lending activity and balance sheet expansion,” he said.
“This environment requires agility, business model adaptation, digital transformation, cost efficiency and revenue diversification.”
At headline level, the sector’s profit rebound masks deep unevenness. Several banks, including NMB and Crown Bank, swung from losses in 2024 to profits in 2025, while large institutions such as CBZ, Stanbic and CABS continued to dominate earnings. Others, including ZB Bank, saw profits fall despite remaining in positive territory.
But the more revealing metric is total comprehensive income, which declined across most of the ten banks in 2025.
A widening gap between institutions is also emerging. Large, well-capitalised banks continue to dominate system profits, while mid-tier lenders show more uneven performance, reflecting differences in access to funding, scale efficiencies and risk buffers.
ZB Financial Holdings said policy stability had come at a cost to the economy.
“The relative stability reflects the RBZ’s tight monetary policy stance … while these measures supported currency stability, they also constrained credit growth, limiting the banks’ lending capacity.”
It warned that broader structural weaknesses were compounding pressure:
“Foreign currency shortages, energy supply challenges and infrastructure gaps may weigh on economic expansion.”
Despite these constraints, the economy grew 6,6% in 2025, while exchange rates remained relatively stable, with the parallel market premium narrowing from 35% to around 20%.
In emailed responses to the Independent recently, RBZ governor John Mushayavanhu said: “The Reserve Bank of Zimbabwe has been monitoring and carefully calibrating market liquidity to manage inflationary pressures without compromising the economic growth prospects.”
“In this context, the market has remained long with daily overall liquidity in excess of ZiG3,4 billion. Most of the liquidity is held in non-negotiable certificates of deposit arising from banks’ excess liquidity positions. We have observed a challenge where banks with excess liquidity are reluctant to trade with banks in deficit, thereby creating an artificial liquidity shortage,” he said.
For the banking sector, the message from 2025 was clear: profits have returned, but growth remains hostage to liquidity constraints that continue to define Zimbabwe’s financial cycle.