By Dickson Bandera
The World Bank says Zimbabwe is steadily moving toward economic recovery, citing strong reforms, improved stability, and solid sectoral performance that have positioned the country for accelerated growth in 2025.
Presenting the Zimbabwe Economic Update: Fostering a Business-Enabling Regulatory Environment for Private Sector report in Harare on 2 December 2025, the institution noted that ongoing government reforms and improved macroeconomic management are driving renewed confidence across key sectors — agriculture, mining, manufacturing, and services.
According to the report, Zimbabwe’s GDP is projected to grow by 6.6% in 2025, outperforming many economies in Sub-Saharan Africa. The recovery is being anchored by robust agricultural output, rising services activity, and continued investments in mining and steel production.
Medium-term growth is expected to remain strong at 5% in 2026, although the World Bank warned of risks from fiscal slippages, climate-induced shocks, and external vulnerabilities.
The Bank commended government efforts to restore macroeconomic stability, noting that tight monetary policy since late 2024 has helped tame inflation and stabilize the Zimbabwe Gold (ZiG) currency. Inflation is forecast to fall to single digits in 2026 and reach 5% in the medium term, significantly improving consumer and investor confidence.
While poverty levels are expected to decline as growth strengthens, the report cautions that rural households remain highly vulnerable due to dependence on rain-fed agriculture, limited off-farm employment, and inadequate social protection systems.
“Now that the macroeconomy is improving, the Government’s position in re-prioritizing efforts to improve the ease of doing business to improve Zimbabwe’s private sector growth and competitiveness are more than necessary to enhance the overall growth and eventually translate economic growth into lasting economic benefits,” said Victor Steenbergen, the World Bank’s Senior Country Economist for Zimbabwe.
Recommendations for Sustaining Growth
The Zimbabwe Economic Update outlines several policy recommendations aimed at safeguarding current gains and stimulating further momentum:
Full implementation of the Economic Reforms Matrix under the Structured Dialogue Platform (SDP), which is key to arrears clearance, debt resolution, and unlocking affordable external credit.
Maintaining price and exchange rate stability, which the Bank says is essential for investment, job creation, and sustaining the current economic rebound.
Strengthening the Presidential Ease of Doing Business Initiative, to streamline regulations, attract investment, and drive private sector-led growth.
Regulatory Burdens Still Heavy
A special section of the ZEU focusing on the business regulatory environment revealed substantial compliance burdens across agriculture, agro-processing, and tourism. Some subsectors face up to 28 separate legal and regulatory requirements, spread across numerous ministries and agencies.
The report highlights three major constraints:
High and often regressive fees, in some cases exceeding annual revenues for SMEs.
Poor transparency and reliance on manual, paper-based processes, requiring time-consuming physical visits to government offices.
Overlapping mandates, where multiple agencies impose similar requirements, increasing costs for minimal policy benefit.
Despite these challenges, the World Bank acknowledged progress made under the Presidential Ease of Doing Business initiative. The first phase, completed in September 2025, led to the reduction or removal of several fees in the beef, dairy, stockfeed, and tourism sectors.
The Bank urged the Government to finalize regulatory simplification across 12 priority sectors within the next year and to adopt a more ambitious medium-term agenda based on three pillars: transparency, simplification, and governance.
These include establishing a public registry of licensing and fee requirements, consolidating overlapping regulations, and strengthening institutional oversight to ensure that regulatory frameworks support economic development rather than institutional revenue collection.
The World Bank says comprehensive reforms, combined with sustained economic stability, will be crucial in translating Zimbabwe’s current growth momentum into long-term, inclusive development.
