STAFF WRITER
The Zimbabwe Stock Exchange (ZSE), once a magnet of offshore capital, is reeling from a steep fall in foreign investor participation, with the level plunging to just only 15%, a dramatic decline from the 40% recorded during the dollarisation era.
The Securities and Exchange Commission of Zimbabwe (SECZim), the country’s capital markets regular, has raised alarm, calling for urgent re-engagement with both local and offshore investors to halt the freefall in market confidence and liquidity.
The sharp retreat by foreign capital is the clearest signal yet of a confidence crisis in Zimbabwe’s financial markets, with the regulator conceding that investor trust has been eroded by years of policy inconsistency, macroeconomic instability, and persistent exchange control measures.
SECZim chief executive Anymore Taruvinga, said Zimbabwe was fast losing its competitive edge and investor appeal, urging collective market action to reverse the trend.
“If you look at our history, during dollarisation, we had about 40% participation by foreign investors. We’re now down to 15%. We’ve lost ground,” Taruvinga said.
“This is why I’m calling for re-engagement. We need to sell Zimbabwe as an investment destination — regulators, the exchange, brokers, all of us need to get involved.”
Taruvinga said the plunge in foreign interest has also dragged down domestic participation, with confidence among retail investors having taken a knock following past experiences of hyperinflation and loss of value. Retail activity on the local bourse has now slumped to just 1%, down from a 2–3% range before dollarisation.
He added that asset managers, too, are shifting away from listed equities.
SECZim data shows that exposure by local asset managers to listed shares has dropped from 61% in 2020 to 29% by the first quarter of 2025. During the same period, allocations to property have increased from 32% to 48%, signalling a growing preference for tangible assets over volatile equities.
Taruvinga noted that competition for capital is intensifying on both global and domestic fronts, making it even more urgent to rebuild investor confidence. He cited perceptions, high transaction costs, and lack of market awareness as major barriers that must be urgently addressed if Zimbabwe hopes to recover its lost market share.
Liquidity on the ZSE, he said, has become severely constrained due to waning investor activity. With both foreign and domestic players on the sidelines, market turnover has slowed significantly. “Liquidity comes from investors,” Taruvinga said.
“And without their participation, there is very little trading taking place. We must re-engage meaningfully and demonstrate that we have a credible, attractive investment product.”
Market analyst and equities dealer Enock Rukarwa believes the situation has been exacerbated by the introduction of the new currency, the Zimbabwe Gold (ZWG), and contractionary monetary measures that have depressed stock market activity. He said that although the ZSE previously served as a hedge against inflation and currency volatility, recent reforms have shaken investor sentiment.
“In the last decade, the ZSE provided refuge from value erosion,” Rukarwa said.
“But since the introduction of the ZWG and tight monetary policies, we’ve seen liquidity dry up and bearish sentiment creep in. The decline in foreign participation isn’t just a Zimbabwe problem — it’s part of broader systemic issues. But for Zimbabwe, policy inconsistency, exchange controls, and country risk have become real deterrents.”
He added that while blue-chip counters continue to pay dividends — some in US dollars — this has only slightly cushioned negative returns. However, current price corrections have opened buying opportunities for medium to long-term investors, with quality stocks now trading at steep discounts.
ZSE chief executive officer Justin Bgoni acknowledged the decline in foreign interest but said there are early signs of recovery.
“This trend has been ongoing for years,” Bgoni said.
“But we’re starting to see a shift. The initiatives we’ve undertaken are working, and foreign participation is picking up again.”
He explained that the migration of some companies from the ZSE to the Victoria Falls Stock Exchange (VFEX), which allows hard currency trading, was largely driven by issuer strategy rather than a loss of confidence in the ZSE. Many of the firms, he said, are seeking to raise capital in US dollars or tap into offshore investor bases.
“This does not reflect negatively on the ZSE,” Bgoni said.
“It simply shows that issuers are adjusting to a changing economic environment. In fact, the ZSE has continued to see new listings during this period, which proves its relevance.”
He emphasised that the exchange remains a critical capital-raising platform and continues to offer value to both investors and issuers. The ZSE now provides a wider range of instruments, including equities, exchange-traded funds (ETFs), and real estate investment trusts (REITs), and has made progress in modernising its trading systems.
“The ZSE remains one of the top-performing markets in the region,” Bgoni said.
“We’ve improved market data availability, introduced innovative products, and created a more responsive environment for both retail and institutional investors. But the growth of any exchange is not the responsibility of the bourse alone. It requires a collective push across the ecosystem.”
Despite these efforts, analysts agree that restoring confidence in the ZSE will demand bold reforms and consistent messaging from both the government and regulators. Without that, foreign capital will continue to seek safer havens, and Zimbabwe’s main exchange risks sliding further into obscurity.
Taruvinga summed up the gravity of the moment: “We need to show the world — and our own citizens — that Zimbabwe’s market can deliver value. Re-engagement is not optional. It’s a necessity.”