Zim poised to attract massive FDI
BUSINESS REPORTER
Zimbabwe’s exit from the fragility classification is expected to strengthen the country’s international standing and reinforce the positive narrative around its economic and institutional reform trajectory as well as attract foreign direct investments and investors, Business Times can report.
The reclassification comes after the World Bank removed Zimbabwe from its fragile and conflict-affected economies classification, effective July 1 2026 following the country’s prudent policies and strong economic growth as well as strong governance.
Several economists said this development will improve international perceptions of Zimbabwe’s institutional and investment risk.
Economist Enock Rukarwa told this publication that the reclassification reflects improving economic stability and institutional resilience, citing 8.3% GDP growth in 2025, ZiG inflation of 2.9% in August 2026, and stronger fiscal discipline and governance.
“When you look at this reclassification, what quickly comes into perspective is the investment narrative that has shifted. The World Bank moving in to put that measure reshapes the narrative that has been viewed or observed over time, especially the narrative of high or elevated sovereign risk, credit risk and political risk that has been associated with the Zimbabwean economy.
It creates a positive narrative in terms of placing Zimbabwe as a relatively safer investment destination as compared to what it was before,” Rukarwa said.
“It is a vote of confidence where we have gotg external credible institutions endorsing the progress that the authorities have made in terms of economic growth. economic development and general stability in macro economic variables, inflation volatility that has cooled off and exchange rate volatility which has stabilised since the introduction of the local currency.”
He said this creates a positive image of the economy as a relatively safer destination and a vote of confidence that puts the economy on a trajectory which is positive and dominated by growth in key variables.
“This development will definitely help the country to create a better profiling for the economy as a safer investment destination. It is something that is positive and that creates a positive narrative where we may see an uplift in terms of investment attraction and investment consideration into this country,” Rukarwa stated.
Another economist Malone Gwadu said the reclassification of Zimbabwe from a fragile and conflict-affected economy is a noble initiative resulting from the policy orchestrated by the government in the sense that this is now an international recognition for the efforts that are being pursued locally.
“The key anchors being economic growth, inflation at an all time low at single digit and strong fiscal and monetary discipline as well as coherence between the two. It’s a further assurance that the country is taking a good direction in terms of economic policies.The consistency and certainty into the market yielded the results of having gained the international recognition of the reclassification of the economy,” Gwadu stated.
He said the reclassification improves investors’ sentiments and confidence as they rely on these reports to make decisions and consider Zimbabwe as a safe investment destination as well as the improvement of the credit rating in the country as the country will now get improved patient funding.
“This is going to be a game-changer in the arrears clearance and debt resolution strategy.This may also benefit the generality of the population of the citizens and improve their lives in the sense that companies will access credit at a lower rate hence sell products at affordable prices resulting in increasing consumers’ purchasing power,” he added.
Yet another economist Titus Mukove commended the milestone but said the achievement needs a lot of work to benefit ordinary citizens.
“While the delisting is credible on technical grounds, the country’s economic growth was coming off a low base and driven by mining and the concern is that it’s a narrow base,” Mukove said.
He said this is real progress versus hyperinflationary years.
“And in terms of fiscal governance, the government has run smaller deficits and prioritised domestic debt clearance and engaging the International Monetary Fund (IMF) through the staff-monitored programme. So, yes, stock capacity has improved versus the previous period, especially 2008 to 2019 period. So, in general, my view is that the data support the removal.
And the World Bank doesn’t delist countries lightly, but stability is still fragile,” he added.
Mukove said the removal from the list does not automatically translate to investment unlocking.
“So, the removal does not automatically unlock money because the areas are still there. There are still arrears at the World Bank at about US$1.5bn. In total, our public debt is around US$23bn and nothing significant has been done to repay that hence challenges still persist,” he added.
“What investors will still ask for is around areas of arrears clearance and property rights as well as ease of doing business. And forex repatriation is critical for them to be able to come in first.”
Mukove said there is a need for this stability and the positive flags that are coming from the IMF to translate to citizens.
According to economist Vince Musewe, the country has a long way to go before it attracts significant investment into the country.
“I would say this is more reputational in the necessary step, but not sufficient.The quality of life of ordinary citizens is not improving. Employment creation is very low and infrastructure is atrocious. The World Bank can say whatever suits its agenda but some of us will not take them seriously,” Musewe said.
This milestone coincides with significant progress in stabilising and transforming the economy which include Real Gross Domestic Product growth of 8.3% in 2025, supported by strong performance in agriculture, mining, manufacturing and services; a decline in annual ZiG inflation to 2.9% in August 2026, reflecting sustained price and exchange-rate stability and improved fiscal and monetary discipline, supported by measures to contain expenditure, limit monetary expansion and strengthen the domestic currency.
The country continued improvements in public financial management, institutional governance and the business environment; and transparency score of 62 out of 100 in the 2025 Open Budget Survey, placing Zimbabwe among the leading performers in Sub-Saharan Africa.
Zimbabwe’s budget transparency score has increased by 39 points since 2017.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said this reclassification marks an important milestone in the country’s ongoing economic and institutional transformation.
“The development signals international recognition of Zimbabwe’s improving institutional resilience and provides further impetus to the reforms underway under the Second Republic toward attaining Vision 2030 and an Empowered and Prosperous Upper-Middle-Income Society,” Professor Ncube said.
He said the development will strengthen investor confidence and support the mobilisation of long-term domestic and foreign investment.
“This will create greater scope for commercial project financing, infrastructure partnerships and co-financing arrangements; promote deeper trade, investment and development partnerships; and macroeconomic stability, strengthen governance, improve the investment climate and advance the Structured Dialogue Platform on arrears clearance and debt resolution.
“The move complements Zimbabwe’s ongoing Arrears Clearance, Debt Relief and Restructuring Process,” he added.
Ncube said building a resilient, competitive, and inclusive economy that creates jobs, attracts investment, improves public services and raises the quality of life for all its citizens, leaving no one and no place behind, remains the government’s top priority.