The World Bank in Zimbabwe

Zimbabwe is a lower-middle-income country with strong human and natural capital and significant growth potential. Building on its highly educated workforce, abundant natural resources, and recent advances in economic policy—together with key structural and institutional reforms—Zimbabwe could achieve steady and rapid growth and move towards upper-middle-income country status, which the Government of Zimbabwe (GoZ) has targeted for 2030.

Yet, the country has historically been burdened with macroeconomic instability, in part because of fiscal pressures. In support, the World Bank’s new Zimbabwe Public Finance Review helps to identify options for fiscal consolidation that can move Zimbabwe onto a more sustainable fiscal pathway. In turn, prudent fiscal policy will help to stabilize the macroeconomic environment by providing an anchor for price and exchange rate stability, bolstering economic growth and job creation.

Zimbabwe’s Country Private Sector Diagnostic further shows that the country is highly competitive in a number of value chains in agriculture and agribusiness industries, as well as in tourism and the mining of energy transition minerals. To realize this potential fully, Zimbabwe needs to find new ways to capitalize on existing and emerging opportunities for the private sector to drive economic growth and harness the country’s comparative advantages.

Zimbabwe’s Country Climate Development Report finds that Zimbabwe faces significant challenges from climate change, which will continue to impose high costs on the economy. The inability to finance development, climate adaptation, and mitigation leads to increased land degradation and less climate resilience. Zimbabwe can address these challenges by linking global value chains to its significant reserves of energy transition minerals.

Economic context
After several years of high growth (following the COVID-19 pandemic), growth declined to 2% in 2024 due to the El Niño-induced droughts, lower mining prices, and macroeconomic instability. Ongoing power shortages have contributed to decreased industrial growth and disrupted winter irrigation.

Inflationary pressures have moderated since the April 2024 introduction of the new Zimbabwe Gold (ZiG) currency, but the exchange rate continues to be under pressure (as evidenced by a sizeable devaluation in late September 2024). The currency volatility limits formal sector production and undermines companies' and individuals' planning.

Macroeconomic pressures also persist on the fiscal side. The transfer of Reserve Bank of Zimbabwe’s external debt to the Treasury, together with increased capital spending in 2023, has resulted in steep increases in the Treasury’s debt servicing costs. At the same time, the drought has increased fiscal pressures for drought-response and undermined tax collection. As such, fiscal consolidation and discipline are key to macroeconomic stability going forward.

Economic growth is projected to recover to about 6% in 2025 once the influences of the drought begin to wane—especially on agricultural production and hydropower generation—and ongoing investment initiatives start to increase mining and manufacturing production. In the medium-term, the current account is expected to remain positive and improve, driven by increased mining activities for lithium and a recovery in gold production.

Key Developmental Challenges
Macroeconomic vulnerabilities and a challenging business environment raise the cost of doing business in Zimbabwe, increasing informality and limiting the pace of structural transformation. In 2024, El-Nino induced drought triggered a state of National Disaster, significantly affecting agriculture, an important sector of Zimbabwe’s economy that largely depends on rainfed crops. The investment climate is further hampered by inadequate electricity supply, as the drought has resulted in power shortages at the Kariba hydro-power station.

Public debt remains high, unsustainable, and in distress, limiting access to international financing. Due to the accumulation of external arrears and legacy debts, total public debt reached $21.2 billion in 2023 (96.6% of GDP). Fiscal risks remain elevated due to wage bill pressures and borrowing on non-concessional terms. Persistent challenges in deficit financing have exerted pressure on the ZiG. To restore debt sustainability, there is need for increased domestic resource mobilization, fiscal consolidation, improved public debt management, growth-enhancing structural reforms, and the resolution of external arrears.

Poverty reduction has been constrained by structural factors, including macroeconomic volatility, dependence on low-productivity agriculture (combined with high correlation between weather shocks and agricultural production), low coverage of social assistance programs, and high inequality in income and human capital endowment.

Last Updated: Apr 11, 2025

The World Bank Group (WBG) presented its Board of Executive Directors the new Country Engagement Note (CEN) for Zimbabwe (2025–2026), focused on supporting the country’s immediate development priorities. The CEN is structured around two pillars:

Pillar 1 aims to support the country in reducing macroeconomic distortions, strengthening fiscal policies, and improving economic governance, while fostering a more conducive environment for private sector-led growth; Pillar 2 aims to help build resilience by boosting pro-poor social services, empowering women, and delivering more efficient assistance to vulnerable households. It also supports resilience to climate change and the energy transition.

The CEN was informed by extensive consultations with a wide range of stakeholders as well as analytical work conducted by the WBG over the past two years.

The primary financing mechanism for the WBG program in Zimbabwe is a Multi Donor Trust Fund, the Zimbabwe Socio-Economic Transformation Trust Fund (ZISET). This Trust Fund (a successor to the Zimbabwe Reconstruction Fund) has contributions from the governments of Sweden, Switzerland, and the United Kingdom and will support Zimbabwe, with a focus on two main areas: ensuring socio-economic stability and building resilience. The closing date for this support is March 2028. 

Interventions will include the following:

1.       Promoting private sector-led growth to prioritize the growth and the jobs agenda. Activities include addressing bottlenecks in the business environment (such as licensing) and in enabling sectors (renewable energy, digital) to strengthen the regulatory environment and institutional capacities.

2.       Enhancing real sector competitiveness and investment to increase the competitiveness of high-growth potential subsectors like horticulture and tourism and promote investment in specific agricultural value chains with high competitiveness and comparative advantages.

3.       Establishing building blocks of a social registry system and an immediate focus on the design and implementation of the social impact mitigation program to complement critical subsidy reform.  

The World Bank is supporting the development and implementation of a roadmap to achieve sustainable financial viability and affordable and reliable universal access to electricity for economic and social development in the energy sector. This support is provided under ongoing programmatic analytical services and advisory work, which covers structural, policy, and utility reforms, including the development of an energy compact for Zimbabwe.

IFC Engagement: Smallholder Coffee Development Program
IFC is supporting Nespresso to revive a program helping re-start coffee production in the Manica province of Zimbabwe. The four-year program (2021–2025) has so far reached 1,350 smallholder farmers, who have planted close to one million coffee trees. The program is also supporting the Zimbabwe Coffee Mill (ZCM), the country’s only private coffee aggregator, to improve systems and processes and create an efficient coffee aggregation, processing, and exporting entity. ZCM, with a processing capacity of 20,000 metric tons, is processing close to 1,000 metric tons of coffee annually, with through-put expected to increase as newly planted coffee trees reach harvest.

Zimbabwe Investment Policy and Promotion Program (#606249)
The overall objective of the Zimbabwe Investment Policy and Promotion Program (ZIPPP) is to support the operationalization and capacity development of the Zimbabwe Investment and Development Authority (ZIDA). The immediate and intermediate results expected include an improved policy and regulatory framework for Special Economic Zones (SEZs), strengthened investor services, and improved investment promotion and retention capacity.

The focus by ZIDA on foreign direct investment (FDI) requires significant capacity to attract and retain FDI and to tap into supply and value chains in Southern Africa and elsewhere. This requires not only policy, legal and regulatory regimes that inspire confidence amongst foreign investors, but also the institutional capacity to generate opportunities, target prospective investors, facilitate entry, and provide aftercare to prospective and actual foreign investors. The project:

·      Supports the operationalization of the SEZ regime through drafting and promulgation of the critical but missing policy and regulatory framework.

·      Supports the institutional development and strengthening of ZIDA. This entails institutional capacity development for investment generation and aftercare, and the deployment of critical tools that improve operational efficiencies.

Advisory and Analytical work
Through Advisory Services and analytical work, the WBG has developed key diagnostics to contribute to the development agenda. Recent products include:

·      Zimbabwe Public Finance Review: Anchoring Macroeconomic Stability through Fiscal Policy (2025)

·      Zimbabwe Economic Update 2024 : Improving Resilience to Weather Shocks and Climate Change

·      Zimbabwe Country Private Sector Diagnostic Report (2024)

·      Zimbabwe Country Climate Development Report (2024)

·      Zimbabwe Economic Update 2023: Electrifying Growth through Reliable and Universal Energy Access

·      Zimbabwe Poverty Assessment (2022). Reversing the Tide: Reducing Poverty and Boosting Resilience in Zimbabwe

·      Zimbabwe Country Economic Memorandum (2022): Boosting Productivity and Quality Jobs

Last Updated: Apr 11, 2025

Through the Zimbabwe Reconstruction Fund (ZIMREF), the WBG has been pivotal in supporting legislative reforms and early reform implementation in key areas:

• Financial Management: The WBG helped to strengthen the public procurement framework, improve the coverage and reporting of internal and external audits, and improve Parliamentary and civil society oversight. Forty-six government funds started using Public Financial Management Systems (PFMS) against a target of 10. The Integrated Financial Management System (IFMIS) was successfully rolled out to 63 districts by setting up district kiosks.
• Poverty Monitoring: The WBG assisted the government in monitoring poverty outcomes and their integration into national strategy and planning documents. This included financing of the 2017 Poverty, Income, Consumption and Expenditure Survey (PICES), release of the 2017 poverty report, and publication of poverty microdata for 2017 and 2019.
• Human Capital: The WBG supported the establishment of a basic social protection Management Information System (MIS), which is the basis for a social registry system.
• Water Supply: The WBG strengthened the Zimbabwe National Water Authority and the regulatory framework in the sector increased access to piped water for 34,810 people (74% more people than the target) and provided installations of new water connections for 1,265 households in three growth points (Guruve, Lupane, and Zimunya).
• Climate Change: The WBG helped develop Zimbabwe’s climate policies, its pipeline of climate adaptation, and its mainstreaming of climate changes in investment planning.
• Private Sector Development: The WBG has been pivotal in enhancing Zimbabwe's business climate and has streamlined business processes across the enterprise lifecycle, reviewed key legislations, and reduced bureaucratic burdens. Notable achievements include the establishment of a SME finance Credit Guarantee Scheme, a Credit Registry, and a Single Window Tax Payment System. Legislative reforms such as the Moveable Property Security Interests Act, Deeds Registration Act, and Insolvency Act have improved access to finance and dispute resolution. The TA also supports the development of the Investment Law and the Zimbabwe Investment Development Agency, aimed at fostering a conducive investment environment.

Other analytics products, such as the Country Economic Memorandum, which considered opportunities to boost productivity and quality jobs, have resulted in policy discussions with the Ministry of Finance, Ministry of Industry and Commerce, and ZIMTRADE. This work also shaped the development of new technical assistance related to supporting private sector development for the informal sector and improving the taxation of the private sector, as well as planned work on Zimbabwe’s trade policy.

The Zimbabwe Economic Update IV, with a special topic on Electrifying Growth through Reliable and Universal Energy Access provided a set of recommendations that have formed the basis for a new three-year program of technical assistance in Zimbabwe from the Energy Global Practice.

The Zimbabwe Gender and Gender Based Violence (GBV) Assessment Reports resulted in high-level political engagement and the successful launch of foundational engagements in the country, including the East Africa Girls Empowerment and Resilience Program in Zimbabwe.

The Zimbabwe Idai Recovery Project (ZIRP) closed in June 2023, meeting or exceeding all planned recovery and reconstruction targets. The project achieved the following:

• 661,692 people, including 3,611 Internally Displaced People (IDP), were provided with integrated health services, and coverage in hard-to-reach areas was extended through the training of 2,843 Village Health Workers (VHWs).
• Food assistance interventions reached 239,324 beneficiaries within the affected communities.
• 12,111 GBV survivors benefited from the project, receiving survivor-centered health services and comprehensive legal and psychosocial support.
• 47km of community roads were rehabilitated as well as seven cyclone-damaged community schools, three community health facilities and one agro-market all using revised design and build back better standards.
• 482 water systems and 3,789 sanitation facilities were rehabilitated and restored, reaching 44,106 households.
• 88,516 cyclone-affected students were supported with education supplies
• Six irrigation schemes were rehabilitated with substantial advisory and extension support services provided to over 10,000 farmers.
• Two new community radio stations were established to disseminate early warning information in the two affected districts, Chimanimani and Chipinge

The Health Sector Development Support Project, which began in 2011, successfully concluded in March 2024. Its goal was to increase the coverage and quality of an integrated package of reproductive, maternal, neonatal, child, and adolescent health and nutrition (RMNCAH-N) services. The project also played a significant role in accelerating the national COVID-19 response by providing critical technical assistance and supporting vaccine deployment efforts. Some key achievements of the project include:

• Provision of antenatal care services to more than 1 million women, ensuring that each had at least one visit per year to a supported health facility.
• A skilled birth attendance rate of 92% for women who had booked in advance, benefiting an estimated 1.5 million women in rural districts.
• Improved quality of care in health facilities, with patient-rated quality scores averaging between 80% and 85%, compared to previous scores below 70%. By the end of December 2022, 54% of health facilities recorded an improvement in quality scores since the previous quarter.
• Since 2014, over 81,000 women have been enrolled in the urban voucher component of the Results-Based Financing (RBF) program, which strengthened urban health systems and improved access to maternity services for the urban poor in Harare and Bulawayo Metropolitan Provinces.
• Scaled up the Urban Voucher initiative to 35 health facilities in Harare and Bulawayo, improving access to healthcare for vulnerable women and children.
• The RBF program’s impact evaluation demonstrated faster improvements in key maternal and child health indicators, including a 13% increase in in-facility delivery rates and a 12% improvement in postnatal care in RBF-supported districts compared to non-RBF districts.

The Zimbabwe COVID-19 Response Project, with an initial budget of $6.58 million, received an additional $15 million in financing in July 2024 to further support pandemic preparedness and essential health service delivery. The project has accomplished the following:

• Supporting the deployment and management of COVID-19 vaccines, contributing to an increase in national vaccination coverage from 39% to 50.4% (57% women and 43% men) by August 2024.
• Successfully rolling out a COVID-19 vaccine authentication system and launched a national COVID-19 vaccine campaign.
• Strengthened community-led responses to enhance public health measure uptake and vaccine acceptance.

The project will also support the installation of solar-powered cold chain systems in 250 primary healthcare facilities to ensure safe vaccine storage and improve overall health system capacity. These initiatives have had a lasting impact on improving health outcomes and strengthening Zimbabwe’s health system resilience.

Last Updated: Apr 11, 2025

Partnerships—with multilateral institutions, civil society organizations, the private sector, foundations, think tanks, and others—strengthen the impact of the World Bank in Zimbabwe.

The World Bank Group participates in several multistakeholder dialogues and coordination platforms at a technical level for exchanging insights and shaping initiatives to active strategic collaborations for jointly taking on development challenges. It co-chairs the Zimbabwe Development Partners Forum, a platform that brings together the key multilateral and bilateral development partners in Zimbabwe to enhance coordination and collaboration towards more effective development cooperation. These include international financial institutions, the United Nations, and bilateral agencies.

The Zimbabwe Socio-Economic Transformation Trust Fund is currently supported by the United Kingdom (FCDO), Switzerland, Sweden and the World Bank’s State and Peacebuilding Fund.

The African Development Bank, European Union, and Sweden also support the country portfolio through the Kariba Dam Rehabilitation Project, which is implemented through the Zambezi River Authority.

UNOPS, working with eight other UN agencies, implemented the Zimbabwe Idai Recovery Project.

The previous multi-donor trust fund, ZIMREF was supported by Canada, European Union, Norway, Sweden, Switzerland, Norway, United Kingdom (FCDO), and the World Bank’s State and Peacebuilding Fund. 

Last Updated: Apr 11, 2025