Zimbabwe’s economy is projected to rebound strongly in 2025 with an estimated 6.6%GDP growth due to robust growth in agriculture, services, and continued investments in mining and steel, according to the new Zimbabwe Economic Update: Fostering a Business-Enabling Regulatory Environment for Private Sector Growth, published on December 2, 2025. This growth outpaces many peers in the Sub-Saharan Africa region.
The medium‑term growth also remains positive, anticipated to remain elevated at 5% in 2026, though fiscal slippages, external shocks, and climate-related disasters such as droughts still pose significant threats to the current stability.
Zimbabwe’s tight monetary policy since late 2024 has helped improve inflation dynamics and stabilize the Zimbabwe Gold (ZiG) currency. Therefore, inflation is expected to moderate to single digits in 2026 and decrease further to 5% over the medium-term. Poverty is expected to decline gradually as growth recovers, but remains sensitive to weather shocks and inflation, with rural households particularly exposed due to the dependence on rain-fed agriculture, slow off-farm jobs, and inadequate social protection.
“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,” says Victor Steenbergen, Senior Country Economist for Zimbabwe.
To sustain a strong economic growth momentum for Zimbabwe, the ZEU recommends the following:
- Implementation of the policies set out in the Economic Reforms Matrix of the Structured Dialogue Platform (SDP) for Arrears Clearance and Debt Resolution. This will help to continue macroeconomic stability and enhance growth. Progress on the SDP also provides opportunities to help unlock affordable external credit lines and stimulate much-needed public and private sector investment to boost growth.
- Continued efforts to anchor the existing price and exchange rate stability, which will support economic growth and job creation while avoiding reversing the prevailing stability gains.
- Sustained implementation of the Presidential Ease of Doing Business Initiative, to improve the business environment, stimulate investment, and promote private sector-led growth thereby reinforcing the recent gains, boosting competitiveness, and translating economic growth into lasting economic benefits.
The ZEU special topic “Fostering a Business-Enabling Regulatory Environment for Private Sector Growth” analyzes the current business environment. Case studies of compliance requirements from several sub-sectors show significant regulatory burdens. Analysis in agriculture, agro-processing, and tourism reveal that some sub-sectors face up to 28 different legal and regulatory requirements, often involving multiple government ministries and agencies. The mapping of sectoral business regulations provides three main findings:
- High and regressive fee burdens: Compliance-related fees and levies often generate significant monetary costs for firms, with formal requirements in certain sectors even exceeding annual revenues for some subsectors.
- Inadequate transparency and reliance on manual processes: Several requirements continue to rely on paper-based processes that also require physical visits to the offices of relevant Ministries, Departments, and Agencies (MDAs) due to lack of readily available information online on regulatory requirements.
- Overlapping mandates: Multiple MDAs often issue requirements and conduct inspections targeting the same public policy goal, creating additional procedural and cost burdens for minimal public policy gain.
The ZEU recognizes the notable progress on the recent regulatory reforms by the Government of Zimbabwe under the Presidential Ease of Doing Business initiative, which among others is addressing the current complex and burdensome regulatory environment especially for Small and Medium Enterprises (SMEs). The first phase, finalized in September 2025 with analytical support from the World Bank Group, focused on the beef, dairy, stockfeed, and tourism sectors, leading to the reduction or elimination of several levies and fees.
To further support the Presidential Ease of Doing Business, the Government of Zimbabwe should complete the regulatory stocktaking and regulatory simplification for the 12 priority sectors in the next 12 months. There is also a need for a more ambitious medium-term agenda to foster Zimbabwe’s business-enabling environment, which focus on three broad pillars of transparency, simplification, and governance (Figure 1):
- Regulatory Transparency: Create a comprehensive public registry of licenses, fees, and inspection requirements to reduce uncertainty and discretion while ensuring that all this information is regularly updated, and accessible to firms and citizens.
- Regulatory Simplification: Consolidate overlapping procedures and inspections and adopt risk‑based and size‑appropriate compliance regimes to lower burdens on SMEs. This streamlining will help lower costs for firms, while allowing regulators to allocate resources more efficiently.
- Regulatory governance: Strengthen central oversight of regulatory reforms and shift agencies towards a service‑delivery mindset. These reforms also require clarifying institutional mandates, reviewing agency fee structures, and ensuring regulations serve the public interest rather than institutional revenue needs.
Figure 1. Key policy areas to foster a business-enabling regulatory environment
Effective implementation of these reforms—anchored on strong institutional leadership and improved administrative efficiency—can lower compliance costs, stimulate firm growth, and lay the foundation for a more competitive and inclusive economy.
