Zimbabwe

The Republic of Zimbabwe is a lower-middle-income country with strong human and natural capital and considerable growth potential.

Over the past two decades, Zimbabwe has experienced economic volatility, low growth, high informality, and rising poverty. Poverty reduction has been constrained by structural factors, including macroeconomic volatility, dependence on low-productivity agriculture, combined with exposure to increasingly frequent climate-related shocks that exacerbate vulnerability and food insecurity, and low coverage of social assistance programs.

Even so, Zimbabwe can build on its highly educated workforce, abundant natural resources, and recent advances in prudent economic policy, which have ushered in a period of sustained macroeconomic stability. Progress on key structural and institutional reforms—reflected in the improvement in Zimbabwe's 2025 Country Policy and Institutional Assessment (CPIA) score—could strengthen the foundations for steady and rapid growth and support progress toward the government's goal of attaining upper-middle-income country status by 2030.

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After two decades of macroeconomic instability and lackluster growth, Zimbabwe has recently made progress. Zimbabwe’s macroeconomic situation has stabilized significantly since 2025, with improved price and exchange rate stability. Gross Domestic Product (GDP) has grown from 1.7% in 2024 to 8.3% in 2025, led by rebounds in agriculture and higher global mining prices. A record year-on-year single-digit local currency inflation rate of 2.9% was achieved in August 2026 (the lowest rate in more than three decades) and parallel market exchange rate premium, which had been excessively high in recent years, has declined to below 20% in December 2025 and has remained narrow as of August 2026. Yet the recovery is delicate, and fiscal risks remain elevated. Zimbabwe’s external and overall public debt is unsustainable, with total public debt reaching 38% of GDP in 2025. Successful implementation of structural reforms, including arrears clearance and debt resolution, will help to anchor long-term growth by unlocking concessional funding lines and external long-term investments.

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The World Bank Group’s engagement in Zimbabwe is limited to technical assistance, knowledge, advisory, and analytical work due to arrears. The ongoing portfolio includes two trust-fund financed small-grant projects in energy and social protection alongside eight ongoing Advisory Services and Analytics (ASA) initiatives addressing critical knowledge gaps, advancing priority reforms, and strengthening the evidence base for policymaking.

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The WBG’s strategy in Zimbabwe is guided by the FY25–26 Country Engagement Note (CEN) which supports short-term macroeconomic reforms while laying the groundwork for fuller re-engagement aligned with Zimbabwe’s National Development Vision 2030. The CEN is organized around four objectives: strengthening macroeconomic stability, promoting private sector-led inclusive growth, boosting pro-poor social services, and advancing energy transition and climate resilience.

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Improved Business Environment.  Regulatory assessments have been completed across the agriculture, tourism and manufacturing sectors, underpinning Cabinet-approved reforms that reduced compliance costs, streamlined licenses and permits, and improved the business environment.

Advanced Trade and Regional Integration. Support has streamlined the border management at the Forbes Border, reducing cargo clearance time by almost 50%, and strengthened the Zimbabwe-Zambia tourism partnership through high-level dialogue and technical assistance for the joint development and management of Victoria Falls as a shared tourism asset.

Strengthened Agrifood Value Chains.  Over 2,100 farmers have received support and planted more than one million coffee trees, brought approximately 1,650 hectares under cultivation, enabled green coffee exports, and generated around $1 million in farmer revenues.

Strengthened Social Protection Systems. Support was provided for the enumeration of over 43,800 households across Mangwe and Nkayi districts to advance Zimbabwe's national Social Registry. The Proxy Means Test model improved targeting of vulnerable households and consolidated two cash transfer programs into the new Zimbabwe Social Cash Transfer (ZSCT) to reduce duplication and improve efficiency.

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