A Bullish Case for Zimbabwe
Despite having grappled with a plethora of disasters — scanty reserves, hyper-inflation, sanctions by the west, and limited borrowing capacity — Zimbabwe stands as the South’s lead competition contender. Landlocked by the various surrounding countries, Zimbabwe, nevertheless, wields more potential than is usually cited.
1. DOMESTIC ECONOMY, CENTRAL BANK OPERATIONS
With regard to reserve management and forex concerns, Zimbabwe’s turbulent years can be categorised into two: the reserve inadequacy and subsequent Zimbabwe dollar hyperinflation occurrence, within the 2004/5 to 2008 frame, due to scanty-reserve depletion; the 2009 to 2023 period within which there were both paltry reserves and widespread adoption of multi-currency legal tender usage on the local market — with the main currencies being the Zambia Kwacha, the United States Dollar, the Botswana Pula, the United States Dollar, the South Africa Rand.
However, in 2024, Zimbabwe launched the Zimbabwe Zig — partially gold-backed as of 2025 — which is currently used in conjunction with the aforementioned multi-currency layout, while the former gains more public confidence. Under the 2024 reserve initiative, Zimbabwe embarked on aggressive reserve accumulation, and as of 2025, the total gold and forex reserves had been lifted by more than 4x — up to an approximate $1.2 billion, with gold reserves making up $1billion of the valuation and accounting for more than half of total reserve valuation. Overall, the reserves currently provide more than 6x cover for the Zig currency in circulation. A more aggressive accumulation approach — the deployed 30% surrender requirements, partly to cater for import cover — is being deployed, and I’d conjecture that it currently looks promising and that in a few years, a shift from dollar usage on the local market, in favour of the Zimbabwe Zig, will occur.
The Balance of Payments of Zimbabwe, over the last 20 years, present a curious mix of deficits and surpluses. The deficits that usually receive much of the attention are those that occurred during the years when Zimbabwe underwent sanctions, and those as well during the years when Zimbabwe grappled with inflation-related challenges. Not much is mentioned about the BOPs layout, commencing 2024, after Zimbabwe adopted the Zimbabwe Zig in conjunction with the aforediscussed multicurrency approach. Between 2005 to 2023, witnessed are BOPs influenced by a conjunction of remittances, minerals, overall low FDI, subdued exports, abundant imports. However, post-2024-reserve adjustments, BOPs strengthened with consistent rises as of 2025, with main contributors being gold exports and remittances.
Over the last 20 years, in both the multicurrency and the non-multicurrency periods, Zimbabwe’s Debt-to-GDP teetered between 90% and 120% — with debt increments due to sanctions and domestic expenditure pressures, caps in form of limited borrowing capacity, and accrued distrust due to non-servicing of multilateral and bilateral obligations. As of 2025, the few measures in place to reduce and contain the parameters under discussion include reduced exporter retention to boost reserves, and focus on the core 2025-2029 mandate which is currency stability.
2. SECTORAL ANALYSIS
Grappling with sanctions by the West, over the last 20 years, Zimbabwe strategically broadened its trade with China — which currently stands as its largest trading partner, and navigating fiscal turmoil, Zimbabwe embarked on aggressive currency stabilisation in 2024. Therefore, I’ll briefly highlight a few sectors and subsectors that have been recovering since 2024.
Agriculture is the main sector that has witnessed major recovery since 2024 (especially post-drought). There have been major increments in the maize output (200%+ in 2025, with 2023 reference), and major increments in tobacco output (up 40%+ in 2025, with 2023 reference) cementing its position as the lead producer of tobacco in Africa and keeping it among the top seven worldwide.
Sub-sectoraly speaking, Zimbabwe’s lithium mining witnessed significant surges in output in 2025, with 2023 as reference. And as of 2025, spodumene exports also saw an 11%+ increment (with 2023 as reference), and an inflow of approximately $500 million revenue despite lower prices — further cementing its place as the lead producer of spodumene in Africa, and retaining its position as a key supplier in the global battery minerals chain. Platinum mining, at Zimbabwe’s Great Dyke, has also seen an approximate 18% rise in output as of 2025, with reference to 2023.
Additionally, China’s occupation of the role of Zimbabwe’s main trading partner — with the former being the main destination for tobacco, lithium, gold, among others — amidst the ongoing sanctions has been a major boon to the Zimbabwe economy. Nevertheless Zimbabwe ought to diversify its trading partners and reduce reliance on China. As of 2025, Zimbabwe has no sectoral or sub-sectoral dominance in Africa with regard to tourism, manufacturing, technology, and services.
3. MAJOR CONCERNS, SOLUTIONS
Zimbabwe is on a promising path, and if it’s able to adroitly rectify the key issues currently plaguing it, its economic path will proceed on upward motion. For reiteration purposes, some of the main issues currently plaguing Zimbabwe are: delayed reserve accumulation, currency stability concerns, unwarranted dollar dependence on the local market, remittances playing a major role in the BOPs, low diversification with regard to trading partners, heightened domestic regulation, limited sectoral and sub-sectoral dominance in Africa, heightened reliance on resources. More discussion should be around speeding up reserve accumulation, diversification of trading partners, and decongestion of the regulatory environment.