Zimbabwe has historically been one of the most robust economies in southern Africa, with substantial natural resources and a highly regarded workforce. The performance of the Zimbabwean economy will remain inextricably linked to the policy and political climate over the coming years. Zimbabwe’s government is gradually beginning to re-engage with the international development community.

We keep our clients informed of the latest market moves and political developments in Zimbabwe, as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on 12 of Zimbabwe’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our expert research teams. Our aim is to keep you ahead of the game, so you can do business with ease in Zimbabwe.

Country Risk

Zimbabwe Country Risk

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Core Views:

  • The succession process in Zimbabwe has become somewhat clearer. The removal of Vice President Joice Mujuru at ZANU-PF's five-year congress in early December 2014 seemingly clears the path for her main rival Emmerson Mnangagwa to take the helm once Mugabe eventually departs the scene. Even so, there remains no little uncertainty over the issue, not least given that all the power now lies within the president's hands.

  • Political and policy uncertainty will continue to deter much-needed investment into the moribund Zimbabwean economy, while a depreciating South African rand and weak commodity prices will also weigh on economic activity.

  • The Zimbabwean economy will remain near deflationary territory over the coming quarters thanks to weak demand, a depreciating South African rand and low oil prices.

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Zimbabwe Operational Risk Coverage (9)

Zimbabwe Operational Risk

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Zimbabwe's economic crisis and political isolation has contributed to a marked deterioration in the country's business environment over the last several years. In particular, businesses face a myriad of risks stemming from corruption and a large bureaucratic burden, which lowers the country's competitiveness relative to its southern African neighbours. Other salient threats include poor access to utilities, notably water and power, as well as insecure property rights for foreign businesses. Moreover, the quality of Zimbabwe's health care sector has declined considerably over the last several decades, thereby contributing to poor health outcomes within the labour force.

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Zimbabwe - Operational Risk
Zimbabwe

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Zimbabwe Crime & Security

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Businesses and foreign workers in Zimbabwe benefit from a safer environment than in most other Sub-Saharan Africa (SSA) countries, with relatively low crime rates, a negligible threat from domestic or international terrorism and a secure strategic environment. Nevertheless, we highlight that political violence during presidential elections remains an issue, particularly in Harare, and corruption seriously hinders the response of the police services to crimes. Zimbabwe performs well overall in the SSA region in the BMI Crime and Security Risk Index, with a score of 44.3 out of 100 placing the country 13th out of 48 states. Thus, in terms of Crime and Security Risk, Zimbabwe trails four of its neighbouring countries, Namibia (second), Botswana (third), South Africa (fifth) and Zambia (eighth), and is ahead of only Mozambique (23rd).

While crime is not overly pronounced in Zimbabwe, it does present a risk to business...

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Zimbabwe Labour Market

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BMI View: Zimbabwe's labour market cannot compete with its regional peers owing to low levels of productivity, public health issues, and the residual effects from the economic collapse and hyperinflation during the mid-2000s. Although Zimbabwe has a favourable demographic situation, with more than 60% of the population younger than 24, the country has proved incapable of turning its population into skilled workers, and we see no sign of this situation improving over the medium term. Taking these factors into consideration, BMI awards Zimbabwe a score of 37.0 out of 100 for Labour Market Risk, placing the country 29th in Sub-Saharan Africa (SSA), between Cote d'Ivoire and Sierra...

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Zimbabwe Logistics

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Zimbabwe has a limited and low-quality transport network. With a lack of access to maritime trade flows and the added stress placed on an ailing road and rail network, Zimbabwe's reliance on its neighbouring countries for efficient trade poses a threat to investors. Additionally, movement of goods is hampered by lengthy bureaucracy and relatively expensive trade procedures, creating additional costs for businesses. Although the country presents well in terms of its market size, due to steady economic growth following years of decline, the country is at risk from adverse affects of its current trade deficit and expensive fuel costs, compromising the success of business operations in the country.

Zimbabwe scores 33.6 out of 100 in the BMI Logistics Risk Index, placing the country in 24th position out of 48 countries in the Sub-Saharan Africa (SSA) region. This puts Zimbabwe behind neighbouring countries South...

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Zimbabwe Trade & Investment

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BMI View: The combination of endemic corruption, weak rule of law, caps on foreign investment and a lack of its own currency serve to make Zimbabwe an unattractive operating environment for foreign firms. Corruption in particular poses a major obstacle to foreign investment and participation in the economy by lowering the accountability and impartiality of the judicial system, incurring adverse consequences for important procedures such as the filing and paying of taxes, the resolution of contractual disputes and the registration of property. Intellectual property rights are also poorly enforced, raising the probability of financial losses due to copyright violations and piracy. Taking these factors into consideration, BMI awards Zimbabwe a score of 22.9 out of 100 for overall Trade and Investment Risk, placing the country 45th out...

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Zimbabwe Industry Coverage (12)

Agribusiness

Zimbabwe Agribusiness

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BMI View: We expect Zimbabwe to remain a net corn importer over the longer term. Over the next five years, we expect production of the grain to demonstrate moderate growth, although this will partly be due to base effects; production will remain well below the totals seen in the early 2000s. We are more optimistic regarding the sugar sector, where access to key markets and potential for productivity improvements will drive production over the long term. Although we forecast a domestic sugar market surplus, the sector remains below...

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Autos

Zimbabwe Autos

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According to Renault Group, which tracks industry sales in Zimbabwe, domestic auto sales contracted by 26.6% year-on-year (y-o-y) in February to 431 units. This brought sales for the first two months of 2015 to 862 units, a decline of 26.6% y-o-y.

Total domestic auto sales fell by 10.3% to 7,048 units in 2014 and we have downgraded our 2015 sales estimate, seeing the market contracting by 15.0% (versus our previous forecast for an increase of 5.0%).

One major headwind we see for sales over the next few years is the recent increase in duties on car imports. While we believe this move is also influenced by the government's intention to develop the local auto sector, we have previously voiced our view that the local production industry has too many flawed fundamentals to support the demand created by such protectionist policies.

This has prompted us to downgrade our...

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Commercial Banking

Zimbabwe Commercial Banking

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Food & Drink

Zimbabwe Food & Drink

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BMI View : The Zimbabwean economy will remain near deflationary territory over the coming quarters thanks to weak demand, a depreciating South African rand and low oil prices. The Zimbabwean economy continues to flirt with deflationary territory with the latest data showing that inflation was 0.1% year-on-year in September 2014. Underpinning low price growth is subdued domestic demand, a weak South African rand relative to the US dollar and the decline in international oil prices witnessed over recent months. There is little reason to believe that any of these factors will meaningfully reverse over the coming months and we therefore think that annual inflation will remain at around zero into 2015.

Key Industry Trends

Nestlé Zimbabwe Expansion: The world's largest producer of...

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Infrastructure

Zimbabwe Infrastructure

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BMI View: The country's construction industry remains high risk, poorly financed and subject to the unattractive investment policies of President Robert Mugabe, with average annual real growth between 2015-2024 expected to be a mediocre 2.6%.

Zimbabwe holds a decent amount of potential as a frontier growth market in Southern Africa, however is highly unlikely to meet that potential under current conditions - namely the policies enacted by President Robert Mugabe and his regime, which make it risky for foreign investors to gain access to the market. The mining sector, which is a key growth driver for the country's infrastructure, has in the past been hit hard by indigenisation drives. With Mugabe...

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Insurance

Zimbabwe Insurance

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BMI View: Zimbabwe's insurance industry will once again boast double digit growth in 2015, in both the life and non-life sectors. The life sector will continue to dominate the insurance market and outpace non-life growth, given the attractiveness of the former as a long term savings option. However, one major insurance company - Old Mutual - dominates the market, which will hurt competitiveness.

We remain cautiously optimistic for the prospects of Zimbabwe's insurance industry. Retention ratios are high, claims ratios are low and strong growth is expected to continue. There are, however, many persistent issues and threats. As a young insurance market, the regulatory framework remains untested, particularly in the fast-growing life sector. Recent actions to punish under-capitalised insurers and the withdrawal of the licenses of four insurers and one...

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Mining

Zimbabwe Mining

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BMI View: Zimbabwe's mining industry will achieve steady growth in absolute terms over our forecast period through to 2019 as production increases across the key platinum and diamond mining sub-sectors. However, we note a number of potential downside risks on the horizon, including falling mineral prices and an uncertain political and regulatory climate. Zimbabwe is richly endowed with deposits of chrome, gold, nickel, diamonds and platinum, among other minerals. Its gold reserves are among the largest in Africa, while it has the world's second-largest platinum reserves. Diamond reserves are measured to be the second-largest globally after Russia. Development in these key markets together with a gradual more stable political and economic climate has seen the country's status as a major global producers strengthen in recent...

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Pharmaceuticals & Healthcare

Zimbabwe Pharmaceuticals & Healthcare

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BMI View: Our outlook of modest growth for Zimbabwe's pharmaceutical sector should be treated with caution as poor monitoring and recording practices along with the country's reliance on aid from various sources make market figures unreliable. Pharmaceutical spending will be driven mainly by imported medicines with demand owing to a high communicable-disease burden. However, low purchasing power, a declining economy and ongoing political tensions pose high risk and uncertainty for the market, deterring multinational drugmakers.

Headline Expenditure Projections

  • Pharmaceuticals: USD361mn in 2014 to USD380mn in 2015; +5.2% in US dollar terms. ...

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Power

Zimbabwe Power

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BMI View: The outlook for Zimbabwe's power sector is moderate but market opportunities for private investors are limited. On the upside, a number of major projects will boost generation to 12.5TWh by 2024 up from 8.2TWh in 2015, mainly by exploiting coal and hydropower. This will be underpinned by a steady rise in demand for electricity, from 7.2TWh to 9.8TWh over the same timeframe, as the economy and population grows. However, the operating environment will remain extremely challenging.

A major...

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Telecommunications

Zimbabwe Telecommunications

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BMI View : BMI's Q315 Southern Africa report analyses the latest industry, regulatory and macroeconomic developments in the telecoms markets in Angola, Botswana, Mozambique, Mauritius and Namibia. It also contains our estimate of the market data relating to the end of 2014 and an update of our five-year forecasts to 2019 for the mobile, fixed-line and internet sectors. From the five states...

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Zimbabwe Telecommunications

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BMI View: The implementation of SIM registration regulations put a dent in mobile market growth in both Zambia and Zimbabwe's markets in 2014. Zambia's market has bounced back impressively as operators apply tower sharing strategies and the government takes a proactive approach to extending network coverage in rural areas. With reduced tariffs and a weak economic environment adding further challenges for Zimbabwean operators, BMI believes all players stand to gain from the regulator's plans to force telecoms infrastructure sharing in the country.

Key data

  • Zambia's mobile market grew by 7.1% q-o-q and 17.8% y-o-y in Q115, making a strong recovery from the SIM registration process in 2013, and bringing subscriptions to 10.838mn for a penetration rate of 69.8%.

  • Zimbabwe...

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Tourism

Zimbabwe Tourism

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BMI View : Zimbabwe's tourism sector is expected to see steady growth over the forecast period. As the government attempts to move the country out of economic trouble, it has recognised the importance and future potential of the tourism market and plans to establish better transport infrastructure and international travel links. Inbound and outbound tourism are set to rise steadily; however, the sector faces a number of challenges. The restrictions on foreign ownership in the country continues to deter potentially lucrative foreign investors and a newly introduced 15% tax on tourist accommodation may make potential tourists look for alternative...

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Latest Zimbabwe Articles

Latest Zimbabwe Blogs

  • BMI Research has just published a special report, Top 10 Political Successi...

  • Below is a selection of key financial market stories published in Business ...

  • As the dust settles following Zimbabwe’s controversial election, we discuss...

Latest Zimbabwe Podcasts