Zimbabwe has a timely opportunity to build long-term economic momentum and expand formal employment opportunities, according to a new World Bank Group report titled The Zimbabwe Growth and Jobs Report, released recently.

The report says Zimbabwe’s economic growth averaged almost six per cent between 2021 and 2025, while the local-currency inflation fell to single digits in early 2026, the first time this has happened since 1997.

The World Bank says these developments provide an important foundation for stronger and more sustainable economic growth, but warns that Zimbabwe needs to translate economic stability into increased investment, productivity and the creation of more formal jobs.

The report says the country is experiencing greater economic stability, driven in part by improved fiscal and monetary discipline following decades of economic turbulence that weakened growth, eroded savings and left much of the workforce without access to decent jobs.

World Bank Senior Country Economist Victor Steenbergen says, “We see that after decades of volatility, Zimbabwe has achieved a degree of stability. So inflation fell to single digits throughout the whole of 2026. And this is the first time that local currency inflation’s in single digits since 1997. The economy also grew by over 8% in 2025, supported by a strong agricultural season and a favourable external environment. And we see that the government is engaged in a 10-month staff-monitored programme with the IMF, which helps build the policy credibility that sets the foundation for international re-engagement as well. So here the point is that stabilisation is essential, but it’s not sufficient for high and inclusive growth in jobs, but it has opened a window of opportunity.”

However, the report cautions that economic growth has yet to translate into widespread improvements in household incomes and productive employment. It further cautioned Zimbabwe against rushing to end the use of dollars in the economy, as this could trigger capital flight.

The southern African country had set 2030 as the deadline to phase out the domestic use of dollars and make its bullion-backed ZiG its sole currency.

Steenbergen says, “The challenges that we see in Zimbabwe here are that the currency credibility is still nascent and needs to be further anchored. We also see that the de-dollarisation agenda has created uncertainty and that multilateral debt arrears continue to block access to concessional finance for the government of Zimbabwe. And so here our recommendations are around sustaining fiscal and monetary discipline, sequencing the de-dollarisation transition in a transparent and market-driven way, and then clearing multilateral debt arrears and achieving debt sustainability…”

Head of Zimbabwe’s Public Debt Management Office, Andrew Bvumbe, says, “We are a very, very good ground for a PhD, I think. How to do it and how not to do it, very eloquently said. But I think the issue of transparency and the way we move towards that aspiration of a monocurrency has to be transparent, and you can’t force it. I think that’s fundamental. And markets, you should play a role. And in the first place, when we dollarized, it started from the other side in the streets. So the streets also have to play a role in this process. So we cannot force it on anyone. So it’s a process. We bring in everyone.”

According to the report, about 80 per cent of Zimbabweans remain employed in the informal sector, where average monthly earnings are around 130 US dollars, while nearly half of the population lives below the international poverty line. The report also shows that labour has largely shifted from agriculture into low-productivity retail and informal services, rather than formal manufacturing or high-value service sectors.

Bvumbe says, “So we have stopped calling it informal, although it’s not come to my side. So we are calling it an emerging sector, although it’s not contributing to taxes, does not make it informal. They are creating jobs; they are producing. So for us going forward, we should focus on how we assist them to grow, to link up with big corporations and to create more jobs…”

In July 2026, the World Bank removed Zimbabwe from its list of fragile and conflict-affected situations, marking what was seen as a significant improvement in the country’s economic and institutional conditions. However, the development has not resolved one of Zimbabwe’s biggest economic challenges: its longstanding debt arrears.

The International Monetary Fund (IMF) estimates that Zimbabwe’s external arrears to official creditors had risen to about US$7.7 billion by the end of 2025. The country had also accumulated additional arrears to external commercial creditors of approximately US$22.8 billion.

Report by: Ephert Musekiwa