Regulatory and Policy Environment

Businesses in Zimbabwe face significant regulatory hurdles due to the multiplicity of licensing requirements. These requirements increase regulatory costs, create inefficiencies, and cause delays. For example, manufacturers must comply with at least nine licenses from different regulatory bodies. Zimbabwe’s customs processes are among the most cumbersome in the region, further hindering supply chain performance.

In September 2025, Zimbabwe launched ease-of-doing-business reforms aimed at reducing regulatory hurdles and lowering costs. The Zimbabwe Investment Development Agency (ZIDA) introduced an e-Regulations platform on August 6, 2025, to provide step-by-step guidance on registration and administrative procedures for investors.

Exchange Rate Management

While the exchange rate in Zimbabwe is not fully market-determined, the Reserve Bank of Zimbabwe (RBZ) has taken steps to liberalize the exchange rate. Statutory Instrument 34 of 2025 eliminated penalties for businesses pricing above the official exchange rate, allowing for market-based pricing to better reflect the cost of foreign currency. However, the exchange rate remains partially controlled, and a parallel market for foreign exchange persists. The RBZ continues to maintain a tight monetary policy to curb further depreciation of the ZiG.

In August 2025, the government announced plans to transition from the current multicurrency system, dominated by the U.S. dollar, to a single domestic currency anchored on the ZiG by 2030. Zimbabwe’s history of volatile monetary policy complicates business planning, while high bank fees and interest rates increase local borrowing costs. The de-dollarization plan has led banks to limit lending to short-term working capital facilities, restricting the availability of capital for long-term growth projects.

Despite assurances from the RBZ that the de-dollarization roadmap will prioritize economic stability, preserve foreign currency accounts, and honor existing U.S. dollar-denominated contracts, public confidence remains low, given Zimbabwean’s turbulent economic history. The country experienced a hyperinflation crisis in 2008, and the 2019 reintroduction of the Zimbabwean dollar wiped out pensions and savings.  

Despite these challenges, the Reserve Bank of Zimbabwe (RBZ) has curtailed indiscriminate money printing and lending as a treasury (quasi-fiscal operations), activities that sparked hyperinflation in the past, helping to manage money supply in line with International Monetary Fund (IMF) recommendations.

Foreign Exchange Shortages

Zimbabwe faces persistent foreign exchange shortages. To address this issue, the Government of Zimbabwe (GOZ) implements a foreign currency retention system requiring exporters to convert 30 percent of their export receipts into local currency at the official interbank market rate. This policy effectively acts as an additional tax on exporters, particularly when there is a significant gap between the interbank and parallel market rates.

Exporters consistently incur losses when forced to exchange U.S. dollars at the interbank rate. While Zimbabwe’s laws allow for the repatriation of profits and dividends, international firms can only do so based on the availability of foreign currency.

Policy Inconsistency

The Government of Zimbabwe (GOZ) frequently introduces ad hoc trade restrictions, such as exchange controls, import/export restrictions, and local content policies, to protect inefficient domestic producers. These unpredictable measures make it difficult for the private sector to operate effectively.

The government often changes policies and applies them inconsistently, sometimes based on political or personal considerations, which complicates business planning. Despite ongoing reform efforts, Zimbabwe’s regulatory environment remains complex, and businesses face significant hurdles when registering and operating in the country.

Access to Finance

De-risking by international banks has reduced Zimbabwe’s international correspondent banking relationships to only three of the country’s 16 banks.  Zimbabwe’s high external debt, estimated at approximately $12.6 billion, further limits its ability to access official development assistance at concessional rates and credit from international capital markets. However, several banks in Zimbabwe maintain active lines of credit from European banks, Pan-African financial institutions, and foreign parent companies

Corruption

High levels of corruption, lack of rule of law, and selective prosecution pose significant challenges to businesses operating in Zimbabwe and have contributed to Zimbabwe’s macroeconomic instability. U.S. firms have identified corruption as a major obstacle to foreign direct investment, with many allegations stemming from opaque procurement processes. In 2024, Zimbabwe ranked 158 out of 180 countries on Transparency International’s Corruption Perceptions Index.  

Electricity shortages

Zimbabwe faces frequent blackouts due to aging and unreliable electricity generation plants that have exceeded their economic lifespan, insufficient power supply, and outdated and inefficient transmission infrastructure. The country’s installed power generation capacity of 2,600 megawatts (MW), with average generation of approximately 1,500 MW, falls far short of the 4,000 MW needed to fully support existing industries and households.

To address the shortfall, Zimbabwe imports electricity from Zambia and Mozambique. Many companies have installed diesel generators to mitigate the impact of power outages, but these measures significantly increase operating costs.  Enterprising companies and households have installed solar solutions with battery storage to establish power consistency.

Compensation of Former Farm Owners

The Government of Zimbabwe (GOZ) has initiated compensation for former farm owners under the 2020 Global Compensation Deed (GCD), which committed $3.5 billion for seized farmland. To date, GOZ’s Land Compensation Committee approved 740 farms for compensation. In this regard, GOZ disbursed $3.1 million in April 2025 for the first batch of 378 approved farms, averaging $8,200 per farm. This amount covers 1 percent of the batch’s total compensation claim of $311 million, with the balance issued in USD-denominated treasury bonds in accordance with the Global Compensation Deed (GCD) Agreement. While the bonds offer tax exemptions and liquid asset status, market risks and high discount rates may reduce their value. Compensation excludes the land itself and focuses solely on improvements made to the farms. The slow pace of payment and the disagreement overcompensation versus the return of productive lands to former owners continue to make this matter controversial.

Political Environment

Visit the State Department’s website for background on the country’s political and economic environment.