Shift in Investment Dynamics in Zimbabwe
The latest report from the Zimbabwe Investment and Development Agency (Zida) for the third quarter of 2025 has revealed a significant transformation in the investment landscape of the country. The data highlights a marked shift towards foreign-driven ventures, with local investors playing a diminishing role.
Decline in Local Investment
The participation of local investors in licensed projects has seen a dramatic decline. According to the report, their involvement collapsed by 97.55% to US$3.15 million in the third quarter of 2025. This sharp drop contrasts sharply with the previous year’s figure of US$128.28 million in the same period of 2024.
The report states that the number of new investment licenses increased by 23.4% year-on-year, while the total proposed investment value rose sharply by 178.6%. This growth is primarily attributed to large-scale, capital-intensive projects in the mining and energy sectors, where foreign financing plays a crucial role in project development.
Foreign-Driven Projects
Foreign-driven projects now constitute nearly the entire US$3.26 billion in projected investment value. Zida notes that this shift reflects sustained international confidence in Zimbabwe’s investment framework and the agency’s effectiveness in mobilizing cross-border capital into strategic sectors.
However, this overwhelming reliance on foreign capital, while boosting headline figures, concentrates economic influence externally and could expose project pipelines to global financial volatility.
Economic Concerns
Economists have raised concerns about the implications of this trend. Trust Chikohora, an economist, offered a blunt assessment of the local climate, stating, “Locals have no confidence in the economy and that they also don’t have cash, they don’t have funds to invest.”
He pointed out that liquidity is very tight in the economy, with businesses, companies, and individuals struggling to survive, let alone invest. “It is quite a tight liquidity situation, so it shows the environment is not really conducive for investment,” he added.
Stevenson Dhlamini, another economist, highlighted that when local businesses lack the confidence to invest, it signals to foreign investors that the market is unstable. He emphasized the need for the government to formalize and guarantee long-term asset value protection.
Need for Balanced Growth
Dhlamini stated that a robust economy requires a two-pronged approach where resilient domestic capital complements foreign direct investment. To ensure growth is broad-based and inclusive, policies must prioritize investments that maximize the local economic multiplier.
“This means actively encouraging domestic participation where profits are more likely to circulate through local supply chains, supporting smaller and medium-sized enterprises,” he noted.
The current trend underscores the need for a balanced approach to investment, ensuring that both local and foreign capital contribute to sustainable and inclusive economic growth.