Zimbabwe welcomes removal from World Bank fragility classifications

Oliver Kazunga, [email protected]

GOVERNMENT has welcomed Zimbabwe’s removal from the World Bank Group’s classifications of fragile and conflict-affected economies, describing the move as a major endorsement of the country’s economic reforms, institutional strengthening and growing resilience.

The reclassification, which took effect on July 1, 2026, sees Zimbabwe removed from both the World Bank Group’s Public Fragility, Conflict and Violence List and the Institutional Fragility List under the institution’s revised framework for the 2027 fiscal year.

In a statement issued yesterday, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the development marked an important milestone for the country and reflected international recognition of reforms being pursued under the Second Republic.

“The Government of Zimbabwe, under the visionary leadership of His Excellency, the President of the Republic of Zimbabwe, Cde Dr E.D Mnangagwa, welcomes the removal of Zimbabwe from the World Bank Group’s classifications of countries affected by conflict and institutional fragility, effective 1 July 2026,” he said.

Under the revised World Bank framework, the Public Fragility, Conflict and Violence List comprises countries where organised political violence affects at least 20 percent of the population, while the

Institutional Fragility List includes eligible countries with a Country Policy and Institutional Assessment score below 3.0.

Zimbabwe no longer appears on either list.

Prof Ncube said the decision reflected the country’s economic and social progress, strengthening institutional resilience and reinforcing efforts to attain Vision 2030 and become an empowered upper-middle-income economy.

The announcement comes as Zimbabwe continues to record improvements across several key economic indicators.

The economy grew by 8,3 percent in real terms during 2025, driven by strong performances in agriculture, mining, manufacturing and services. Annual ZiG inflation also declined to 2,9 percent in August 2026, signalling sustained price and exchange-rate stability.

Prof Ncube attributed these gains to prudent fiscal and monetary policies, including efforts to contain public expenditure, limit monetary expansion and strengthen the domestic currency.

He said progress had also been recorded in public financial management, institutional governance and the ease of doing business.

Zimbabwe scored 62 out of 100 in the 2025 Open Budget Survey, placing it among the better-performing countries in Sub-Saharan Africa. The country’s budget transparency score has improved by 39 points since 2017.

According to Prof Ncube, Zimbabwe’s removal from the fragility classifications is expected to improve international perceptions of the country’s institutional and investment risk profile, strengthen investor confidence and support both domestic and foreign investment.

He said the development could also unlock greater access to commercial finance, infrastructure partnerships, co-financing opportunities and expanded trade and development cooperation, while complementing the ongoing Arrears Clearance, Debt Relief and Restructuring Process.

Prof Ncube said Government remained committed to deepening macroeconomic stability, strengthening governance systems, improving the investment climate and advancing the Structured Dialogue Platform on arrears clearance and debt resolution.

“Building a resilient, competitive, and inclusive economy that creates jobs, attracts investment, improves public services and raises the quality of life for all its citizens, leaving no one and no place behind, remains the Government’s top priority,” he said.

Political scientist Mr Dereck Goto said the World Bank’s decision reflected years of cumulative reforms rather than a single policy intervention.

“This reflects cumulative reforms under President Mnangagwa rather than one intervention. Zimbabwe has strengthened public financial management, fiscal discipline, monetary and exchange-rate management, fiscal-risk oversight and institutional accountability.”

Mr Goto said the 2026 International Monetary Fund (IMF) Staff-Monitored Programme had also provided independent confirmation of Zimbabwe’s reform efforts, with the country meeting all quantitative targets and structural benchmarks during the first review.

He said the World Bank’s decision reinforced growing evidence that the Second Republic’s reform and stabilisation agenda was producing measurable institutional improvements recognised internationally.

Describing the delisting as a “highly significant” confidence marker, Mr Goto said it strengthened Zimbabwe’s position in ongoing arrears-clearance and debt-resolution discussions.

He added that President Mnangagwa’s re-engagement strategy had combined economic reforms with diplomatic engagement, helping improve the country’s standing among international stakeholders.

For investors, particularly those in Western markets, Mr Goto said the development carried considerable weight because country classifications often influence assessments of sovereign and political risk.

“Zimbabwe is increasingly presenting itself internationally as a reforming, stabilising and investable economy,” he said.

Mr Goto also noted that Zimbabwe’s removal from both classifications was significant because the World Bank separately assesses institutional fragility and widespread organised political violence.

“The delisting itself primarily reflects improved institutional and governance indicators rather than a prediction about future politics,” he said.

Economic commentator Mr George Nhepera described the development as “a very positive development”, saying it highlighted progress achieved under Government’s economic reform agenda and could contribute to lowering Zimbabwe’s risk premium in international financial markets.

However, he cautioned that future economic performance remained vulnerable to external shocks, particularly El Niño-induced weather patterns and the broader effects of climate change.

Mr Nhepera said an improved country-risk profile could reduce the cost of offshore financing for banks and other market participants, creating more favourable conditions for investment and economic growth.

Former Zimbabwe National Chamber of Commerce president Mr Trust Chikohora also welcomed the development, saying it could improve Zimbabwe’s prospects of accessing funding from

multilateral institutions and international financiers.

“The World Bank and IMF act as barometers of a country’s creditworthiness and the country’s risk factor, so if they begin to give positive signals, it helps on the journey towards normalising our credit situation,” he said.

On the likely impact on borrowing costs, Mr Chikohora said the improved classification should contribute to reducing Zimbabwe’s country-risk premium and the cost of future loans.

“We’ll wait to see how funders will respond generally to this — but what I know is that it will have a positive impact in terms of reducing the country risk factor for Zimbabwe and even starting to reduce the premiums that the country will be charged on loans,” he said.

The development is widely seen as another boost to Zimbabwe’s re-engagement and economic reform efforts, with Government and economic analysts expressing hope that it will help attract investment, improve access to finance and support the country’s long-term growth ambitions.