Guidance

Overseas business risk: Zimbabwe

Updated 11 August 2023

1. Political Overview

The ruling part ZANU-PF has held power since Zimbabwe’s independence in 1980. The main opposition party is the Citizen’s Coalition for Change (CCC). Zimbabwe’s next general elections are due to take place on 23 August 2023.

2. Economic Overview

Zimbabwe’s economy is expected to grow by 3.8% in 2023, after growth of around 4% in 2022. Zimbabwe has a strong human capital base, plentiful endowments of land and water, and significant mineral deposits. The economy is mainly driven by its mining and agriculture sectors. Mining is well diversified across a range of minerals (including gold, diamonds, platinum group metals, lithium, iron ore, copper) and contributes more than 12% of gross domestic product (GDP). Agriculture represents approximately 12% of GDP and two thirds of the population engage in it for livelihoods or subsistence, but it remains vulnerable to climate shocks as it relies mainly on rainfall patterns from which seasonal droughts and floods have affected food security. The main risks facing the economy include: availability of power; price and exchange rate instability (high inflation); strict foreign exchange controls; fragile property rights; and external factors such as food and fertiliser price and availability.

Since 2020 Zimbabwe has been running a dual currency system where the US dollar exists alongside the local Zimbabwean dollar. Whilst businesses are currently able to pay overseas suppliers and repatriate profits through the state-managed foreign currency auction, this process has sometimes been slow and unreliable. Reforms introduced in June 2023 to the foreign exchange auction system and interbank market aim to move towards a competitively determined exchange rate and ultimately remove the gap between the official and parallel market rates, which has been a source of arbitrage and economic uncertainty.

Zimbabwe’s debt remains at an unsustainable level due to the accumulation of external arrears and the expansion of domestic borrowing. Zimbabwe’s total consolidated debt stands at $17.5 billion. The Government of Zimbabwe has embarked on a structured dialogue process to engage creditors on arrears clearance. The country currently publishes public debt statistics and debt payment information to ensure transparency and accountability, and the government is making regular token payments to its international creditors.

A lack of clear land rights and tenure has meant Zimbabwe is unable to use agricultural land as collateral, stymying investment in the agricultural sector. The government has announced efforts to introduce land tenure reforms and address farmer compensation issues as part of the ongoing structured dialogue platform.

Electricity shortages are common. Erratic rainfall, under-investment in the sector and overuse of the water resources in the Kariba dam have contributed to electricity shortages. Recent structural reforms to the state utility have reduced its debt burden and there is an increasing focus on renewable energy sources like solar, which presents significant opportunities for private investment.

3. Human rights

Zimbabwe is a UK Human Rights priority country. Restrictions on political and civic space are among the most significant concerns. The UK has sanctions (asset freezes and travel bans) on four Zimbabwean individuals for their involvement in serious human rights violations.

4. Business environment

Zimbabwe sits at 140 (out of 190 economies assessed) in the last World Bank Ease of Doing Business report (2020), an improvement from 155 in 2019. Zimbabwe ranks 124th (out of 137) in the Global Competitiveness Index, which is below the average for Sub-Saharan Africa.

Ease of doing business has been affected by inconsistent policy making, complex and inconsistent regulations, a weak currency, inflation, steep borrowing costs and electricity shortages which have directly affected production and productivity. The informal sector accounts for nearly two-thirds of Zimbabwe’s output and four-fifths of its employment, which is high in comparison with other lower-middle income countries.

High and volatile inflation also makes the business environment more uncertain: many businesses price in US dollars but conducting international transactions can still be cumbersome. Businesses’ primary ask of government is to stabilise the macroeconomy, for example by controlling the money supply, liberalising foreign currency exchange and ensuring greater policy consistency.

Repatriating profits and paying overseas suppliers is cited by international businesses as the main challenge, and exporters to Zimbabwe should engage with their customer and/or bank to ensure that this risk is mitigated.

The Zimbabwe Investment Development Authority was established in 2020 to support investors and can be a good interlocutor for businesses looking to engage with various branches of government.

5. Bribery and corruption

Zimbabwe scored 23/100 in Transparency International’s Corruption Perception Index. A country’s score is the perceived level of public sector corruption on a scale of 0-100, where 0 means highly corrupt and 100 means very clean. There are instances of politically connected individuals being awarded large state contracts or being allocated state-controlled resources such as foreign currency. See the UK’s anti-corruption strategy.

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world. It should be noted that UK bribery legislation also applies to UK registered companies and UK nationals committing acts of bribery wholly outside the UK. Read more information on our Bribery page.

Under the UK’s Global Anti-Corruption sanctions regime, Zimbabwean Kudakwashe Regimond Tagwirei was sanctioned (asset freeze and travel ban) in 2021 for profiting from misappropriation of property when his company, Sakunda Holdings, redeemed Government of Zimbabwe Treasury Bills at up to ten times their official value. His actions accelerated the devaluation of Zimbabwe’s currency, increasing the price of essentials, such as food, for Zimbabwean citizens.

6. Trade Restrictions

There are targeted sanctions against five Zimbabwean individuals, as referenced here. In addition the UK implements an arms embargo and transit restriction on military and dual-use goods trade with Zimbabwe as part of Export Control Order 2008. Further information can be found on UK guidance on current arms embargoes and other restrictions, as well as information on the UK sanctions regime in Zimbabwe.

It should be noted that these are targeted sanctions, and not intended to deter trade and investment with Zimbabwe. Indeed, the UK continues to work with Zimbabwe to increase bilateral trade, with the UK-ESA Economic Partnership Agreement coming into force on 1st January 2021, which gives Zimbabwean businesses duty free and quota free access to the UK market.

7. Terrorism threat

See the FCDO Travel Advice for Zimbabwe for the latest information on terrorism threats.

8. Protective Security advice

See the FCDO Travel Advice for Zimbabwe for the latest information on protective security advice.

9. Intellectual Property

Zimbabwe is a contracting state to the following international legal instruments:

  • ARIPO, both the Banjul Protocol on Marks and the Harare Protocol on Patents and Industrial Designs
  • Berne Convention for the Protection of Literary and Artistic Works
  • Madrid Protocol for the International Registration of Trade Marks
  • Paris Convention for the Protection of Industrial Property
  • Patent Cooperation Treaty
  • TRIPS Agreement
  • WIPO Convention

Most of Zimbabwe’s IP laws are TRIPS-compliant although, in practice, the level of implementation may be different from other countries.

The following IP protection is available in Zimbabwe:

1) Trademarks: national, regional (ARIPO) and international (Madrid)

2) Patents: national and regional (ARIPO)

3) Industrial designs: national and regional (ARIPO)

4) Plant Breeder’s Rights: national

5) Geographical indications: national

6) Layout designs of integrated circuits: national; and

7) Copyright and neighbouring rights: national

IP protection in Zimbabwe can be secured at three levels: national, regional and international. A national route is suitable when trade mark protection is required in Zimbabwe only. A regional route through ARIPO is suitable when multi-country protection of the abovementioned IP rights is required. An international route is advisable for trade mark protection only, when protection is required in more countries than are covered by the ARIPO regional trade mark system.

Infringement is referred to in intellectual property (IP) laws; there is no special IP rights (IPR) enforcement legislation. However, the IP owner must make a complaint to the State through the Zimbabwe Republic Police and justify that a criminal offence has been committed. Although the Zimbabwe Republic Police has begun in recent years to offer training, more IP awareness is still required.

There is an INTERPOL helpdesk within the Zimbabwe Republic Police that coordinates IP enforcement, but in practice, its operations are not sufficient.

10. Organised crime

The risk of organized crime is low in Zimbabwe.

See the FCDO Travel Advice for Zimbabwe for the latest information on crime in Zimbabwe.

Read the information provided on our Organised crime page.

11. Contact details

Contact the British Embassy Harare for more information and advice on opportunities for doing business in Zimbabwe.