SA's RMB projects Zimbabwe gloom

Zimbabwe has been rated as the least attractive country for investment in Africa by South African investment bank Rand Merchant Bank (RMB), which cited persistent economic instability, high inflation, and weak investor confidence as major deterrents.

The findings are contained in RMB's latest Where to Invest in Africa 2025/26 report, released on Monday. The annual publication evaluates 31 African economies using key indicators such as economic performance, market accessibility, stability, and human development to guide potential investors.

According to the report, Zimbabwe ranked 31st - the lowest position on the continent - showing no improvement from the previous year.

"Zimbabwe remains at the bottom of the rankings," RMB stated. "Broadly, Zimbabwe is a challenging business and investment environment. Basics, such as currency stability, put it beyond the mandate or appetite of many capital allocators."

The bank said that while the country presents isolated areas of progress, such as growth in tourism, steel and lithium investments, and a doubling of blueberry exports, these improvements are too limited to alter Zimbabwe's overall risk profile.

"Small, positive indicators include a doubling of blueberry output. Small movements like this will not move the needle in the rankings, but they highlight the need for nuanced analysis," the report said.

Zimbabwe continues to grapple with deep-rooted economic challenges, including chronic foreign exchange instability, erratic power supply, restricted property rights, rising taxes and fees, and difficulties in repatriating profits - all of which deter foreign direct investment (FDI).

According to the United Nations Conference on Trade and Development (UNCTAD) 2025 World Investment Report, Zimbabwe received FDI inflows of US$597 million in 2024. Analysts say this shows that while the lifting of US sanctions in March 2024 provided some relief, long-term structural problems remain a major obstacle.

RMB's detailed scoring placed Zimbabwe low across most key indicators - giving it 35% for economic performance and potential, 25% for stability and investment climate, 20% for market accessibility and innovation, and another 20% for social and human development.

The report also noted that despite the introduction of the Zimbabwe Gold (ZiG) currency in April 2024 - designed to stabilise prices and restore confidence - inflation remains alarmingly high.

"Despite the launch of the ZiG currency with the intention of monetary stability, Zimbabwe's excessive inflation rate continues unabated," RMB said. "The IMF foresees a consumer price inflation rate of 92% for 2025. Economic pressure has grown with the 2024 drought, which cut agricultural output by 15%."

Nonetheless, the report pointed to a few signs of optimism. In mid-2025, the International Monetary Fund described Zimbabwe as "experiencing a degree of macroeconomic stability" due to "more disciplined policies."

The IMF projects the economy to grow by 6% in 2025, supported by recovering agricultural production and strong gold prices - a key export that now accounts for nearly a third of the country's foreign currency earnings.

Despite these modest gains, RMB concluded that Zimbabwe still faces a long road to becoming a competitive investment destination, warning that without consistent reforms, stability, and investor-friendly policies, the country will remain on the margins of Africa's economic growth story.