Zimbabwe's economic stability claims challenged

The Zimbabwe Coalition on Debt and Development (Zimcodd) has challenged government assertions that the economy is stabilising, arguing that macroeconomic gains are failing to ease the financial pressures faced by ordinary citizens.

This follows the Zimbabwe National Statistics Agency (ZimStat)'s report that the ZiG annual inflation rate fell to 4,1 percent in January, a drop of 10,9 percentage points from December 2025.

The Reserve Bank of Zimbabwe and Treasury welcomed the decline, describing it as evidence that tight monetary and fiscal policies were yielding results.

However, Zimcodd said the headline figures do not reflect the lived realities of many Zimbabweans.

"For many ordinary people in Zimbabwe, the economy is not experienced through inflation graphs or exchange-rate tables, but through the daily struggle to stretch shrinking incomes across food, transport, school fees and rent," the coalition said in its latest Weekender Review.

Last week, the Confederation of Zimbabwe Industries (CZI) also urged caution, warning that the return to single-digit inflation remains fragile without sustained fiscal and monetary discipline.

Zimcodd argued that higher indirect taxes have had a more immediate impact on households than falling inflation. In January 2026, Government increased the standard Value Added Tax (VAT) rate, raising the cost of goods and services.

"At the same time, charges on electronic transfers, card payments and cash withdrawals continue to add hidden layers of cost to ordinary transactions. For low-income families who spend most of their income on necessities, these taxes are not abstract fiscal tools, but they are daily penalties on survival," the coalition said.

The group cited findings from the 2025 Zimbabwe Tax Perception Survey, which showed that nearly nine out of 10 citizens believe the tax burden no longer aligns with their ability to pay.

"Zimbabwe's economy remains highly informal and international evidence consistently shows that consumption-based taxes are regressive, meaning poorer households spend a larger share of their income on taxed goods and services," Zimcodd said.

The coalition noted that female informal traders are particularly affected, as rising transaction costs and subdued demand are forcing longer working hours, narrowing profit margins and increasing reliance on short-term borrowing.

"From a civil society perspective, the central concern is not only how much revenue the State raises, but who carries the burden. Zimbabwe continues to face high poverty levels, with national statistics showing that more than half of the population lives below the poverty line," Zimcodd said.

It acknowledged that development partners such as the World Bank and the International Monetary Fund continue to stress macroeconomic stability and fiscal discipline as foundations for recovery.

However, Zimcodd warned that stability achieved through heavy reliance on consumption and transaction taxes risks deepening inequality.

"Currency calm and lower headline inflation may reassure markets, but for households facing rising everyday costs and insecure incomes, progress must be measured differently, by whether people can afford food, transport, healthcare and dignity," the coalition said.

"Until fiscal reforms actively protect low-income and informal workers, especially women, economic ‘stability' will remain a statistic rather than a shared reality."