Zimbabwe's power crisis wiping out 6,1% of GDP yearly

ZIMBABWE'S unreliable electricity supply is costing the economy an estimated 6.1% of gross domestic product (GDP) every year, with frequent power outages undermining productivity and discouraging investment, the World Bank has warned.

The assessment is contained in the bank's recently released Country Growth & Jobs Report, which says unreliable electricity is imposing significant costs on businesses and the wider economy.

"Limited reliability of Zimbabwe's electricity affects the whole economy. Frequent, prolonged outages raise the cost of doing business, depress firm-level productivity, and push enterprises toward expensive backup generation they should not need. Power shortages cost an estimated 6.1% of GDP each year," the World Bank said.

According to the World Bank Enterprise Survey, more than 52% of firms experienced electrical outages in 2025, with businesses reporting an average of 3.8 outages in a typical month.

The bank said the disruptions were forcing companies to absorb additional operating costs while also discouraging investment because of uncertainty over electricity supplies.

"Firms are absorbing costs that should not exist, and forgoing investments because of uncertain power supply," it said.

The electricity crisis comes as Zimbabwe seeks to accelerate economic growth through mining expansion, agricultural mechanisation and increased private-sector investment, sectors that will require significantly more reliable power.

Medium-term planning projections indicate that peak electricity demand could increase from 1 950 megawatts in 2022 to 5 177MW by 2030, driven largely by expanding mining operations and agricultural mechanisation.

"This suggests a major need for investment in energy expansion," the World Bank said.

Meeting the projected demand will require Zimbabwe to add substantial generation capacity while simultaneously strengthening its transmission and distribution infrastructure.

The World Bank warned that unreliable electricity was particularly damaging to small and rural businesses, which often lack the resources to maintain expensive backup power systems.

"Without electricity, small enterprises cannot operate machinery, cannot store products, and cannot compete in value chains that require reliable inputs," the bank said.

The electricity access deficit therefore extends beyond household welfare, with inadequate power limiting the ability of rural enterprises to expand, preserve goods and participate effectively in formal supply chains.

Zimbabwe's ambition to achieve universal electricity access by 2030 will also require a major acceleration in the rate at which new connections are made.

According to the World Bank, annual connections would need to increase from roughly 25 000 in 2020 to about 537 000 a year, alongside major investment in generation and grid infrastructure.

"It would also require about US$4.4 billion in grid network expansions by 2030," the bank said.

The World Bank's assessment highlights the scale of Zimbabwe's energy challenge, with improvements in reliability and access increasingly critical to unlocking private investment, raising productivity and supporting the country's broader economic growth ambitions.