ANNUAL FINANCIAL
STABILITY REPORT

Contents


List of Figures
Figure 15: Volume of Shares Traded in millions (Zimbabwe Stock Exchange 2019- 2024) ... 28


List of Tables

PURPOSE OF THE REPORT
The Report provides an overall assessment of financial stability in 2024, considering potential
risks to financial stability and mitigants thereof. The report also serves to promote the mitigation
of systemic risks by stimulating market participants' evaluation of the wide range of risk factors
in the financial sector in the context of developments in domestic, regional, and global
environments.
This report is produced in fulfilment of the mandate of the Multidisciplinary Financial Stability
Committee to promote financial stability. The Multidisciplinary Financial Stability Committee is
constituted by the Ministry of Finance, Economic Development & Investment Promotion, Reserve
Bank of Zimbabwe, Insurance & Pensions Commission of Zimbabwe, Securities & Exchange
Commission of Zimbabwe, and the Deposit Protection Corporation. The report is published
annually and incorporates significant developments that have an impact on financial stability at
the time of finalisation of the report.

GOVERNOR’S FOREWORD
Risks to global financial stability moderated in 2024 against the backdrop of recovery in global
output, declining inflation in the wake of accommodative financial conditions, as well as
enhanced crisis management and resolution approaches by supervisory authorities as part of
post global financial crisis reforms. Lingering geopolitical tensions, increasing sovereign debt
vulnerabilities in some emerging markets, as well as potential trade wars, however, created
uncertainties that continued to weigh on the global financial stability outlook.

Against this background, growth of the global world economy is projected to decline from an
estimate of 3.3 percent in 2024 to 2.8 percent in 2025, before rebounding to 3 percent in
2026 (WEO, April 2025). Anticipated growth slowdown in 2025 largely reflects the direct and
second round impact of the new trade measures instituted by the United States, as well as
their indirect effects through trade linkages, increased uncertainty, and declining sentiment.
The swift escalation of trade wars and high levels of policy uncertainty are expected to have
a significant impact on global economic activity.

Among major global economies, growth momentum in the United States remained robust in
2024, while growth in China was below expectations amid delayed stabilization in the property
market and persistently low consumer confidence (WEO, 2024). In Emerging Markets and
Developing Economies (EMDEs), growth is estimated to have remained moderate in 2024 and
is expected to remain steady in 2025. Economic activity in sub-Saharan Africa improved
significantly in 2024, exceeding expectations with growth averaging 4.0 percent in 2024,
driven primarily by public investment, commodity exports, and ongoing efforts at
diversification. Growth in Sub-Saharan Africa is expected to decline slightly to 3.8 percent in
2025 and recover modestly to 4.2 percent in 2026.

Climate-related financial risks and cyber threats contributed to a complex risk environment
requiring coordinated and strategic interventions by financial authorities worldwide. The
growing role of non-bank financial institutions (NBFI) (including insurance companies,
pension funds, and investment funds), amid increased interconnectedness with banks, has
heightened the sector’s influence on systemwide financial stability. Strengthening the
regulation of non-bank financial institutions, therefore, remains a priority.

On the domestic front, economic growth decelerated from 5.3% in 2023 to an estimated 2%
in 2024, owing to the severe El-Nino-induced drought, which undermined agricultural and
hydroelectricity production. The reduced growth reflected the moderating effects of price and
exchange rate stability following the recalibration of the monetary policy framework in order
to address volatilities experienced during the year. At the core of the revised monetary policy
framework was the introduction of the structured currency, the Zimbabwe Gold (ZiG) on 5
April 2024, backed by a basket of foreign reserves, including gold and foreign currency.
Stability in the operating landscape was further buttressed by favourable foreign currency
receipts which boosted the country’s balance of payments position, expected to record a
current account surplus for the sixth consecutive year beginning in 2019. Fiscal consolidation
also played a key role in stabilising the operating environment.

Notwithstanding the global as well as domestic headwinds, the Zimbabwean banking system
demonstrated remarkable resilience, characterised by satisfactory capital adequacy, asset
quality and earnings performance, as well as robust liquidity. Macroeconomic stabilisation and
financial stability enhancement initiatives, coupled with resilience capability management on
the part of banking institutions, underpinned the banking sector’s resilience.

Stable and efficient national payment systems as well as favourable foreign exchange
generation capacity also bolstered financial stability. Financial inclusion efforts targeted at
Micro, Small and Medium Enterprises and other currently lowly financially included population
segments continued to promote the economic participation of these segments, with positive
impact on economic growth and development, as well as financial stability.

Notwithstanding liquidity constraints during the year under review, capital markets exhibited
notable resilience, as evidenced by robust retail investor participation and heightened activity
on direct trading platforms (such as the Victoria Falls Stock Exchange and similar platforms),
which registered a 117% increase in turnover to USD56.9 million. Conversely, the Zimbabwe
Stock Exchange recorded a 33% decline in trade volumes.

The Deposit Protection Corporation (DPC)’s strategic shift toward portfolio diversification
across property, equities, money markets, and alternative investments not only supports

long-term fund sustainability but also strengthens the shock-absorbing capacity of the
financial safety net and underpins depositor confidence and financial stability. The
Corporation also undertook several strategic initiatives that reinforced the stability of
Zimbabwe’s financial sector, including amendments to the DPC Act, and enhanced compliance
with international best practices.

The Insurance and Pensions Commission has initiated amendment of the existing legal
framework to enable the incorporation of medical aid societies under the Commission’s
regulatory oversight, as well as the creation of a Policyholder Protection Fund. These efforts
are aimed at strengthening the resilience and integrity of Zimbabwe’s insurance landscape.
Finalisation of the compensation exercise in line with the pre-2009 Pensions Compensation
Regulations remains vital in restoring confidence in the sector.

During the year, the Multi-Disciplinary Financial Stability Committee continued to discharge
its mandate through quarterly meetings and ongoing financial stability assessments. The
Ministry of Finance, Economic Development, and Investment Promotion became a member
of the Committee in the fourth quarter of 2024. The development and operationalization of
the Contingency Planning and Systemic Crisis Management Framework and a comprehensive
Macroprudential Policy Framework reflect the regulatory agencies' commitment to proactive
crisis preparedness and resolution of distressed financial institutions. Technical support from
international and regional strategic partners has been instrumental in reinforcing these
efforts.

As the financial ecosystem becomes increasingly digitized, regulatory agencies continue to
prioritize cyber resilience. Banks enhanced their cyber risk management frameworks,
supported by supervisory guidance, scenario testing, and increased investment in digital
security. The strengthening of AML/CFT/CPF supervisory activities also reinforced trust in the
financial system and aligned Zimbabwe more closely with international standards. The
financial sector regulatory agencies remained resolutely focused on the integration of
sustainability as well as environmental, social and governance considerations into the core
operations and decision-making process of financial institutions.

In 2025, global and domestic risks are anticipated to persist, including uncertainty over the
direction of global interest rates, commodity price fluctuations, the climate risk impacts on
agriculture-linked exposures, as well as geopolitical tensions. As domestic financial sector
agencies, we will continue to ensure that the financial sector remains robust and resilient
through forward-looking macroprudential policies.
Finally, I would like to acknowledge the efforts of the Ministry of Finance, Economic
Development and Investment Promotion, financial sector regulators, and all financial market
participants for their unwavering collaboration in safeguarding the stability of Zimbabwe’s
financial system. Together, we remain committed to creating a sound, inclusive, and futureready financial system that supports sustainable economic growth and development.
Dr. J. Mushayavanhu
Governor
Reserve Bank of Zimbabwe

EXECUTIVE SUMMARY

Global financial stability risks moderated in 2024 as the world economy continued its post-pandemic recovery. Enhanced
crisis management and resolution mechanisms, along with macroprudential policies adopted by most supervisory
authorities as part of post-global financial crisis reforms, contributed to the resilience of the global banking system.
Geopolitical tensions, particularly conflicts in the Middle East and the Russia-Ukraine war, as well as persistent global
trade frictions, remained elevated during the year.

On the domestic front, microstructure and macrostructure dynamics contributed to moderate financial stability risks. At
the macrostructure level speculative foreign exchange holdings and activities that have characterised the multicurrency
regime invariably culminated in exchange volatility and related inflationary pressures during the first quarter of 2024.
The risks were moderated by inter-alia, tight monetary policy, introduction of a structured currency, the Zimbabwe Gold
(ZiG), backed by gold and other foreign assets, adoption of a market determined foreign exchange rate, as well as
interventions by the Reserve Bank to smoothen liquidity in the foreign exchange market. Financial stability
enhancements by regulatory agencies, as well as resilience capability management by banking institutions fortified the
financial sector against various shocks and sources of instability.

The financial system faces climate-related risks, including droughts and floods. Authorities and regulated institutions are
embedding ESG principles and climate considerations into their risk frameworks, including investments in clean energy.

Against the background of the foregoing, the banking sector exhibited robustness and resilience, reflected by adequate
capitalisation, satisfactory asset quality and earnings, as well as strong liquidity. Anticipated risks from the El Nino
induced drought were mitigated by enhanced risk management at banks, including targeted lending to farmers with
climate proofed infrastructure, as well as ring-fencing of financed commodities.

Payment Systems exhibited resilience with rising digital transactions and high RTGS (real-time gross settlement) system
uptime (99%). The Reserve Bank upgraded systems to ISO 20022 standards and improved cross-border payment
linkages.

Major risks to financial stability in 2024 were macroeconomic risks, operational risk incorporating cyber, and climaterelated risks, which were moderated by various mitigants. Insurance and pensions sector stability was maintained,
despite undercapitalization risks and corporate governance gaps. Dollarization intensified with approximately 80% of
short-term and 65% of life insurance business denominated in USD. Capital markets also depicted resilience
notwithstanding underlying liquidity challenges that resulted in potential investors opting for alternative investments.

At $21.1 billion as of September 2024 and constituting 23.58% of GDP Zimbabwe’s public external and domestic debt
is unsustainable, highlighting the need to maintain ongoing debt resolution strategies. The National Budget (2025) also

noted the importance of prudent management of contingent liabilities and adherence to approved budgetary provisions
as essential elements of safeguarding public finances and supporting overall macroeconomic stability.

Global, regional and domestic growth prospects in 2025 and 2026 are likely to be affected by mounting geopolitical
tensions, as well as retaliatory tariff restrictions. These, coupled with structural rigidities in the Sub-Saharan African
Region, including uneven growth, conflicts, droughts, and financing constraints, will continue to affect Zimbabwe’s
financial stability profile.

1. GLOBAL MACROECONOMIC AND FINANCIAL
DEVELOPMENTS
1.1
Global financial stability risks moderated in 2024
as the world economy continued its postpandemic recovery. This was supported by a
rebound in global output and a decline in inflation,
primarily driven by accommodative financial
conditions (World Economic Outlook (WEO),
January 2025).
1.2
Enhanced crisis management and resolution
mechanisms, along with macroprudential policies
adopted by most supervisory authorities as part
of post-global financial crisis reforms, contributed
to the resilience of the global banking system.
However, geopolitical tensions, particularly the
conflicts in the Middle East and the RussiaUkraine war and persistent global trade frictions,
remained elevated during the review period (IMF
Financial Stability Report, October 2024).
1.3
The United States maintained strong growth
momentum in 2024, with its economy expanding
by 2.8%, underpinned by strong wealth effects
and a relatively accommodative monetary policy
stance. Meanwhile, China’s growth rate of 5.0%
fell short of expectations, reflecting delayed
stabilization in the property sector and sustained
weakness in consumer confidence (WEO, April
2025). Growth prospects in China have potential
implications for Zimbabwe’s economic well-being,
considering
the
high
degree
of trade
interdependence reflected in the two countries’
significant merchandise trade flows.
1.4
Against this backdrop, global economic growth for
2024 was 3.3%, with projections indicating a
slowdown to 2.8% in 2025, before rebounding to
3.0% in 2026 (WEO, April 2025). Anticipated
growth slowdown in 2025 largely reflects direct
impact of the new trade measures by the United
States, as well as their indirect effects through
trade
linkages,
increased
uncertainty,
and
declining sentiment. The swift escalation of trade
wars and extremely high levels of policy
uncertainty are expected to have a significant
impact on global economic activity.
1.5
Following the election of a new government in
the USA in 2024, and associated rising
uncertainty, equities that had rallied in advanced
economies in 2024 on expectations of more
business-friendly policies in the United States
tumbled
following
the
announcement
of
sweeping US reciprocal tariffs on April 2, 2025,
which sent markets reeling. United States stocks
shed $5.4 trillion in value over two days, while
equities in Asia also tumbled, and oil prices hit a
four-year low (WEO, April 2025).
1.6
According to IMF projections (World Economic
Outlook,2024), policymakers in Sub-Saharan
Africa faced three primary challenges in
addressing regional economic imbalances.
1.7
Firstly, regional growth which is estimated at 4%
in 2024 (WEO, April 2025 Reference Forecasts),
is
characterized
by
uneven
performance.
Secondly,
resource-intensive
economies,
especially
oil
exporters,
continued
to
underperform, growing at about half the pace of
other countries in the region. Contributing
factors included conflict, insecurity, drought
conditions, and energy shortages.
1.8
Secondly, domestic and external financing
conditions remained tight, with limited access to
affordable financing options.
1.9
Thirdly, deep-seated structural pressures, such
as high poverty levels, limited inclusion and
employment
opportunities,
and
weak
governance, were further compounded by rising
living costs and the short-term effects of
macroeconomic adjustments. These dynamics
exacerbated social unrest and increased political

pressure,
thereby
complicating
reform
implementation across the region (WEO, Oct
2024).
1.10
The developments in Sub-Saharan Africa have
significant implications for Zimbabwe, given the
country’s trade relationships within the Southern
African Development Community (SADC) and the
Common Market for Eastern and Southern Africa
(COMESA).
1.11
Commodity prices are projected to fall sharply this
year (2025), by about 12 percent overall, as
weakening global economic growth weighs on
demand. In 2026, commodity prices are projected to
decline by another 5 percent, reaching a six-year
low. Oil prices are expected to decline significantly
as slowdown in global oil consumption coincides with
expanding supply.
1.12
Metals and minerals prices are projected to decline
by 10 percent in 2025 and 3 percent in 2026 owing
to the anticipated slowdown in global economic
growth.
1.13
Precious metals prices are expected to rise sharply
in 2025 before stabilizing in 2026, sustained by
strong safe-haven demand amid elevated policy
uncertainty, financial volatility, and rising trade
tensions, and by further increases in central bank
holdings.
1.14
Major central banks were expected to continue
lowering policy interest rates, albeit at varying
paces, in response to differing growth and inflation
outlooks, a development that would moderate cost
implications in countries reeling from debt overhang.
The global developments in both commodity and
non-commodity
markets,
alongside
evolving
inflation dynamics, are expected to exert mixed
effects on the Zimbabwean economy.
1.15 Table 1 shows regional economic growth
developments and outlook.

Table 1: Global & Regional Economic Growth
Developments & Outlook
Region/Country

Est.

Proj

Proj.
World Output
3.3
2.8
3.0
Advanced Economies
1.8
1.4
1.5
USA
2.8
1.4
1.7
Euro-Area
0.9
0.8
1.2
Emerging Markets &
Developing Economies
4.3
3.7
3.9
China
5.0
4.0
4.0
India
6.5
6.2
6.3
Russia
4.1
1.5
0.9
Sub Saharan Africa
4.0
3.8
4.2
Nigeria
3.4
3.0
2.7
South Africa
0.6
1.0
1.5
Zimbabwe
1.8
6.0
5.0
Malawi
1.8
3.5
4.3
Zambia
4.0
6.2
6.8
Source: WEO April 2025 Reference Forecasts
Global Inflation
1.16 Risks to financial stability were expected to
abate in 2025 in view of the expected decline in
global headline inflation, from an average of
5.8% in 2024 to 4.2% in 2025 and 3.5% in
2026. This was attributable to the lagged effects
of tight monetary policies as well as decreasing
pass-through impacts from previous price
reductions, particularly for energy (WEO, 2024).
1.17 According to the WEO (2025), inflation dynamics
could, however, be shaped by supply-side
shocks such as labour force disruptions driven
by reductions in labour flows to the USA, which
may permanently reduce potential output and
raise inflation. This may be aggravated by
escalation of retaliatory tariffs.

2.
DOMESTIC DEVELOPMENTS
Overview
2.1
In addition to global financial stability risks, the
domestic risk profile was elevated by the ELNino-induced drought which turned out to be
more severe than initially anticipated, as well as
inflationary pressures, and exchange rate
volatilities. Other downside risks which affected
the domestic growth trajectory, included a
slowdown in commodity prices and subdued
aggregate demand.
2.2
The downside risks were moderated by a
positive growth path in sectors such as
construction and tourism, which contributed to
the economy’s resilience according to the
National Budget Statement (Government of
Zimbabwe, 2024). Proactive monetary and fiscal
policies further moderated risks to financial
stability.
2.3
On the fiscal side, Zimbabwe’s public debt,
including both external and domestic debt
($21.1
billion
as
of
September
2024),
constituting 23.58% of GDP, is unsustainable,
highlighting the need to maintain ongoing debt
resolution discussions.
2.4
Prudent management of contingent liabilities
and
adherence
to
approved
budgetary
provisions
are
essential
elements
of
safeguarding public finances and supporting
overall macroeconomic stability (Government of
Zimbabwe, 2025).
Financial System Assets
2.5
The systemic dominance of the banking sector
was amply demonstrated by its significant
proportion of financial system assets (47.01% as
at 31 December 2024, as shown in Figure 1.
2.6
The financial system architecture also depicts
the systemic significance of the capital markets,
underscoring the need to operationalise the
macroprudential policy framework.
Figure 1: Financial System Assets as at 31 December 2024
Source: Reserve Bank of Zimbabwe, 2024
Inflation Pressures
2.7
Inflationary pressures posed a threat to financial
stability in 2024. After decelerating during the
last quarter of 2023 in the wake liberalisation of
the
exchange
rate,
supported
by
the
requirement for payment of taxes in local
currency, inflation rebounded to a peak of
55.3% in March 2024, from 47.6% in February
2024 (Zimbabwe National Statistics Agency
ZimStat, 2024), driven by a weakening exchange
rate.
2.8
To tackle the inflation challenges, the Reserve
Bank
recalibrated
the
monetary
policy
framework. At the core of the new framework,
was the introduction of a structured currency,
the Zimbabwe Gold (ZiG) in April 2024 which has
Banking
Institutions
ZiG161.58B
n
47.01%
Funds
Under
Managemen
t & CIS
(AMCs)
ZiG90.16Bn
26.23%
Pension
Funds
ZiG58.28Bn
16.96%
Insurance
Companies
ZiG25.07Bn
7.29%
Microfinance
Institutions
ZiG8.59Bn
2.50%
FINANCIAL SYSTEM ASSETS

been relatively stable since its introduction. This
was complemented by tight monetary policy.
2.9
As inflation decelerated the Bank policy rate was
recalibrated from 130% to 20% in April 2024,
with a corridor of 11-25%, in line with the
envisaged inflation profile for ZiG. Stability in the
operating landscape was further buttressed by
favourable foreign currency receipts which
boosted the country’s balance of payments
position, expected to record a current account
surplus for the sixth consecutive year beginning
in 2019.
2.10
After a period of relative price stability between
April and August 2024, supported by a tight
monetary policy stance, with average inflation
recorded at -0.82%, inflationary pressures reemerged in the latter half of August 2024, driven
by widening premiums on the parallel market
exchange rate, resulting in a month-on-month
inflation rate of 1.4%. The realignment of the
exchange rate in September 2024, in line with
economic fundamentals, heightened exchange
rate pressures, resulting in the Reserve Bank
tightening further the monetary policy to foster
stability.
2.11
Against this background, the economy grew by
an estimated 2 per cent in 2024, driven by
performance in construction and tourism sectors
as well as resilient consumer demand, though
macroeconomic imbalances persisted. In the
outlook, economic growth is projected at 6% in
2025. Underlying assumptions underpinning the
projections include normal to above-normal
rainfall, which is expected to result in increased
agricultural production,
as well as stable
exchange
rate
and
low
inflation.
These
developments, coupled with tight fiscal and
monetary policies, are envisaged to provide a
stable macroeconomic environment and a
conducive business environment.
Interest Rates
2.12
Sustained efforts to contain inflation culminated
in the upward adjustment of the Bank Policy rate
from 20% to 35% during the last quarter of
2024.
The
tight
monetary
policy
was
complemented
by
upward
revision
and
standardisation of statutory reserve ratios for
demand and call deposits from 15% and 20% to
30%, respectively (for both local and foreign
currency
deposits).
Concurrently,
statutory
reserve ratios for savings and time deposits were
increased from 5% to 15% (both local and
foreign currency deposits).
2.13
The tight monetary policy exerted upward
pressure on interest rates, with lending rates for
foreign currency-denominated loans advanced
to individuals ranging between 6.50% and
20.00% per annum. Foreign currency lending
interest rates for corporate clients ranged from
a minimum of 5.00% to a maximum of 20.00%,
as shown in the figure below.
Figure 2: Interest Rates Developments (%)

Source: Reserve Bank of Zimbabwe, Economic
Research 2024
2.14
While tight monetary policy is essential in
stabilising the exchange rate, as well as laying

90 -day Deposits Rates
Max Individual Weighted Lending Rates
Min Individual Weighted Lending Rates
Policy Rate

the foundation for sustainable economic growth,
it inevitably introduces challenges to both the
real sector and the financial system. Specifically,
elevated interest rates can increase inherent
credit risk, as they may adversely affect
corporate viability and heighten the likelihood of
credit defaults, with far reaching ramifications on
bank asset quality.
2.15
Recognising these potential downside risks of
tight monetary policy, the Reserve Bank
introduced the Targeted Finance Facility (TFF),
which is availing funds to productive sectors of
the economy at relatively lower interest rates.
The facility, which is accessed through banks,
has been instrumental in providing targeted
support to the productive sectors of the
economy, ensuring that businesses continue to
access affordable financing even in a tight
monetary
environment.

This
strategic
intervention has played a significant role in
sustaining
industrial
activity,
promoting
innovation, and enhancing the overall resilience
of
the
economy
despite
prevailing
macroeconomic pressures (Monetary Policy
Statement, August 2024).
2.16
The inherent credit risk was also effectively
mitigated through the implementation of robust
risk management frameworks within banking
institutions. The cautious approach to lending
adopted by most banks to mitigate credit risk,
however, adversely affects banking institutions
financial intermediation role, to the detriment of
financial
stability.
Ongoing
macroeconomic
stabilisation measures that create a conducive
environment
for
operational
viability
are,
therefore, critical.
Exchange Rate Developments
2.17
To facilitate a more stable price discovery
mechanism and stabilise the exchange rate, the
Reserve Bank adopted a refined foreign
exchange market determined system on 5 April
2024, under the Willing-Buyer and Willing-Seller
(WBWS) principle (Reserve Bank of Zimbabwe,
2024 Annual Report). To support this system,
the Reserve Bank actively intervened in the
interbank market to address supply-demand
imbalances and promote effective trading,
utilising 50% of the 25% surrender requirement.
2.18
The further tightening of monetary policy in
September 2024 brought about exchange rate
stability, as shown by Figure 3, for the period
from 15 April 2024 to 30 September 2024 just
before the exchange rate realignment was
effected.
Figure 3: ZiG/US$ Exchange Rates– Apr-Dec 24
Source: Reserve Bank of Zimbabwe MPS, 2025


15-Apr-24
25-Apr-24
05-May-24
15-May-24
25-May-24
04-Jun-24
14-Jun-24
24-Jun-24
04-Jul-24
14-Jul-24
24-Jul-24
03-Aug-24
13-Aug-24
23-Aug-24
02-Sep-24
12-Sep-24
22-Sep-24
02-Oct-24
12-Oct-24
22-Oct-24
01-Nov-24
11-Nov-24
21-Nov-24
01-Dec-24
11-Dec-24
21-Dec-24
31-Dec-24
PREMIUM (RHS)
INTERBANK RATE
PARALLEL RATES (Transfer)

2.19
The stability of the exchange rate and inflation,
coupled with efficient banking and payment
systems, will continue to support the country’s
resilience towards a sustainable economic recovery
in the medium-to-long term. The favourable
monetary and financial conditions created a
conducive environment for sustained economic
resilience and growth, achieving 2% in 2024 as
initially projected (Reserve Bank of Zimbabwe,
2024).
2.20
It is also noted that the planned adoption of a
modern foreign currency flow administration,
accounting, and management framework by the
Reserve Bank, will introduce robust cross-border
reporting systems and effective tracking of foreign
currency flows and support both trade (exports and
imports) and investment activities (debt and
equity). The framework will also simplify the
administration of foreign exchange transactions,
making it easier to conduct cross-border trading and
investment.
Monetary Developments
2.21
The broad money (M3) stock stood at ZiG78.91
billion as at end-December 2024, largely comprised
of foreign currency deposits (83.3%), with local
currency deposits constituting 16.63% of total.
Currency in circulation was negligible (0.11%) as
noted in the Reserve Bank of Zimbabwe's (RBZ)
Monthly Economic Review, of December 2024.
2.22
As of December 2024, private sector loans and
advances stood at ZiG55.47 billion, making up the
largest share of total domestic credit, which
amounted to ZiG74.54 billion, while net claims on
the Government accounted for ZiG17.32 billion. The
dominance of private sector credit highlights a
supportive financial environment where businesses
maintain access to funding, facilitating the drive
towards productive economic activities which
contribute to overall economic growth.
2.23
The high level of financial dollarisation creates
structural challenges where some players would
source foreign currencies from parallel markets
at a premium and sell products in formal markets
based on relatively lower exchange rates,
thereby creating operational viability challenges.
The Reserve Bank has since mitigated this risk
by establishing the Willing Buyer Willing Seller
market for foreign exchange.
2.24
Figure 4 illustrates the monetary developments
from April to December 2024.
Figure 4: Monetary Developments
Source: Reserve Bank of Zimbabwe, 2024
2.25
Holdings of Government debt in the banking
sector have progressively increased over the
years and stood at ZiG10.94 billion (11.29% of
GDP) as at 31 December 2024. A deep and
robust secondary market for government paper,
-10

Currency in Circulation
Local Currency Deposits
Foreign Currency Accounts
Monthly changes

therefore, remains a top priority to ensure
smooth liquidity in the financial system.
2.26
Figure 5 shows the component and month-onmonth broad money supply for the period April
2024 to December 2024.
Figure 5: Money-Supply Growth (M3) Apr–Dec 2024
2.27
To mitigate the inflationary effects of excessive
money supply growth and ensure stability, the
Reserve Bank undertook
various measures,
including open market operations (OMO),
adjustments in statutory reserve requirements
and intervention in the FX market through
foreign exchange sales or purchases.
2.28
The Reserve Bank also employs an Optimal
Liquidity
Level
(OLL)
with
each
bank
participating on ZETSS allocated its limit based
on its statutory reserve levels. The OLL,
previously set at ZiG 166.3 million on April 5,
2024, was reviewed upward to ZiG 500 million
on September 30, 2024.
Source: Reserve Bank of Zimbabwe,.2024

BROAD MONEY-M3

3.
CONDITION AND PERFOMANCE OF THE
ZIMBABWE BANKING SECTOR
3.1
The banking sector depicted resilience in 2024
notwithstanding
the
dynamic
operating
landscape
characterised
by
inter-alia,
inflationary pressures, relatively high interest
rates, volatile exchange rates, as well as
emerging
and
amplified
financial
and
operational risks.
3.2
On aggregate, the condition and performance
of the banking sector remained satisfactory
during the year, as indicated by key financial
soundness indicators, which depicted adequate
capitalisation, satisfactory asset quality, robust
liquidity positions, as well as sustained
profitability, as shown in figure 6 below.
3.3
High capital buffers in the sector, reflected by
an average capital adequacy ratio of 34.89%,
demonstrated resilience on the back of the
changing operating environment. The high
capital buffers, spurred by sustained earnings
supported by satisfactory asset quality and
strong risk management systems, reinforce
banking institutions’ ability to withstand shocks.

Figure 6: Key Financial Soundness Indicators

Source: Reserve Bank of Zimbabwe, 2024

3.4
The average capital adequacy ratio for the five (5)
Domestic Systemically Important Banks’ (DSIBs)
remained high, at 26.26%, from 28.4% in 2023,
further buttressing banking sector resilience. The
trend in average capitalisation for the banking sector
is presented in figure 7 below.
Figure 7: Banking Sector Capital Adequacy Ratio Trend (%)
Source: Reserve Bank of Zimbabwe,(2024)
3.5
The Reserve Bank conducts micro-stress stress on
individual banking institutions on a quarterly basis as
an integral component of its supervisory tools and
methodologies. The stress tests, which entail
subjection of banks to shock scenarios in relation to
credit, interest rate, liquidity and foreign exchange
shock scenarios, are designed to identify potential
weaknesses that may require corrective action, as
well as measure banking institutions’ ability to
withstand adverse conditions.
3.6
Stress tests conducted as at 31 December 2024
showed that the sector is generally resilient to various
shock scenarios. Under the most severe scenarios,
1 The Herfindahl-Hirschman Index is an index that measures
market concentration. It is computed as follows
HHI=s_1^2+s_2^2+⋯+s_n^2= ∑_(i=1)^n▒s_i^2
Where s_i is a banking institution’s share of total banking sector
assets.
capital
adequacy
ratios
remained
above
the
regulatory minimum of 12%.
3.7
The stress test results highlighted the importance of
maintaining strong capital buffers.
Banking Sector Concentration
3.8
Concentration risk
in the banking sector, as
measured by the Herfindahl -Hirschman
Index
(HHI)1, continued to be low in 2024, with a score of
1026 as shown in Figure 8. The HHI is a widely used
indicator of market concentration calculated based
on the distribution of asset market shares among
banking institutions. HHI scores of less than 1500
depict low concentration, while
HHI scores of
between 1,500 and 2500 and those in excess of
2500 reflect moderate and high concentration,
respectively.
3.9
Low HHIs indicate a reduced likelihood of market
dominance by a few large players, thereby
supporting a competitive environment that provides
conditions for promotion of better pricing, enhanced
innovation, and greater consumer choice
Figure 8: Herfindahl-Hirschman Index
Source: Reserve Bank of Zimbabwe, 2024
HHI of between 1 500 and 2 500 points to moderate
concentration, while HHI greater than 2 500 points to high
concentration.


Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Mar-24
Jun-24
Sep-24
Dec-24

Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24
HHI Index December 2018 -
December 2024
HHI
Concentration Threshold

3.10
The market share of the five Domestic Systemically
Important Banks (DSIBs) was 62.40% based on
banking sector total asset base of ZW$34.41 trillion.
3.11
DSIBs are designated in with the requirements of
Prudential Standard 01-2020/BSD: Framework for
Dealing with Domestic
Systemically Important
Financial Institutions (DSIBs) issued in 2020. In line
with best practice, the DSIBs are required to
maintain capital buffers above minimum regulatory
capital thresholds, as well as apply stricter stress
testing scenarios in their risk management
frameworks.
3.12
Capital adequacy ratios for DSIBs ranged from
16.15% to 31.26%, with an average ratio of
26.65% as at 31 December 2024.
Financial Intermediation
3.13
A vital aspect of financial stability is the banking
sector’s ability
to perform its
core functions,
including financial intermediation. The level of
financial intermediation remained stable as reflected
by total loans-to-total deposits (L/D) ratio of 58.27%
as at 31 December 2024, compared to 57.86% as at
31 December 2023.
3.14
A higher loans-to-deposits ratio ordinarily indicates
more aggressive lending (potentially higher returns
but higher liquidity risks, and vice versa). The
average L/D ratio in Zimbabwe mainly depicts the
cautious approach to lending by banks based on risk
considerations.
3.15
The trend in the loans to deposits ratio is shown in
the figure below.
Figure 9: Banking Sector Loans to Deposits Ratio Trend
Source: Reserve Bank of Zimbabwe, 2024
3.16
It is envisaged that as ongoing macroeconomic
stabilisation efforts gain traction, banks will be able to
expand their lending activities in line with expanding
economic activity.
Banking Sector Risk Assessment
3.17
The operating environment characterised by
emerging risks such as climate and cyber risks, as
well as amplification of traditional risks against the
backdrop
of
heightened
technological
advancement and financial innovation, is creating
both opportunities and threats for the banking
sector. Banking institutions are responding by
reconfiguring
their
business
models
and
developing
digitally
enabled
products
that
increasingly leverage artificial intelligence, while at
the same time enhancing climate risk management
systems and strategies.
3.18
The banking sector faced seven (7) principal
financial stability risks in 2024, as highlighted
hereunder.
Credit Risk
3.19
Credit risk was rated moderate on account of
relatively high interest rates, albeit declining,
coupled with robust risk management systems at


Loans to deposit ratio
(%)

banking institutions. High lending rates partly
reflect the high premiums on credit lines accessed
by banking institutions. At 3.37%, the nonperforming loans to total loans (NPLs) ratio was
below the international threshold of 5%. Figure 10
shows the trend in the average sector NPL ratio.
3.20
The highest NPL concentrations were observed in the
mining sector, accounting for 27.87% of total NPLs,
followed by the manufacturing sector (17.74%) and
individuals and households (16.50%), as shown in
Figure 11 below. The relatively high NPLs in the
mining sector mainly reflect the decline in global
commodity prices of lithium and platinum during the
last quarter of 2024. This reflects the macro-financial
linkages between global and domestic developments
and the financial sector. In this regard, ongoing
geopolitical tensions and tariff wars will have a global
bearing on corporate viability via export revenues and
import costs, with potentially significant ramifications
on financial stability.
Figure 10: Nonperforming Loans Ratio (%)
Source: Reserve Bank of Zimbabwe,2024
Figure 11: Sectoral Distribution of NPLs as at 31 December 2024
Source: Reserve Bank of Zimbabwe, 2024
3.21
The prevailing tight monetary conditions in the
domestic economy have potential to exert
downward pressure on property prices as a result
of reduced demand, a development that
invariably affects collateral valuations. This may,
going forward affect loan recovery rates in cases
where properties were ceded as collateral. The
stabilisation of the exchange rate has had effects
on property revaluation gains which gradually
slowed down resulting from the stable property
prices.

Dec-21 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24
NPL Ratio
Benchmark
AGRICULTURAL,
13.03%
MANUFACTURING,
17.74%
COMMERCIAL, 6.57%
INDIVIDUAL&
HOUSHOLDS, 16.50%
MINING, 27.87%
DISTRIBUTION, 10.25%
CONSTRUCTION,
0.69%
TRANSPORT, 2.99%
COMMUNICATION,
0.00%
FINANCIAL, 0.11%
OTHER, 4.25%
SECTORAL DISTRIBUTION OF NPLs AS AT 31 DECEMBER 2024

3.22
The distribution of credit, as shown in Figure 12
below, is a manifestation of structural dynamics
in the banking sector where long-term funding
required by sectors such as mining
and
construction is constrained
by the liability
structure of banking institutions which is tilted
towards short term funding. It is also noted that
while significant lending to households would
ordinarily create underlying default risks from
consumptive
lending,
such
loans
in
the
Zimbabwean context are also used for productive
purposes in view of the informalisation of the
economy.
Figure 12: Sectoral Distribution of Loans
Source: Reserve Bank of Zimbabwe, 2024
Interest Rate Risk
3.23
Interest rate risk remained moderate during the
year ended 31 December 2024 as holdings of demand
deposits with zero or minimal interest rates continue
to dominate liability profiles of banking institutions,
on the back of a relatively high earning assets base
mainly comprising loans and advances, as well as
3.24
securities and investments. The risk is further
moderated by satisfactory risk management systems.
Liquidity Risk
3.25
Liquidity risk was considered low, on account of high
liquidity buffers across the banking sector, reflected
by an average Prudential Liquidity Ratio of 58.83%,
3.26
which was well above the 30% regulatory minimum
for individual banks. The trend in the Prudential
Liquidity Ratio is shown in Figure 13.
Individuals &
Households
25.51%
Other
2.24%
Agricultural
14.72%
Manufacturing
14.93%
Commercial
10.66%
Mining
9.46%
Dstribution
8.08%
Construction
2.35%
Transport
1.65%
Communication
0.96%
Financial
4.86%
Mortgage
4.57%
Productive,
72.25%

Figure 13:Banking Sector Average Prudential Liquidity Ratio Trend
Source: Reserve Bank of Zimbabwe, 2024
3.27
The Reserve Bank also monitors the Basel III
Liquidity Coverage Ratio (LCR), which although
declining from 317.23% as at 31 December
2023 to 267.19% as at 31 December 2024,
remained well above the minimum regulatory
requirement of 100%
3.28
It is worth noting, however, that high-quality
assets, are a critical component of LCR
computation, such that they should only include
assets that can be easily and immediately
converted into cash at little or no loss of value.
In this regard, ongoing efforts to deepen
financial
markets
in
Zimbabwe
are
of
paramount importance.
3.29
In addition, the limited nature and relatively
high cost of external lines of credit to Zimbabwe
tends to constrain the ability of banking
institutions to provide long term funding. The
disruptive effects of geopolitical tensions and
general
uncertainty
in
the
global
macroeconomic environment may aggravate
the external funding constraint, as potential
investors become more cautious.
Foreign Exchange Rate Risk
3.30
Foreign exchange rate risk was assessed as
moderate
in
view
of
the
intermittent
volatilities that were moderated by various
measures, including tight monetary policy
stance, introduction of stable local currency.
The ZiG
to USD exchange rate remained
relatively stable, moving from USD1: ZiG13.56
when it was introduced to the market in April
2024 to USD1: ZiG25.8 by year-end, following
realignment of the exchange rate in September
2024.
3.31
Some
banking
institutions
breached
the
regulatory thresholds of 10% and 20% per
currency and aggregate foreign currency net
open positions partly attributed to the structural
dynamic of the multicurrency regime, where
banks fund purchase of foreign currencies using
retained earnings generated
from foreign
denominated
transactions,
without
corresponding liabilities; funding of foreign
currency assets using local currency labilities,
as well as inadequate
risk management
systems. The Reserve Bank engaged banks
with a view to normalising the breaches guided
by best practice.
Strategic Risk
3.32
Strategic risk was rated moderate based on
structural dynamics that characterise the
banking sector operating landscape, including
heightened digitisation, which is reshaping
service
delivery
models
and
customer
engagement strategies. Competitive pressures
are intensifying, largely emanating from fintech
companies and mobile money operators
offering agile, technology driven financial
solutions that challenge traditional banking
models.
3.33
In
addition,
changing
consumer
tastes,
particularly
a
growing
preference
for
convenient, self-service digital platforms and


Dec-2019
Jun-2020
Dec-2020
Jun-2021
Dec-2021
Jun-2022
Dec-2022
Jun-2023
Dec-2023
Jun-2024
Dec-2024
%

personalised financial products are compelling
banks to rapidly innovate. These shifts are
occurring
alongside
evolving
regulatory
expectations aimed at enhancing financial
stability,
consumer
protection,
and
cybersecurity resilience.
3.34 The
aforenoted
shifts
in
the
operating
landscape, coupled with pressures for business
model
reconfigurations,
including
cost
rationalisations, have heightened business
model risk, requiring development and/or
enhancement of dynamic capabilities on the
part of banks. In this connection, the Reserve
Bank continues to enhance its supervisory
techniques
and
methodologies,
including
proactive engagements with bank boards and
management.
3.35
The Reserve Bank continues to integrate
business model analysis and sustainability
assessments into its quarterly off-site reviews
and on-site supervisory examinations. This
approach enables the Bank to evaluate the
long-term viability of regulated institutions by
examining the alignment of their strategic
direction with their risk appetite and operating
environment. Enhanced focus on income
diversification,
cost
structures,
and
responsiveness to emerging risks such as digital
disruption
and
climate
change,
has
strengthened
ability
to
identify
strategic
vulnerabilities early and ensure proactive
supervisory responses. This forms part of the
Reserve Bank’s broader efforts to enhance
forward-looking
supervision
to
safeguard
financial sector stability.

Operational Risk
3.36
Operational Risk in the banking sector was
considered
high
based
on
continued
automation and digitization, including the
growing trend in the use of cloud computing,
which heightens operational and cyber risks.
The Reserve Bank conducted a cyber resilience
assessment in 2024 for the banking and
microfinance sectors to evaluate readiness
against cyber threats.
3.37
The assessment indicated satisfactory cyber
maturity across most institutions, with wellestablished
risk
management
systems
safeguarding critical data and supporting
effective threat detection and response.
3.38
Banking institutions continue to enhance their
operational
resilience
and
cyber
risk
management capabilities.

Macroeconomic Risk
3.39 Global macroeconomic and financial conditions
highlighted in Chapter 1, including geopolitical
tensions,
commodity
prices,
inflation
developments, as well as economic growth
rates in Zimbabwe’s trading partners presented
inherent risks, some of which crystalised.
Knock-on effects of lower commodity prices
were reflected by increased NPLs in the mining
sector, whilst limited external lines continued to
constrain the banking sector’s ability to fund
long term projects.
3.40 Persistent structural rigidities in the domestic
macroeconomic landscape, including exchange
volatilities fiscal debt overhang, subdued
demand, and power outage, were some of the
factors affecting credit and liquidity risk profiles
of banks. As highlighted elsewhere in this
report, the risks were mitigated by proactive
supervisory oversight and risk management
enhancements at banking institutions resulting
in a moderate rating for macroeconomic risk.

Climate Related Risks
3.41 Climate related risks emerged as one of the
topical risks in the banking sector.
3.42 In relation to physical risk, whilst the
agricultural sector was affected by the El-nino
induced drought during the 2023/2024 farming
season,
banking
institutions
were
not
significantly affected. This was principally due
to strategies employed, including targeting
financing of farmers with climate proofed
infrastructure such as irrigation infrastructure.
3.43
In addition, banking institutions put in place
structured finance agriculture facilities where
the financed commodity was secured as
collateral for the loan facility which mitigated
against the risk of commodity side marketing.
3.44
The absence of major policy shifts towards
green energy in 2024 minimised transition risk
in the banking sector. As these policies become
more pronounced and more and more assets
become stranded and related values are
affected, transition risk may present a major
challenge in the sector.
3.45
As part of risk mitigation, the Reserve Bank
continued to operationalise Guideline No.012023/BSD - Climate Risk Management. This
included a survey to determine progress made
by
banking
institutions
in
relation
to
implementation of climate governance and risk
management systems.

Interbank Analysis
3.46 The interbank network is a tool used to assess
the extent of interconnectedness of institutions
that are participating in the interbank market
(banks and deposit-taking microfinance with
the ultimate objective of determining the level
of systemic risk. Figure 14 shows the extent of
interconnectedness in the banking system as at
31 December 2024.

Figure 14: Interbank Network as at 31 December 2024

Source: Reserve Bank of Zimbabwe, 2024

3.47
In the scale of the whole banking sector, interbank
exposures constituted a relatively small share of
assets. Total interbank loans accounted for 4.13%
of total banking sector assets. A stress test to assess
the impact on the lending banks of a failure by the
borrowing banks showed that the lending banks
would remain solvent with their capital adequacy
ratios remaining above the regulatory minimum of
12%.


Money Laundering Risks
3.48
As part of ongoing efforts to strengthen
implementation of measures to combat money
laundering and terrorism financing, the country
concluded its third money laundering National
Risk Assessment (NRA) in 2024. The NRA was
undertaken using the World Bank NRA Tool.
3.49 The NRA rated the country’s overall money
laundering risk as medium, which is a function of
the National Threat rating of Medium Low and a
National Vulnerability rating of Medium High.
3.50 The money laundering national threat rating is
influenced by the estimated amounts of proceeds
of crime being laundered through the financial
system and the economy. The major financial
crimes that generated illicit proceeds were found
to be tax evasion, corruption, fraud, drug
trafficking, smuggling and illegal dealing in
precious stones and precious metals.
3.51
Real estate, car dealers and precious stone/
precious metal dealers are the sectors that are
most susceptible to money laundering, partly due
to the widespread use of cash transactions and
partly due to weak anti money laundering
controls in these sectors.
3.52
The high informalisation of the Zimbabwe
economy and the widespread use of US dollar
cash also present challenges in effective
monitoring and combat of money laundering.
3.53 In 2024, the country also concluded its first
assessment of the money laundering risks posed
by virtual assets and virtual asset service
providers, results which were submitted to the
Minister of Finance, Economic Development and
Investment Promotion for consideration including
the necessary publication.

Microfinance Sector
3.54 Financial stability risks persist in the microfinance
sector, notably elevated credit risk, as evidenced
by a portfolio-at-risk (PaR) over 30 days of
11.47%,
significantly
higher
than
the
international benchmark of 5%.
3.55 Factors underpinning elevated inherent credit
risk include high indebtedness against the
backdrop of limited financial literacy and high
lending rates. In response, the Reserve Bank
intensified monitoring and enforcement of
regulatory compliance to mitigate the potential
systemic impact of poor lending practices.
Excessive consumer debt, if unaddressed, could
compromise the stability of both lending
institutions and the broader financial system.
3.56
Concentration risk was also notable, with the top
30 microfinance institutions accounting for
80.81% of total loans, amounting to ZiG4.16
billion out of the sector’s total ZiG5.15 billion loan
book.
3.57
Adequate capitalization is a key success factor in
Blue nodes are net lenders.
Red nodes are net borrowers.
The arrows show the direction of lending from the lender to the
borrower.
The size of the arrows shows the relative size of the net

the scaling up of microfinance business, and
attainment of both operational self-sufficiency
(OSS) and financial sustainability of microfinance
institutions.
3.58
Total equity in the microfinance industry
amounted to ZiG2.73 billion (US$105.85 million),
as at 31 December 2024. Average Tier 1 and
capital adequacy ratios of 39.71% and 44.49%,
respectively, were recorded for Deposit Taking
Microfinance Institutions. For the year ended 31
December 2024, the microfinance industry
reported an aggregate net profit of ZiG971.70
million (equivalent to US$37.66 million). Return
on assets and return on equity ratios for the
period ended 31 December 2024, were 11.28%
and 35.42%, compared to 20.02% and 32.93%,
respectively for the corresponding period in
2023.
3.59
The sustainability of the sector as measured by
the operational self-sufficiency (OSS) ratio of
182.63% as at 31 December 2024, reflects the
sector’s
ability
to
remain
operationally
sustainable.

Deposit Protection
3.60
The Deposit Protection Corporation (DPC) is a
cornerstone of financial system stability in
Zimbabwe, providing a safety net that protects
depositors in the event of a bank failure. As at 31
December
2024,
the
DPC
covered

contributory institutions, comprising commercial
banks, building societies, a savings bank, an
infrastructure and development bank, and
deposit-taking
microfinance
institutions
(DTMFIs).
3.61 Under the banking institutions category, the DPC
provided full coverage for 99.6% of ZiG deposit
accounts, although these accounted for only
14% of the total value of deposits. For USD
accounts, 96.7% of accounts were fully covered,
representing 53.2% of the value in insured
accounts.
3.62 In the microfinance sector, the coverage levels
were similarly high. The DPC fully covered
99.95% of ZiG accounts, though the insured
value was just 5.54%, reflecting the prevalence
of small-balance accounts. For USD accounts in
the same sector, 99.97% were fully covered,
with 26% of total account value insured,
indicating a concentration of funds in a limited
number of high-value accounts.
3.63 The Corporation continues to serve as a vital
stabilizing force in Zimbabwe’s financial system.
Its strong coverage ratios, proactive risk
surveillance, and resilience-building initiatives
enhance its effectiveness in managing depositor
confidence and systemic risk. Nonetheless,
challenges persist, notably in the form of
macroeconomic volatility, cyber threats, and
limited coverage for high-value deposits, which
require continued strategic focus.

4.
CAPITAL MARKETS RESILIENCE
Overview
4.1
In 2024, the capital markets was characterised
by
a
stable
yet
challenging
operating
environment
on
the
back
of
liquidity
constraints. While the Victoria Falls Stock
Exchange (VFEX) saw a 117% increase in
turnover to USD 56.9 million, the Zimbabwe
Stock Exchange (ZSE) experienced a 33%
decline in trade volumes. Funds Under
Management (FUM) totalled ZWG 90.16 billion,
with USD-denominated assets growing.
4.2
Key
risks
include
liquidity,
market
concentration,
cybersecurity
threats,
and
climate-related challenges. Regulatory efforts
focused on transparency, offshore investments,
and AML compliance. The outlook for 2025
underscores the importance of regulatory
strengthening.
Stock Exchange Developments
4.3
The VFEX registered improved trading activity
compared to FY2023. The aggregated VFEX
turnover for the year ended 31 December 2024
stood at USD56.9 million, a 117% upsurge
from USD26.3 million reported in the prior
year. Market capitalisation for the VFEX also
increased by 6% to close the year at
USD1.279 billion compared to USD1.208
billion reported for 2023.
4.4
The market capitalisation for the ZSE stood at
ZWG66.241 billion as at 31 December 2024.
However, the ZSE experienced a sharp decline
in both trade volumes as well as number of
trades with 1,3 billion shares traded in 2024,
down 33% from 1,9 billion in 2023 (see
Figure 15). The decline in trading volumes
was mainly attributable to a combination of
tight liquidity conditions, uncertainty over the
policy environment, concerns around currency
volatility,
as
well
as
changing
investor
behaviour on the back of growing preference
for alternative asset classes perceived as safer
or offering better value retention, such as real
estate, precious metals, offshore investments.
4.5
Regulatory measures, including restrictions
extended on vesting or holding periods for
stock trades, also reduced market liquidity and
discouraged speculative and short-term trading
activity, prompting many investors to shift to
alternative assets perceived as more liquid or
stable.
Figure 15: Volume of Shares Traded in millions (Zimbabwe Stock
Exchange 2019- 2024)
Source: Securities & Exchange Commission of Zimbabwe
Funds
under
Management
(Asset
Management Industry)
4.6
Total Funds Under Management (FUM) as at 31
December 2024 stood at ZWG90.16 billion.
The amount includes USD denominated FUM of
USD1.87 billion, which was translated to local
currency (ZWG) at the prevailing exchange rate
as at 31 December 2024. The industry average
FUM for the period ended 31 December 2024

stood at ZWG3.11 billion for 34 Securities &
Investment
Management
Firms
in
2024.
Figure 16 below shows the FUM trend from Q2
2023 to Q4 2024.
Figure 16: Funds under Management Q2 2023-Q4 2024

Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Funds under Management Trends (Billions)
Source: Securities & Exchange Commission of Zimbabwe
4.7
The distribution of FUM, however, as shown in
Figure 17 depicted high concentration towards
property
investments,
at
47%
of
total
investments profile of client base.
Figure 17: Distribution of Funds Under Management
Source: SECZ Newsletter, (2024)
4.8
A sharp fall in property prices has the potential
for far reaching ramifications on the holders of
the investments. The low level of money
market investments continues to reflect limited
money market investment opportunities, as
well as low investor appetite in such
investments
on the back of inflationary
pressures. The low proportion of money market
investments, as well as call and cash deposits
points to low connectedness between asset
management firms and the banking sector,
potentially minimising systemic risk.
Collective Investment Schemes (CIS)
4.9
As at 31 December 2024, there were diverse
collective investment schemes
comprising
Equity, Money Market, Hybrid, Exchange
Traded Funds, Property, Gold Funds, Real
Estate Investment Funds, and Livestock Backed
Unit Trust. Forty-eight (48) registered collective
investment schemes were active. The number
of unit holders, however, declined to 80,381
from 82,968 recorded in the previous year.
g
g
CASH AT
BANK/ CALL
DEPOSITS,
1.89%
MONEY
MARKET,
6.97%
BONDS,
6.37%
EQUITIES
(QUOTED),
32.33%
EQUITIES
(UNQUOTED)
, 4.26%
PROPERTY,
47.00%
OTHER,
1.16%
DISTRIBUTION OF FUNDS UNDER MANAGEMENT (%)

4.10
As part of ongoing efforts to monitor and
maintain financial stability, the Securities
Exchange
Commission
(SEC)
conducts
comprehensive ongoing assessment of risks
within the securities markets. This tool plays a
critical role in identifying, evaluating, and
mitigating risks that could undermine market
integrity, investor confidence, and the overall
stability of the financial system.
4.11
Key financial stability risks in the capital market
include underlying liquidity challenges which
exert pressure on investors to opt for
alternative
investments,
as
well
as
concentration risk, notably in the investment
management industry, where 75.33% of the
funds under management were held by only
five out of the twenty-seven operating
investment management firms.
4.12
High integration between capital markets
industry, banking and insurance entities
elevates systemic risks.
4.13
As with the banking sector, capital markets
were also exposed to climate related risks.
Supervisory
challenges
faced
included
reluctance to adopt ESG reporting standards by
market players, as well as limited comparable,
granular climate-related data.
4.14
Adoption of technology and digital platforms in
the capital market is also increasingly exposing
the sector to cyber risks.
4.15
Details of other risks faced including business
sustainability risk and money laundering risk,
and mitigants thereof, are provided in the
risk matrix under Annexure 1.

5.
INSURANCE AND PENSIONS INDUSTRY
DEVELOPMENTS
Overview of the Pensions Industry
5.1
The
insurance
and
pensions
industry
demonstrated overall stability in 2024, with
marginal
improvements
in
insurance
penetration
driven
by
innovation
in
microinsurance
and
agricultural
insurance
products. Pension funds registered gains from
improved investment returns, particularly from
real
estate
holdings.
The
expansion
of
microfinance
institutions
into
rural
and
underserved communities also contributed to
broader financial inclusion. However, financial
stability risks persist, notably in the form of
undercapitalisation and governance deficiencies
in certain institutions, warranting ongoing
regulatory and supervisory vigilance.
5.2
Despite
a
challenging
macroeconomic
environment marked by inflationary pressures,
the
sector
remained
resilient.
This
was
evidenced
by
generally
positive
financial
soundness indicators and compliance levels.
Nevertheless,
the
operating
environment
continues to test the robustness of institutional
risk management and capital adequacy.
5.3
A key emerging trend with financial stability
implications is the increasing dollarisation of the
insurance sector. By year-end, 80% of shortterm insurance business and 65% of life
insurance business were conducted in US
dollars. While this shift offers protection against
local currency depreciation, it also introduces
currency mismatches and potential regulatory
arbitrage, which could affect balance sheet
integrity and long-term claims-paying capacity.


Vulnerabilities in the industry
5.4
As at 31 December 2024, two (2) reinsurers,
three (3) direct insurers, one (1) life assurer, ten
(10) insurance brokers and one (1) microinsurer were non-compliant with the US$
indexed Minimum Capital Requirements (MCRs).
5.5
During the year, twenty-one (21) of the thirtyeight (38) Defined Benefit Funds (DB) funds
were underfunded. Several direct short-term
insurers were struggling to maintain adequate
liquidity levels, resulting in some paying claims
in instalments. A total of 10 out of the 19 shortterm insurers and two (2) out of 10 reinsurers
had negative working capital and current ratios
below 100%, indicating potential difficulties in
meeting their immediate financial obligations.
5.6
Following the gazetting of the pre-2009
Pensions Compensation Regulations in 2023,
and
the
setting
of
timelines
for
the
compensation
exercise,
the
Commission
received about 1,200 compensation schemes.
However, only two (2) schemes had been
approved by the Commission as at 31 December
2024, with the two (2) schemes having
commenced payments to members. The rest of
the schemes face compliance challenges due to
inadequate data, failure to demonstrate asset
separation
between
policyholder
and
shareholders,
and
funding
constraints.
Engagements are ongoing to resolve the
challenges.
5.7
The gazetting of the Insurance Compensation
Regulations was temporarily put on hold to
allow for the resolution of outstanding matters
related
to
the
Pension
Compensation
Regulations. This approach was taken to ensure
policy coherence and alignment between the
two (2) regulatory frameworks, given their
interconnected
nature
in
safeguarding

policyholder and pensioner interests. Finalising
the Pension Compensation Regulations will
provide
clarity
on
the
scope,
funding
mechanisms, and governance structures—key
elements
necessary
for
the
effective
operationalisation
of
the
Insurance
Compensation Scheme.

Risks to the Insurance and Pensions
Industry
5.8
Major risks affecting the insurance and pensions
industry in 2024 included macroeconomic,
reputational, concentration and business risks,
which were rated high, while credit and
solvency/capital risks were rated moderate.
5.9
Macroeconomic risk was rated high on account
of
inflationary
pressures,
unintended
consequences of currency reform on long-term
insurance and pension contracts, low disposable
incomes impacting on pension and insurance
uptake
and
industry
viability
challenges.
Informalisation of the economy, closure and
downsizing of companies negatively impacted
on pension coverage, insurance penetration,
rental yield and overall valuation of commercial
properties occupied by retail clients. In the
outlook, the risk is expected to remain high in
view of continuing company closures and
downsizing instances, particularly in the retail
sector.
5.10 Reputational Risk was mainly due to protracted
resolution of the Pre 2009 compensation and
low pension benefits that do not meet
reasonable expectations.
5.11 Business
Risk
was
mainly
due
to
the
uncertainties relating to the proposed transition
of Third-Party Motor Insurance administration
to a government-led framework, stemming from
several strategic and policy considerations.
5.12 Concentration Risk was rated high in view of the
high concentration on funeral products by life
assurers, the monopolistic nature of life
assurance
business
sector
as
well
as
concentration of investments in a few asset
classes, mainly property and listed equities.
5.13 Credit Risk was rated moderate due to
contribution arrears which had grown to US$68
million as at 31 December 2024, up from
US$53.81 million reported as at 31 December
2023. Given the critical role insurance and
pension
institutions
play
in
financial
intermediation, long-term savings mobilisation,
and social protection, maintaining soundness in
this sector is essential for broader financial
stability.
5.14 The Financial Stability Risk Matrix (Annexure 1)
captures both macroeconomic and institutionspecific vulnerabilities—including underwriting
risk,
investment
risk,
liquidity
risk,
and
governance weaknesses—while also reflecting
emerging structural trends such as dollarisation,
regulatory
reforms,
and
climate-related
exposures.

6.
PAYMENTS SYSTEM RESILIENCE
Overview Of Payment Systems
6.1
The national payment systems in Zimbabwe
demonstrated
stability,
efficiency,
and
resilience throughout 2024, with projections
indicating that this positive trend will continue
into 2025 and beyond.
6.2
The configuration of the payment system
comprising 12 payment system providers, 25
participant banks, three (3) regional payment
platforms and various payment streams
facilitates
the
economy's
transactional
activities. Figure 18 shows the number of
participant Financial Markets Infrastructure
(FMI) as at 31 December 2024.
Figure 18: FMIs and Number of Participant Banking Institutions
Source: Securities & Exchange Commission of Zimbabwe
Digital Payment Systems Values and
Volumes
6.3
There was significant stability in various
transactional platforms and growth in
transactional
activities
reflecting
high
adoption and confidence in the digital
payment platforms by the transacting
public.
6.4
Accordingly,
digital
payment
systems
transaction values continued an upward
trend, as shown in Figure 20, with an
average monthly growth of 26% in 2024.
The volume of transactions remained stable
with an average monthly increase of 1%
during 2024.
g
p
g

NO. OF PARTICIPANT BANKS
FMIS

Figure 19: Digital Payment Systems Values and Volumes for 2024
Source: Securities & Exchange Commission of Zimbabwe
Real Time Gross Settlement (RTGS)
6.5
The
Zimbabwe
Electronic
Transfer
and
Settlement
System
(ZETSS)
which
is
Zimbabwe’s Real Time Gross Settlement
System (RTGS) continued to be a preferred
platform for high value transactions in the
country.
Figure 20: RTGS Monthly Values and
Volumes 2024
6.6
The RTGS system’s average uptime of 99%
during the period under review, continued to
increase the market's confidence level.
6.7
RTGS
transaction
values
increased
to
ZW$123.59 billion in December 2024 from
ZW$11.32 billion in January 2024, whilst the
RTGS transaction volumes remained stable
during the year under review as shown in
Figure 20.
Source: Reserve Bank of Zimbabwe, 2024


Volumes in millions
Values in Billions
TRANSACTION VALUES IN BILLIONS (ZiG)
TRANSACTION VOLUMES IN MILLIONS

Volumes (millions)
Values (Billions)
Values
Volumes

6.8
Going forward, the Reserve Bank is
prioritising
continual
upgrading
of
payment
infrastructure,
including
compliance
with
global
messaging
standards such as ISO 20022; enhanced
cybersecurity frameworks across all
participating
institutions;
capacity
building and system testing to ensure
stability amid scaling; as well as broader
stakeholder
engagement
to
ensure
inclusive access across urban and rural
users.

Risk-Based Cyber Security Guideline
6.9
Considering elevated cybersecurity threats
and
vulnerabilities
arising
from
the
heightened dependency on digital financial
services
platforms,
the
Reserve
Bank
continued to enforce provisions in the RiskBased Cyber Security Guideline (2020)
[RBCS] to mitigate cyber threats within the
payment,
clearing,
and
settlement
landscape.
6.10
The risk-based cyber security guideline
provides minimum measures to guide the
effective
implementation
of
robust
technological infrastructures and undertake
periodic system vulnerability and penetration
testing. These measures, among others,
have continued to promote stability and
confidence in the payment ecosystem.

SWIFT Customer Security Programme
6.11
SWIFT
customers
are
mandated
to
implement the mandatory requirements of
the customer security programme and noncompliance with these controls may result in
penalties or potential loss of access to the
SWIFT network. The mandatory areas
include securing the SWIFT environment,
appropriate
user
access
rights,
and
payments.
6.12
The SWIFT mandatory areas play a crucial
role in enhancing financial stability by
mitigating the risks associated with cyber
threats and fraudulent activities. In this
regard, the Reserve Bank continued to
ensure that the system participants adhered
to set standards. The local SWIFT user group
also played a significant role in ensuring that
the market keeps track of developments on
the SWIFT platform.

Euro MasterCard and Visa
6.13
The Reserve Bank has directed financial
institutions to adopt Euro MasterCard and
Visa (EMV) standards for cards transactions
to enhance cybersecurity risk management.
In 2024, the market achieved 100%
compliance on Point of sale and Automated
teller machines, and 98% on cards.

Anti- Money Laundering & Combating
Financial
Terrorism
(AML/CFT)
Supervision in the National Payment
Systems
6.14
The supervision of payment systems and
services providers remained critical elements
of the Reserve Bank's mandate to maintain
and promote financial stability.
6.15
The Bank is also the designated anti-money
laundering and counter-terrorism financing
(AML/CFT) supervisory authority for payment
services providers under its purview to
ensure
regulated
entities
implement
statutory measures and requisite standards.
The measures include a risk-based approach,
customer
due
diligence
(KYC),
record

keeping,
and
reporting
of
suspicious
transactions, among other requirements to
ensure payment systems stability and safety.
6.16
In line with the above, the Reserve Bank
conducted risk-based oversight and AML/CFT
examinations on some payment system
providers to ascertain their compliance with
the respective laws and regulations. The
examinations revealed some deficiencies in
some areas of corporate governance and
know
your
customer
due
diligence
requirements.
6.17
The affected payment system providers were
required
to
rectify
the
deficiencies
highlighted to ensure operational stability
and
adherence
to
the
regulatory
requirements with clear implementation
timelines.

Consumer Protection Issues in Digital
Financial Services (DFS)
6.18
In recognition that consumer protection is an
important pillar for promoting financial
stability, during the period under review, the
Reserve Bank continued to ensure that
payment
system
providers
engage
in
fairness, transparency and adopt reasonable
pricing structures with a view to protect
consumers from exploitation.
6.19
The Reserve Bank also jointly conducted a
series
of
roadshows
and
community
engagement
with
Postal
and
Telecommunications Regulatory Authority as
part of a wider program on digital financial
services
education
and
awareness
for
consumers. The Reserve Bank also continued
to enforce market compliance with regulatory
requirements.
6.20
The Reserve Bank continued to explore ways
to modernize the payment landscape,
improve transaction efficiency, and reduce
reliance
on
cash
and
ensured
that
marginalised areas in remote parts of the
country have access to modern payment
system platforms.

7.
CLIMATE CHANGE RISKS
Growing Exposure to Climate change risks
7.1
Zimbabwe’s economy remains heavily reliant
on agriculture, making it particularly vulnerable
to the adverse effects of climate change. In
2024, the country experienced more frequent
and severe climate-related events, including
prolonged droughts and episodic flooding.
These phenomena led to reduced agricultural
productivity, strained food security, and
contributed to critically low dam levels, which
in
turn
constrained
hydroelectric
power
generation and dampened industrial output.

Transmission Channels to the Financial
Sector
7.2
These climate-related shocks have direct and
indirect consequences for the financial system.
Physical risk is propagated to the financial
sector
through
various
macro-financial
transmission channels, notably via businesses,
households and the macroeconomy. Shocks to
businesses include property damage and
disruption from severe weather, stranded
assets, as well as changing demand and costs.
7.3
Households are affected through loss of income
from weather disruption and health impacts, as
well as property damage from severe weather.
Aggregate impacts on the macroeconomy
include shifts in prices from structural changes
and supply shocks, productivity changes, and
other impacts on international trade, fiscal
revenues, interest rates exchange rates.
7.4
The climate related shock translates to various
financial and operational risks in the financial
sector, including credit, market, liquidity and
operational risks.
7.5
Commercial
banks
and
microfinance
institutions continue to extend credit to sectors
exposed to climate risk, including primary
agriculture and ago-processing industries that
depend on stable weather conditions and water
availability. Additionally, value chains linked to
agriculture also face cash flow disruptions due
to climate-related volatility, thereby increasing
credit risk and weakening asset quality.
7.6
Cognisant of the devastating consequences of
climate related risks, regulatory agencies are
undertaking various initiatives at sector levels
to mitigate impacts thereof.

Climate Risk Management in the Banking
Sector
7.7
Banking Institutions have a special position in
the economy and the financial sector is
witnessing a paradigm shift to embedding
sustainability and climate change into banking
institutions operations to ensure the financial
sector plays a key and catalytic role in driving
the transition to a sustainable economy.
7.8
The Reserve Bank’s role in Climate Finance will
continue to be critical in mainstreaming climate
risk into macroprudential and monetary policy
frameworks.
7.9
The Reserve Bank continued to play a vital role
in promoting sustainable banking practices and
climate risk management as it continues to put
measures to implement guidance provided to
banking institutions after issuance of a Climate
Risk Guideline, which seeks to strengthen the
resilience of the banking system to climaterelated risks and support the national strategy
on transitioning to a low carbon economy.
7.10 The Reserve Bank has been monitoring the
banking sector’s resilience through promoting
the development and implementation of sound
climate
risk
management
practices
and
methodologies which include climate risk

reporting. Going forward, the Reserve Bank
shall be encouraging banks and institutional
investors to disclose climate-related and
sustainability
reporting
and
disclosure
requirements
in
line
with
international
standards such as the Task Force on Climaterelated Financial Disclosures (TCFD), IFRS S1
(sustainability) and IFRS 2 (Climate).
7.11 The Reserve Bank shall be exploring the
issuance
of
climate-related
financial
instruments, such as green bonds, to mobilize
capital for sustainable infrastructure and clean
energy projects.

Coordination Through National Disaster
Risk Financing Initiatives
7.12 In the National Disaster Risk Finance Initiatives
(World Bank, March 2025.), SECZ was
recommended to lead the capital markets
development strategy to grow and deepen the
market by facilitating disaster risk and climate
finance, working closely with IPEC and the
Reserve Bank of Zimbabwe as a multi-agency
initiative
aimed
at
developing
financial
instruments to enhance preparedness and
response capacity for climate-related disasters.
This
includes
contingent
financing
mechanisms, risk pooling, and insurance
solutions designed to limit fiscal and financial
system vulnerabilities in the face of increasingly
frequent climate shocks.
7.13 This initiative was in response to a request from
the Government of Zimbabwe (GoZ) for a study
to assess the institutional, legal, and financial
planning for financing of disaster risk in
Zimbabwe, resulting in the preparation of the
Zimbabwe Disaster Risk Finance Diagnostic2 by
the World Bank Finance, Competitiveness and
Innovation Global Practice.
7.14 The GoZ intends to use the diagnostic to inform
the development of a comprehensive national
DRF strategy. The diagnostic will also inform
the
Zimbabwe
Country
Climate
and
Development Report, which is a joint analytical
product of the World Bank and the GoZ and will
complement the ongoing Zimbabwe Country
Private Sector Diagnostic.
7.15 It was further noted that the development of
the capital markets in Zimbabwe is essential for
the growth and resilience of the insurance
sector. The government is expected to work
with the industry to create a strategy that
address macro-fiscal constraints and facilitated
development of risk and climate finance
products for MSMEs and investment options for
insurance companies to improve their financial
resilience. Further, insurance regulations could
allow insurance entities to issue contingent
capital such as Catastrophe bonds (cat bonds),
which could be sold to the international market
through the VFEX.


011741/pdf/P176613-8de9e4aa-f97d-4d3d-a7e26dfe7fc9459b.pdf

8.
FINANCIAL STABILITY ENHANCEMENTS

Cross
Sectoral
Financial
Stability
Enhancements
8.1
The buildup of debt amid elevated uncertainty
underscores
the
need
to
strengthen
macroprudential policy frameworks for both
bank and non-bank financial sectors. In 2024,
the Zimbabwean financial sector safety net
players,
under
the
auspices
of
the
Multidisciplinary Financial Stability Committee,
significantly progressed the development of
the Macroprudential Policy Framework. The
Framework
provides
for
institutional
arrangements,
systemic
risk
assessment,
macroprudential
tool
kit
as
well
as
communications strategy.
8.2
The
Committee
also
progressed
the
development of the Contingency Planning &
Systemic Crisis Management Framework which
provides for financial sector regulators’ policy
responses in preventing and resolving systemic
crises. Key pillars of the framework include
institutional
arrangements
for
crisis
management,
resolution
planning
and
resolution funding.
8.3
As part of the initiatives to enhance resolution
of financial institutions and crisis management,
the Reserve Bank of Zimbabwe, in conjunction
with the Deposit Protection Corporation and
the
Ministry
of
Finance,
Economic
Development
and
Investment
Promotion,
worked on proposals to amend the Banking Act
in order to strengthen the Bank Resolution
Framework, with particular focus on Resolution
Powers, Resolution Planning and Resolvability
Assessments, and Resolution Funding. The
Proposals have since been escalated for
consideration and facilitation of legislative
processes.

Banking Sector
8.4
The Reserve Bank continued to enhance its
supervisory
tools
and
methodologies
in
response to developments in the banking
sector as well as best practice. In this regard,
the Reserve Bank issued enhanced risk
management prudential standards for the
banking sector. Enhancements considered
emerging risks as well as amplified financial
and operational risks, taking cognisance of
several developments that have taken place
over
the
years,
including
technological
advancement
and
financial
innovation,
pandemics, and climate change.
8.5
With technical support from the International
Monetary Fund (IMF), the Reserve Bank
commenced work on the implementation of the
Basel III Capital standards in the Zimbabwean
banking sector. The Standards enhance the
quality and quantity of capital, as well as
capital allocation methodologies for credit,
market and operational risks.
8.6
The Reserve Bank continued to promote the
adoption of sustainable banking practices as
part of efforts to build resilience and climate
proofing in the financial sector. Against this
background, the Reserve Bank continued to
work closely with financial institutions in the
implementation of the sustainability standards
under
the
Sustainability
Standards
&
Certification Initiative (SSCI) being driven by
the European Organization for Sustainable
Development (EOSD).

Foreign Exchange Market Enhancements
8.7
Refinement of the Willing-Buyer, Willing-Seller
foreign exchange management system is
expected to enhance flexibility and deepen the
foreign exchange market, while enhancing its
efficiency and the price discovery mechanism.
8.8
The country’s foreign currency inflows are
expected to improve reflecting anticipated
stronger export performance and continued
robust personal transfers inflows (remittances)
to offset any decline in international aid
through
Non-Governmental
Organizations
(NGOs) arising from funding freeze by the USA.

Payment Systems Enhancements
8.9
In 2024, the Reserve Bank of Zimbabwe (RBZ)
continued
to
strengthen
the
regulatory
environment governing payment systems,
reinforcing its commitment to maintaining the
safety, efficiency, and reliability of the
country’s financial market infrastructure. This
was
achieved
through
the
continued
application of the RBZ Act, the National
Payment Systems (NPS) Act, Guidelines for
Retail Payment Systems, and the Cybersecurity
Framework. These instruments collectively
underpin the supervision, recognition, and
oversight of payment systems and related
innovations.
8.10
A
key
milestone
in

was
the
comprehensive review of the NPS Act, which
culminated in the preparation of a draft
amendment bill currently under consideration
by
the
Ministry
of
Finance,
Economic
Development and Investment Promotion. This
review seeks to modernize the legal and
regulatory framework in line with global
standards, address emerging risks, particularly
those associated with digital transactions; and
accommodate
evolving
technologies
and
platforms, including fintech-driven models and
real-time retail payments.
8.11
The Bank is expected to finalize and gazette
the amended NPS Act in 2025, strengthen legal
provisions to support cross-border payments,
digital currencies, and interoperability across
platforms;
expand
supervisory
tools
for
cybersecurity
risk
management
and
operational resilience within licensed payment
service providers; and support innovation by
updating recognition criteria for payment
systems initiatives, ensuring both safety and
inclusiveness.
8.12
Adoption of SWIFT ISO 20022- Migration
from MT Messages -the adoption of the ISO
20022 messaging standard has enhanced data
transmission
security,
improved
interoperability,
and
facilitated
global
compliance.
8.13
SWIFT
cross
border
payments
and
reporting plus (CBPR+) - the banking
industry in Zimbabwe continued to work
towards full compliance with SWIFT crossborder payment processes for the ISO 20022
program
after
successfully
implementing
incoming and outgoing cross border payments
and reporting plus (CBPR+).
8.14
Local RTGS - the RTGS system for Zimbabwe
was upgraded to version 7 in November 2024
to ensure that the system complies with ISO
20022 standards, thereby enhancing the
efficiency, security, and effectiveness of the
RTGS system, ultimately benefiting both
financial institutions and their customers. The
Bank continued with efforts to ensure that all
market participants work towards enabling ISO
20022 compliant messages on RTGS.

8.15
SADC RTGS - there are 14 local banks on
SADC RTGS and the system went live on ISO
20022 in August 2024 to ensure efficiency and
stability for cross border transactions. Local
banks continued to integrate with the Pan
African Payment and Settlement System
(PASS), COMESA’s REPSS and SADC RTGS
System under the oversight of the Reserve
Bank to ensure more cross border transaction
options for the transacting public.
Promoting Digital Financial Services
8.16
Policies aimed at enhancing digital financial
services have been prioritized, particularly
through mobile financial services, card and ecommerce transactions.
8.17
The Bank continued to approve new products
and enhancements to existing products to
broaden payment systems availability in the
country.
8.18
Digital transactions are more secure than
transacting through physical cash and other
physical payment streams therefore enhancing
confidence in the available payment streams
for a stable payment environment.
Interoperability of National Payment
Systems
8.19
In 2024, the Reserve Bank of Zimbabwe (RBZ),
in collaboration with the Ministry of Finance
and Economic Development came up with
measures to advance the integration of various
payment platforms through the Zimbabwe
National Switch (Zimswitch). This initiative
aimed to enhance interoperability, streamline
retail payment transactions, and promote a
more efficient, secure, and inclusive national
payments ecosystem.
8.20
The
initiative
significantly
improved
the
efficiency and resilience of domestic payment
systems, as it enabled real-time connectivity
among banks, mobile money operators, and
other
financial
service
providers.
The
interoperability of retail payment streams
notably improved transactional convenience
for
consumers
and
reduced
systemic
fragmentation, with the value of consolidated
retail payments increasing steadily over the
course of 2024 as shown in Figure 21.
Figure 21: Interoperability Volumes and
Values from January to December 2024
Source: Reserve Bank of Zimbabwe, 2024
8.21
From a financial stability perspective, the
integration
has
reduced
liquidity
and
settlement risks associated with isolated
platforms; strengthened transparency and
traceability of transactions, thereby enhancing
anti-money laundering (AML) oversight, as well
as supporting a more unified monetary


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30-Nov-24
31-Dec-24
Volumes in Thousands
Values in Millions
Values LHS
Volumes RHS
Linear (Volumes RHS)

transmission mechanism by linking payment
flows across sectors.
8.22
Vulnerabilities, however, remain, including
include elevated cybersecurity risks associated
with digital integration, which expose the
system to potential disruptions from data
breaches or cyberattacks, legacy infrastructure
among some smaller players, which poses
interoperability and resilience risks; while the
rapid pace of technological change continues
to outpace regulatory frameworks, requiring
dynamic oversight.

Collaboration and Cooperation
8.23
During the year under review, the Bank worked
closely with relevant stakeholders including the
Financial
Intelligence
Unit,
Post
and
Telecommunication
Regulatory
Authority
(POTRAZ), Consumer Council of Zimbabwe
(CCZ),
and
Competition
and
Tariffs
Commission in implementing various initiatives
including training, and awareness programs.
8.24
The Bank also collaborated with other relevant
central banks and other authorities within the
collaborative platforms of SADC, African Union,
and COMESA Payment Systems Oversight
Committees. The Bank also continued to
leverage on standards and best practice from
standard setting bodies including Financial
Stability Board (FSB), BIS Committee on
Payments and Market Infrastructures (CPMI),
and International Organization of Securities
Commissions (IOSCO), to enhance alignment
of Zimbabwe's payment systems with global
best practices and standards.


Capital Markets
8.25
In facilitating an enabling environment for
orderly capital markets, SECZ continues to
engage in ongoing review and enhancement of
the regulatory and supervisory environment. In
2024, the following guidelines and directives
were issued:
i.
Directive
to
securities
market
intermediaries
on
enhanced
audited
financial statements disclosures

content/uploads/Posts/Directive-onAudited-Financial-StatementsDisclosures-August-2024.pdf
8.26
The directive is aimed at ensuring full
disclosure of Securities Market Intermediaries’
(SMI) operations including capital adequacy
and funds under management/trust/custody.
The directive also compels SMIs to disclose
regulatory penalties and corrective actions as
well as voluntary Environmental, Social and
Governance (ESG) disclosures.
i.
Directive to securities investment
managers on offshore investments

securities-investment-managers-assetmanagers-on-offshore-investments/
8.27
The directive compels asset managers to meet
certain conditions to be able to invest offshore
on behalf of clients.

Securities Resolution Framework and
Capital Adequacy Framework
8.28
The
Commission
is
developing
a
comprehensive
Resolution
Framework
to
establish clear procedures for managing
distressed financial institutions. The framework
will outline intervention thresholds, resolution
tools, and orderly wind-down processes to
safeguard
market
stability
and
protect
investors.
Implementation
will
enhance
regulatory predictability and strengthen the

financial system's resilience to institutional
failures.
8.29
SECZ is in the process of making amendments
to the Capital Adequacy Framework set to be
concluded in 2025, which will refine capital
requirements for market participants to better
reflect emerging risks. These revisions will
introduce
more
nuanced
risk-weighting
methodologies,
adjust
minimum
capital
thresholds, and enhance reporting standards.
The updated framework aims to strengthen
institutional buffers while maintaining flexibility
for market growth and innovation.
8.30
SECZ and Insurance & Pensions Commission in
liaison with the Association of Investment
Managers of Zimbabwe (AIMZ) are developing
a framework for Valuations of private equity,
real estate, and investment property.

9.
OUTLOOK

9.1
Global financial risks in the outlook period will
be partly determined by the outcome of
ongoing efforts to resolve geopolitical conflicts
and tensions in different regions, and the
intensification of protectionist policies that
could weigh down on medium-term growth, as
well as underlying inflation. Trade wars are
also likely to negatively affect smooth flow of
exports and imports, as well as commodity
prices, with far reaching ramifications on
global, regional and domestic growth rates
9.2
Depressed international mineral commodity
prices may impact foreign currency inflows
with potential impact on the performance of
some of the banks with foreign currency
exposures.
9.3
Ongoing efforts to facilitate climate finance for
adaptation, especially for vulnerable countries
exposed to significant climate risks, remain a
top priority in containing the devastating
effects of climate change. Of paramount
importance is the need for regulatory agencies
and financial institutions to enhance climate
risk management systems, including reporting
arrangements and data availability.


9.4
Regulatory agencies in Zimbabwe are also
expected to focus on the development of a
green finance taxonomy.
9.5
Operational resilience will continue to prioritise
in the financial sector in the outlook period.
Strengthening of cyber risk management
systems at financial institutions will remain a
top priority in view of expected heightening of
financial innovation and digitisation in the
financial system.
9.6
The ongoing geo-political conflicts and tariff
wars and falling mineral prices are likely to
impact negatively on commodity prices which
may adversely affect the country’s export
performance in 2025.
9.7 Globally, investors and businesses are worried
about the tariffs as well as the overall
uncertainty in US government policy. Global
economic growth is therefore anticipated to be
slower in 2025, characterised by higher prices
(World Economic Forum, April 2025).

ANNEXES
Annexure 1: MAJOR RISKS TO FINANCIAL STABILITY AND RISK MITIGANTS
Type of Risk
Inherent Risk
Likely Impact
Risk Mitigants, Strategies &
Initiatives
Residual Risk
Trend of
Risk
Operational Risk
•
The risk of direct or indirect
loss
resulting
from
inadequate or failed internal
processes,
people,
and
systems or from external
events.
HIGH
• Operational
Risk
was
considered high on back of
heightened
automation
and digitization, including
cloud computing, which
increases
exposure
to
operational
and
cyber
risks.
• Accelerated Digitisation of
financial
services
has
increased
exposure
to
cyber-crimes.
• Low
preparedness
for
implications of disruptive
technologies like Artificial
Intelligence.
• Power outages.
• Inadequate
regulatory
oversight on new fintech
products such as crypto
and virtual assets.
• Interconnectedness
as
failures in one payment
system
can
cause
cascading failures across
systems.
• Rapid
technological
changes
can
render
• Heightened
operational
inefficiencies and disruption of
critical services, as well as
failure to achieve desired goals
and objectives.
• Cybersecurity breaches can
lead to direct financial losses
due to theft, fraud, or ransom
payments. Banks may also
incur substantial costs related
to system repairs, legal fees,
and compensation for affected
customers. Cyber incidents
may be systemic.
• Prolonged
downtime
can
impact the entire financial
system.
• Settlement failures
• Network intrusions
• Implementation of effective
risk management frameworks
• Banks
have
adopted
alternative energy sources to
reduce
downtime
and
improve service.
• The Reserve Bank is carrying
out periodic cyber risk on-site
examinations to ensure that
banks have put in place
adequate
cyber
risk
management controls.
• Constant upgrading of critical
cyber security systems
• Implementation
of
Data
Protection Act to protect personal
data.
• Public
awareness
and
financial literacy campaigns.


Moderate

Type of Risk
Inherent Risk
Likely Impact
Risk Mitigants, Strategies &
Initiatives
Residual Risk
Trend of
Risk
existing systems obsolete
or vulnerable.
Macroeconomic Risk

• Risk emanates from global,
regional, and local economic
developments.
MODERATE
• Global economic and financial
conditions
remain
volatile,
influenced
by
escalating
geopolitical conflicts and the
withdrawal
of
foreign
aid
support by the United States.
• Heightened
global
trade
tensions, following the U.S.
announcement
of
increased
tariffs in February 2025
• High debt levels.
• External financing constraints.
• Inflationary
pressures
and
exchange rate volatility.

• Global and domestic economic
slowdown
• Increased unemployment.

• Maintenance of sound monetary
& fiscal policies by the relevant
Authorities.
• Constant reviews of business
models
to
align
with
macroeconomic environment.

Moderate

Climate Change and
Environmental Risk

• Physical and transition risks
arising
from
climate
and
environmental
changes
with
direct
and
indirect
consequences
on
macroeconomic conditions and
financial stability.
MODERATE
• Potential
threats
and
vulnerabilities from climate
change and its associated
impacts can affect various
sectors, including finance,
agriculture,
infrastructure,
and public health.
• Increasing climate related
risks e.g. cyclones, droughts,
floods.
• Limited
comparable,
granular climate-related data
• Physical risks can lead to the
damage of real estate or
infrastructure
in
vulnerable
areas. Borrowers exposed to
high levels of climate risk may
face difficulties in repaying
loans, leading to increased
credit
risk
for

lending
institutions.
• Changing
consumer
preferences
and
investor
sentiment
towards
more
sustainable
products
and
practices
can

precipitate
stranded assets.
• Operationalisation
of
the
Climate Risk Management
Guideline has ensured that
banks
have
adequate
governance
and
risk
management systems.
• Conduct of regular climate
risk assessments.
• Data collection and stress
testing to assess and monitor
climate risk.
• Most regulated entities are
embedding
climate
and
environmental related risks in
their corporate strategy and
decision making processes.
Moderate

Type of Risk
Inherent Risk
Likely Impact
Risk Mitigants, Strategies &
Initiatives
Residual Risk
Trend of
Risk
limit
supervisory
and
regulatory analysis.

• Stranded
assets
heighten
market
risk
for
financial
institutions and operational
viability on account of affected
corporate entities.
• Agricultural sector is exposed,
given
the
sector’s
dependence on rainfall and
temperature patterns

Annexure 2: Macroeconomic Indicators for Zimbabwe

REAL SECTOR


Real GDP at 2019
Market prices
(ZiG$'m)

GDP at Market Prices
% changes

GDP per capita
(ZiG$'m)

PRICES


Month-on-Month (end
period) %

Annual Inflation (end
period) %

Annual Inflation
(period average) %

EXTERNAL SECTOR


Trade Balance (US$M)

Current a/c balance
(US$M)

Capital a/c balance
(US$M)

MONETARY SECTOR


Broad Money M3
(ZWL$ '000)

Domestic Credit
(ZWL$ '000)

Credit to Private
Sector (ZWL$ '000)

Credit to Public
Parastatals (ZWL$
'000)
5.6

33.5

1,915.8
17,318,818.4
Credit to Government
( net )(ZWL$ '000)

Nominal Minimum
Lending Rate (%)


Nominal Maximum
Lending Rate (%)


PUBLIC FINANCES


Government Accounts
(ZWL$ m)


Revenue including
retained revenue

Expenditures & Net
Lending (Million ZiG)


Capital Expenditure

Overall Balance

POPULATION
(millions)

Source: Reserve Bank of Zimbabwe, 2024

Annexure 3: Financial Sector Indicators

2020 (ZW$)
2021 (ZW$)
2022 (ZW$)
2023 (ZW$)
2024(ZiG)
Banking Sector


Capital Adequacy Ratio


38.46%
Nonperforming Loans
Ratio


3.34%
Large Exposures to
Capital


20.40%
Return on Equity


6.85%
Return on Assets


2.42%
Prudential Liquidity
Ratio


58.87%
Capital Market


Market Capitalisation
317,879,307,046.78
1,317,205,109,565.00
2,044,869,144,082.00 16,812,914,355,263.10 66,241,200,130
All Share Index

Source: Reserve Bank of Zimbabwe, 2024