Online Reporter
Nelson Gahadza
ZIMBABWEAN businesses are entering the second half of 2026 cautiously optimistic, encouraged by improving macroeconomic stability, easing inflationary pressures and a stable exchange rate.
They are, however, increasingly worried about rising external risks, supply chain disruptions and weakening global demand.
For the first time in several years, many companies say the domestic economy is operating on a firmer foundation, supported by improved agricultural output, tighter fiscal discipline and a more predictable currency environment.
Inflation has largely remained within single digits, foreign currency reserves have strengthened and policy consistency has helped restore a measure of confidence across the productive sectors.
According to the Zimbabwe National Statistics Agency (ZimStat), annual inflation remained within single digits for much of the first quarter of 2026, a marked improvement from the triple-digit inflationary episodes experienced in previous years.
Month-on-month inflation averaged below 3 percent during the opening months of the year, reflecting tighter monetary policy and improved exchange rate management. Yet beneath this improving outlook lies growing anxiety over escalating geopolitical tensions, particularly the conflict in the Middle East, rising global commodity prices, elevated fuel and freight costs and the possibility of prolonged supply-side disruptions that could reverse some of the gains made in stabilising the economy.
Business leaders and economists warn that while domestic fundamentals have improved significantly, Zimbabwe remains highly exposed to external shocks because of its dependence on imported fuel, raw materials and global supply chains.
In its trading update for the quarter ended March 31, 2026, CBZ Holdings said the operating environment was expected to remain dynamic due to global geopolitical developments and commodity price volatility.
Group chief governance officer Ms Rumbidzayi Angeline Jakanani said elevated energy prices were likely to sustain pressure on operating costs, while ongoing policy interventions could reshape revenue dynamics within the financial services sector.
“Notwithstanding these headwinds, the domestic economy is projected to remain relatively stable, supported by improved agricultural output, exchange rate stability and continued policy support aimed at enhancing financial sector participation and economic productivity,” she said.
Ms Jakanani said the group remained well-positioned to sustain performance through strong capitalisation, a diversified business portfolio and disciplined risk management systems.
The comments reflect a growing sentiment within the corporate sector that Zimbabwe’s macroeconomic environment is more stable than it has been in previous years, although vulnerabilities remain pronounced.
Economist Mr Walter Mapfumo said the economic cycle differs from previous stabilisation periods because the authorities have largely managed to maintain currency stability and contain inflation despite mounting external shocks.
“Zimbabwe has achieved a degree of macroeconomic stability that businesses have been demanding for years,” he said. “The exchange rate has remained relatively stable, inflation has moderated significantly compared to previous periods, and fiscal discipline has improved.
“These are critical foundations for business planning and investment confidence.”
Mr Mapfumo warned that the country’s biggest challenge now lies outside its borders.
“The economy is now more vulnerable to imported shocks than domestic instability,” he said.
“The Middle East conflict, global trade tensions and commodity price volatility are creating serious uncertainty for businesses that rely on imported inputs, fuel and international supply chains.
“The risk is that these external pressures could undermine local gains.”
Manufacturing and retail giant Innscor Africa echoed similar concerns in its trading update for the third quarter ended March 31, 2026.
The group said although the domestic operating environment had become more conducive to trading, geopolitical developments, particularly the conflict in the Middle East, had introduced significant uncertainty into international commodity markets.
According to the company, the resulting volatility in fuel, raw material and freight costs had forced businesses to focus on securing adequate physical stocks of key raw materials while attempting to minimise inflationary pressures at both the producer and consumer levels.
Despite these challenges, Innscor said its core manufacturing operations continued to record encouraging volume growth during the quarter under review.
The Mill-Bake segment maintained positive growth, supported by expanded manufacturing capacity, improved efficiencies and enhanced distribution networks.
The Protein segment performed above expectations as recovery momentum strengthened.
The group’s Beverage and Light Manufacturing segment registered moderate aggregate volume growth, with positive momentum across beverage, dairy, packaging and light manufacturing categories.
Innscor said it remained focused on sustaining volume growth while maintaining disciplined pricing strategies designed to preserve affordability and market relevance.
The company added that emphasis was being placed on operational efficiencies, procurement optimisation and route-to-market improvements to protect margins.
Economists say the focus on efficiencies and cost containment is becoming increasingly important as businesses prepare for potentially prolonged global uncertainty.
An economic snapshot released by FBC Securities noted that the central economic question for the remainder of 2026 was whether domestic policy measures could absorb prolonged external shocks.
The report projected Zimbabwe’s economic growth would moderate to approximately 5 percent this year, still comparatively strong by regional standards, but reflecting elevated energy costs, slower global growth, tight monetary conditions and agricultural input pressures. It further projected that inflation could rise during the second quarter, before stabilising later in the year, provided geopolitical tensions do not intensify materially.
“The principal risks to exchange rate stability remain another significant oil price spike, speculative pricing, increased capital flight and a further acceleration in imported inflation pressures,” the report said.
“Nonetheless, reserve accumulation and continued fiscal discipline provide a credible protection mechanism.”
Economists say one of the key positives for Zimbabwe is that the authorities now possess stronger policy credibility than during previous periods of economic turbulence.
Mr Mapfumo said the Government’s commitment to fiscal discipline and monetary restraint had played a critical role in anchoring market expectations.
“The importance of policy consistency cannot be overstated,” he said. “For businesses, predictability matters more than anything else. When companies can forecast exchange rates, inflation trends and input costs with greater confidence, they are more willing to invest, expand operations and plan long-term.”
He said maintaining confidence would require continued discipline.
“Any significant policy reversals or market distortions could quickly destabilise confidence, particularly at a time when global uncertainty is already elevated,” he said.
Beverages giant Delta Corporation also reported improving trading conditions across its Zimbabwean operations, driven by currency stability, declining inflation and better availability of key raw materials.
The firm’s chairperson, Mr Todd Moyo, said the positive economic outlook, supported by improved agricultural output, firm commodity prices and continued diaspora remittances, had created opportunities for the group to invest ahead of demand.
“Notwithstanding this, geopolitical developments, including ongoing international trade policy uncertainty, Middle East tensions and the impact of global tariff disputes, may place upward pressure on certain input and logistics costs and could disrupt the current momentum,” he said.
Delta said it had accelerated major capacity expansion projects, including the Belmont brewhouse and packaging line, as well as brewing upgrades at the Southerton brewery, to support rising sales volumes.
The company noted that commissioning lead times remained extended because of global conflicts and supply chain disruptions.
The group also raised concern over the sugar content surtax imposed on beverages, saying the levy remains above regional benchmarks and was encouraging import substitution and migration towards unregulated alternatives.
Delta said it will continue to engage the authorities to review the levy in order to support sustainable sector growth and fiscal efficiency.
According to the Confederation of Zimbabwe Industries (CZI), inflation management has remained relatively effective despite the external shocks triggered by the Middle East conflict.
The organisation said April 2026 inflation data appeared to have captured the full effect of war-induced price increases, with inflation remaining within single digits.
CZI warned that inflation risks remain tilted to the upside because the conflict had not yet ended and supply-side pressures could persist into the second half of the year.
“Any further adjustments in fuel prices, alongside persistent supply-side constraints, could sustain upward pressure on prices in the coming months,” the organisation said.
CZI said businesses should prioritise strengthening cost-management strategies, improving energy efficiency, optimising supply chains and exploring alternative sourcing options where feasible.
The industrial lobby also said policymakers should maintain macroeconomic stability and address key cost drivers, particularly fuel pricing, in order to contain inflationary pressures and support business sustainability.
Another economist, Mr Persistence Gwanyanya, recently said Zimbabwe’s improved macroeconomic environment had significantly reduced speculative behaviour that previously destabilised markets.
“The stabilisation of the exchange rate has improved pricing confidence across sectors,” he said. “Businesses are now able to manage inventories and pricing models with greater certainty, which is critical for industrial recovery.”
He cautioned that external shocks remain difficult to control.
“Zimbabwe imports a significant proportion of fuel, machinery, raw materials and industrial inputs. This means global disruptions inevitably transmit into the domestic economy,” said Mr Gwanyanya.
“Businesses, therefore, need to strengthen resilience by diversifying supply chains, improving productivity and investing in efficiency-enhancing technologies.”
