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ZIMBABWE’S US$3,5 billion pension industry presents a significant opportunity to finance business expansion, infrastructure development and economic transformation, but capital markets must deepen liquidity, expand investment products and strengthen regional integration to unlock the full value of institutional savings.
With pension funds holding assets estimated at US$3,5 billion as at June 2026, the country has a substantial domestic funding pool that could support productive investment and reduce reliance on conventional sources of financing.
Zimbabwe Stock Exchange (ZSE) chairman Mr Martin Mushambadope said improving macroeconomic stability and renewed investor confidence had created an opportunity for the country’s financial markets to mobilise these resources towards productive sectors.
Addressing delegates at the inaugural Financial Markets Stakeholder Summit in Bulawayo yesterday, Mr Mushambadope challenged market players to translate the improving economic environment into deeper markets capable of connecting long-term savings with viable investment opportunities.
He said pension fund assets were comparable in size to the entire market capitalisation of the ZSE, highlighting the potential to expand the role of capital markets in financing the economy.
“A capital market is measured by the capital it connects. That is the real test of our theme. In terms of connecting capital, consider the savings we already have.
“Pension funds held about US$3,5 billion at the end of June 2026, according to IPEC, which is of the same order as the entire market value of the Zimbabwe Stock Exchange, which is roughly US$3,5 billion,” he said.
Mr Mushambadope said short-term insurance companies also held more than US$500 million in assets, while about 38 percent of pension assets remained invested in property.
This presented opportunities to diversify institutional portfolios and direct more capital towards listed companies, infrastructure projects and other productive investments.
The challenge, however, is ensuring that available savings find suitable investment instruments and
sufficiently liquid markets through which they can be deployed.
Mr Mushambadope said Zimbabwe’s improving macroeconomic fundamentals had provided a stronger foundation for capital market development.
He pointed to annual ZiG inflation of 3,7 percent, projected economic growth of 5 percent this year and the country’s achievement of all benchmarks under the International Monetary Fund’s Staff-Monitored Programme.
He also highlighted the Reserve Bank of Zimbabwe’s reduction of its policy rate from 35 percent in June to 27,5 percent, while foreign currency reserves had exceeded US$2 billion.
These developments, he said, were strengthening the environment for investment and supporting renewed confidence in financial markets.
The improved sentiment has been reflected in the performance of the country’s two exchanges.
“In the seven months to July 2026, the ZSE All Share Index gained 68.5 percent in US dollar terms, the strongest of the seventeen African exchanges tracked by African Markets.
“In the first half, value traded on the ZSE reached ZiG7,6 billion, three times last year’s, and on VFEX it more than doubled to US$166 million.”
However, Mr Mushambadope cautioned that the return of investor confidence had not been matched by sufficient market depth.
“Confidence has returned faster than depth. In recent sessions, the ZSE traded between ZiG7 million and ZiG20 million a day, well under one million US dollars,” he said.
His observations highlight the need to expand the range of investment products, attract more participants and improve liquidity to enable businesses to raise long-term capital while giving institutional investors more opportunities to deploy their resources.
ZSE chief executive Mr Justin Bgoni reinforced the positive outlook, saying both the ZSE and Victoria Falls Stock Exchange (VFEX) had delivered meaningful returns to investors this year.
He said pension funds, asset managers and insurance companies were among those benefiting from improved market performance.
“So the market, on average, has done very well.
“People have made money this year, both on ZSE and on VFEX, and it’s proper money.
“So I think you can see it in terms of results, especially of pension funds, asset managers, as well as insurance companies.
“So I think in terms of money, there has been new money made and I think we have done a good job of seeing how much the market is worth,” he said.
Mr Bgoni said the performance of the All Share Index demonstrated that the domestic market was delivering value despite perceptions that Zimbabwe’s capital markets were not functioning effectively.
“There is still some perception out there that the market is not working,” he said.
He argued that the returns should be assessed against the prevailing inflation environment, noting that investors did not necessarily benefit from high nominal returns when inflation was eroding the value of their investments.
“In terms of the return on the All-Share Index, these have been some of the best numbers and you must remember, nobody needs to have very high numbers when there is high inflation.
“So I think we really believe that we have done well as a capital market in terms of it,” he said.
Mr Bgoni commended the Government and the Reserve Bank for measures implemented over the past two years, saying macroeconomic stability had provided a more supportive operating environment for financial markets.
“So I think in terms of macro context, I think the Reserve Bank and the government of Zimbabwe have done a fantastic job in the last two years, this year in particular, in terms of stability,” he said.
Beyond domestic market development, stakeholders said stronger regional partnerships would be critical in unlocking larger pools of capital and expanding investment opportunities for African businesses.
Kenya Association of Stockbrokers and Investment Banks director Mr Ewart Salins called for African exchanges to accelerate integration through cross-border trading platforms, regulatory cooperation and partnerships.
He said Zimbabwe and Kenya faced similar challenges in mobilising long-term capital, broadening participation and connecting their financial markets to regional investment flows.
“We come to Bulawayo to learn as much as to share. Kenyan intermediaries are asking the same questions as Zimbabwean ones: how to raise long-term capital, widen participation and connect our markets to the region,” he said.
Mr Salins said an interconnected African market could enable businesses to raise capital beyond their domestic borders while giving investors access to a wider range of investment opportunities.
“Imagine a business in Bulawayo raising capital in Nairobi, Johannesburg, Gaborone and Lagos: listed at home, traded across the region and owned by pension funds, unit trusts and mobile savers across the continent.
“The next chapter of African capital markets will be defined by the markets that connect us, not the borders that separate us,” he said.
He proposed Zimbabwe’s inclusion in the African Exchanges Linkage Project (AELP), an initiative designed to connect African securities exchanges and facilitate cross-border securities trading.
“Bring Zimbabwe into the African Exchanges Linkage Project (AELP) and move Phase 2 from connection to live cross-border trades.
“Finish the Southern African Development Community (SADC) exchanges’ order router and link it to the AELP, so one broker reaches both.
“Agree mutual recognition of products and intermediaries between Kenya’s Capital Markets Authority and Zimbabwe’s Securities and Exchange Commission,” he said.
Such arrangements could enable Zimbabwean companies to access investors across multiple African markets, potentially improving liquidity and broadening the sources of capital available for expansion.
For pension funds, asset managers and individual investors, regional connectivity would also widen portfolio diversification opportunities.
However, effective integration would require more than technological connections, with regulatory cooperation, harmonised market practices, efficient settlement systems and investor protection remaining important considerations.
The three speakers’ contributions point to an emerging opportunity for Zimbabwe to position its capital markets as a stronger financing channel for the domestic economy while building connections with regional financial centres.
Mr Mushambadope said the inaugural summit was intended to bring together policymakers, regulators, issuers, investors and intermediaries to develop practical solutions for the sector.
“This is the first time we have gathered in one room the policymakers, regulators, issuers, investors, and intermediaries who together make these markets function and the timing matters.
“Stability has opened the door. What walks through it, whether capital, ideas or ambition, depends on the choices made in rooms like this one.”
