Rumbidzayi Zinyuke, Senior Reporter
ZIMBABWE is seeking to consolidate gains made in stabilising the economy and strengthen the financial sector’s capacity to drive investment, industrial growth and job creation through a new five-year development strategy approved by Cabinet.
The Financial Sector Development Strategy (2026-2030) is anchored on President Mnangagwa’s policies and economic reform programmes aimed at restoring macroeconomic stability, rebuilding confidence, promoting investment and laying a firm foundation for the attainment of Vision 2030 and the country’s aspiration to become an upper-middle-income economy.
The strategy, presented to Cabinet by Finance Minister Professor Mthuli Ncube, seeks to transform the banking, insurance, pension and capital markets into a robust, inclusive and competitive financial system capable of mobilising long-term savings and directing resources towards productive sectors of the economy.
Addressing the post-Cabinet briefing yesterday, Information, Publicity and Broadcasting Services Minister Dr Zhemu Soda said the financial sector remained safe and sound, supported by adequate capitalisation and low levels of non-performing loans.
He said significant progress had been made in strengthening the banking sector under the Second Republic, with deposits growing from approximately US$2 billion in 2017 to about US$7 billion in 2026.
“The nation is being informed that the financial sector, encompassing banking, insurance, pension, and capital markets, remains safe and sound, underpinned by adequate capitalisation and low non-performing loans,” said Dr Zhemu.
He said the strategy would build on these gains by strengthening the sector’s capacity to support the national development agenda through improved efficiency, stability, innovation and financial inclusion.
“Confidence building in the financial sector will continue to be advanced to effectively support the country’s national development agenda through, among other initiatives: fostering financial sector deepening; improving financial sector efficiency; enhancing financial stability; strengthening financial infrastructure; promoting the growth of capital markets; enhancing financial inclusion; promoting financial literacy; enhancing financial innovation; and maintaining policy consistency,” he said.
Dr Soda said a robust and well-developed financial sector was critical in facilitating economic growth, investment and employment creation.
Addressing questions from journalists, Professor Ncube said Zimbabwe had made significant progress in rebuilding confidence in its financial services sector, with the growth in deposits providing banks with greater capacity to finance economic activities.
“Basically, in the financial sector, we recognise, first of all, the progress that we have made in building confidence in our financial services sector.
“The progress we have made in financial innovation and in generally strengthening our banking sector, making sure it remains safe and sound,” he said.
He said the increase in deposits over the past eight years was a positive development for the economy as it expanded the resources available for lending.
“This deposit means that the banks have more resources to lend to the public, more resources to lend to corporates and entities that wish to invest in and do business. This is positive for citizens,” said Minister Ncube.
He said improvements in macroeconomic conditions, particularly declining inflation, should create room for lower interest rates, making borrowing more affordable for households and businesses.
“It means that it should become easier, and also with the lower interest rates over time due to lower inflation, it should become easier to borrow from the bank, facilities would be cheaper, and also corporates or businesses can also borrow more from the banks for a lot less in terms of interest,” he said.
Prof Ncube also welcomed the growing practice of banks paying interest on customer deposits, saying this was a positive development for savers.
However, he challenged commercial banks to align their lending rates with changes in the central bank’s policy rate, arguing that the slow downward adjustment of borrowing costs was undermining the benefits of monetary policy easing.
He observed that commercial banks were generally quick to increase lending rates when the policy rate went up but were reluctant to reduce them when monetary conditions eased.
“We have observed that whenever the central bank, working with the MPC to reduce the rate at which banks borrow from the central bank, the banks don’t necessarily follow suit by reducing their own lending rates. On the contrary we see them responding upwards whenever the policy rates were to go up, then they don’t hesitate.
“But whenever they want to reduce, they are slow. So it’s as if interest rates are sticky downward, not from the central bank, but from the commercial bank banks who work with the central bank.
“We appeal to the commercial banks to just work with the central bank and also reduce the interest rates accordingly,” Prof Ncube said.
Under the new strategy, Government will focus on deepening the financial sector, improving efficiency, enhancing financial stability and strengthening financial infrastructure.
The framework will also promote capital market development, expand financial inclusion, improve financial literacy and encourage innovation while maintaining policy consistency.
These interventions are expected to improve the capacity of financial institutions to mobilise domestic savings and channel them into productive sectors, including agriculture, manufacturing, infrastructure and other areas critical to economic transformation.
A strong financial sector is central to Zimbabwe’s development ambitions as the country seeks to increase domestic investment, expand productive capacity and create sustainable employment.
The strategy will therefore provide a framework for ensuring that the financial system not only remains stable but also becomes an effective instrument for financing economic growth and accelerating progress towards Vision 2030.
