Prof Mthuli Ncube
LET me begin with the global economic landscape because what happens beyond our borders has a direct bearing on our economy.
The developments shape our risks, influence our trade and investment opportunities, and ultimately affect the cost of living for our people.
Despite the disruptions arising from the oil crisis, the global economy has demonstrated remarkable resilience.
Global growth is projected at 3,1 percent for 2026 and 3,4 percent for 2027. This raises an important question: What has helped the global economy withstand this latest shock?
There are three things.
First, countries have adapted by rerouting energy supplies and increasing production in other parts of the world; second, the drawdown of existing inventories, the shift to alternative energy sources and improvements in energy efficiency have helped ease pressure on energy markets; and third, the investment boom associated with AI (artificial intelligence) has provided fresh momentum to global economic activity and supported international trade.
Together, these factors have helped the global economy remain more resilient than might otherwise have been expected. However, this resilience has not come without a cost.
High energy prices
Global headline inflation is projected to rise to 4,7 percent in 2026, mainly because of high fuel prices and high interest rates, before easing to 4,1 percent in 2027. This reminds us that, even when global growth holds up, price pressures can persist and continue to affect businesses, households and national budgets.
For Zimbabwe, developments in the Middle East are important.
The region remains central to global energy supply, while the Strait of Hormuz carries approximately 20 percent of the world’s oil.
Any disruption to this critical shipping route immediately raises concerns about supply and puts upward pressure on international fuel prices.
We have already felt the effects of these developments. In April 2026, Brent crude oil prices surged to around US$120 per barrel, increasing the cost of our fuel imports and putting pressure on the domestic economy.
At the same time, higher global oil prices contributed to inflationary pressures earlier in the year. Yet the same geopolitical uncertainty also created opportunities for commodity exporters, as demand for safe-haven assets pushed gold prices to record levels.
For Zimbabwe, this provided an important boost to export earnings.
As an immediate intervention, we saw Government removing diesel taxes during the Middle East crisis, cushioning domestic fuel prices.
We will continue to monitor developments closely. International fuel prices have implications not only for our import bill, but also for transport costs, production expenses, inflation and ultimately household consumption.
Our response must, therefore, remain measured, timely and informed by changing conditions.
While oil prices have presented challenges, developments in the gold market have offered some relief. Gold surged to record highs of above US$5 500 per ounce in early 2026, reflecting heightened global uncertainty and strong demand for safe-haven assets, before declining to below US$4 000 per ounce in June.
The market subsequently recovered, with gold trading at around US$4 360 per ounce in September 2026.
Although prices remain subject to fluctuations, these elevated levels continue to provide an important opportunity for our economy.
For Zimbabwe, the significance of strong gold prices cannot be overstated.
Gold is a source of export earnings, foreign currency and reserve accumulation.
Higher prices, therefore, strengthen our external position and can provide support to the domestic currency.
We are also seeing encouraging developments in the platinum group metals market.
Platinum prices are forecast to rise by approximately 53 percent in 2026, reaching around US$1 950 per ounce, a multi-year high.
This recovery presents another opportunity to strengthen mineral export earnings.
As prices improve, our focus must be on maximising the value we derive from our mineral resources, particularly through increased production, local processing and beneficiation.
Lithium has likewise recovered from the sharp price declines experienced during the period of global oversupply.
However, the market remains volatile, underscoring the need for a balanced approach that takes advantage of favourable prices while preparing for future fluctuations.
The importance of lithium to our export sector is already evident.
Domestic lithium exports reached US$2,15 billion, accounting for 45,6 percent of total mineral exports, excluding gold, and overtaking platinum group metals.
This is a significant development that reinforces the growing contribution of lithium to Zimbabwe’s external sector.
Turning back to crude oil, prices crossed US$100 a barrel again in September amid ongoing geopolitical tensions.
Growth projections
Real GDP (gross domestic product) growth in Zimbabwe is projected at 5 percent in 2026 and 3,5 percent in 2027.
The SADC (Southern African Development) bloc is projected to grow at an average of 3,2 percent in 2026 and decline to 3,1 percent in 2027.
This slowdown is mainly attributable to ongoing Middle East tensions, which have disrupted trade, tourism and shipping lanes and caused sharp spikes in global oil, fertiliser and energy costs.
Since our stabilisation efforts began, our cumulative growth has outpaced the SADC average, hitting roughly 16 percent compared to SADC’s 10 percent.
Meanwhile, our inflation has plummeted from an off-scale 687 percent in 2024 down to under 5 percent today, bringing us right in line with the regional norm.
Domestic developments, outlook
Allow me now to turn to our domestic economy, where we have recorded significant progress.
In 2025, Zimbabwe’s economy grew by 8,3 percent, making it the second-fastest-growing economy in Africa, behind Ethiopia.
This performance placed Zimbabwe among the strongest performers in the region, ahead of larger economies such as South Africa, which grew by 1,1 percent, and Nigeria, which recorded growth of 4 percent.
This demonstrates the momentum our economy has built and the potential that exists when stability, production and investment begin to reinforce one another.
Our strong performance was supported by several important factors, including improved macroeconomic stability, recovery from drought conditions, better electricity supply and robust export performance.
Together, these developments created a more supportive environment for economic activity across key sectors. Looking ahead, economic growth is projected at 5 percent in 2026.
While this moderates from the exceptional performance recorded in 2025, it still keeps our country ahead of the projected regional average.
In 2027, growth is expected to moderate further to 3,5 percent, reflecting the anticipated impact of climatic risks and a more challenging external environment.
Nevertheless, our focus remains on sustaining the foundations for long-term growth and ensuring that economic progress translates into tangible benefits for our people.
Beyond annual growth rates, we must also recognise the structural progress made by our economy. Our economy is now more than twice the size it was in 2017.
Nominal GDP is projected to reach US$66,4 billion in 2026 and US$69,1 billion in 2027.
This expansion reflects a significant change in the scale of economic activity and provides an important foundation for our long-term development ambitions. We are also making progress towards our ambition of attaining upper middle-income status.
Zimbabwe has reached approximately 88 percent of the GNI (gross national income) per capita target of US$4 636, with GNI per capita currently estimated at US$4 070, according to the World Bank.
This is encouraging progress, but the remaining distance reminds us that our task is not simply to grow the economy in size.
We must also deepen productivity, expand opportunities, create decent jobs and ensure that rising national income improves the livelihoods of ordinary Zimbabweans.
In 2025, growth was broad-based and structural. The agriculture sector grew by 27,9 percent, electricity supply jumped 14,9 percent, transport and mining both grew by 10,4 percent and manufacturing expanded by 5,1 percent.
Sectoral growth Food security
Agriculture remains central to this ambition given its contribution to food security, employment, rural livelihoods and industrial development.
In 2025, the sector rebounded strongly, recording growth of 27,9 percent.
This recovery was supported by climate-smart farming practices under the Pfumvudza/Intwasa programme, alongside Government input support.
Tobacco was among the notable performers during the year, with deliveries reaching 359 million kilogrammes by the end of September 2026.
This performance highlights the continued importance of tobacco to agricultural output, export earnings and rural incomes.
For 2026, agriculture is projected to grow by 5 percent.
However, going into 2027, the sector is expected to face setbacks due to the anticipated super El Niño, which is usually associated with drought.
Drought strategy
The Cabinet-approved 2026/2027 Agricultural Six-Pillar Drought Plan prioritises the following:
- Enhanced Strategic Grain Reserve: AI-powered silos to build a 600 000-tonne reserve by October 2027, buying from the summer 2025/2026, winter 2026 and winter 2027 harvests.
- Climate-smart production: Accelerate irrigation development and promote summer irrigated cereal production.
- Integrated financing: A climate-proofed Presidential Input Programme (Pfumvudza/Intwasa), plus finance through NEAPS (National Enhanced Agriculture Productivity Scheme), ARDA (Agricultural and Rural Development Authority), the private sector and self-financed models.
- Enhanced imports: Households may import basic goods until March 2028, and the private sector may import cereals for food and feed.
- Livestock drought mitigation: Promote grazing and water adequacy for animals.
- Early warning and coordination: Stronger early warning with farmers, village heads, headmen and chiefs, backed by capacity building.
Our approach is anticipatory, not reactive.
A super El Niño does not automatically mean drought, but Government is mobilising resources ahead of the shock from its own budget, banks, private contractors and off-takers, agricultural financing, insurance (including sovereign drought insurance) and development partners.
Record tobacco production
For two consecutive years, tobacco has broken records, hitting 355 million kg in 2025 and 359 million kg in 2026, with contract farming accounting for 91,1 percent of deliveries.
While the 2027 output is projected to adjust to 310 million kg attributable to El Niño, our foundation remains ironclad.
Livestock and dairy production
In livestock and dairy, the momentum is unstoppable. Milk production has nearly doubled from 66 million litres in 2017 to 131 million litres in 2026, aggressively substituting imports and empowering local value chains.
Poultry production
Poultry production has similarly climbed 26 percent since 2019, reaching 191,7 thousand tonnes in 2026, propelled by the Presidential Poultry Programme and targeted interventions.
Egg production
Egg production tells the same inspiring story, surging from 37,8 million dozen in 2017 to 125 million dozen in 2026, putting cash directly into rural pockets and projected to hit 144,6 million dozen in 2027.
National cattle herd recovery
Our national cattle herd has recovered to 5,9 million in 2026, projected to break the six million mark at 6,1 million in 2027.
Government interventions are driving this growth, boosting livestock production through aggressive tsetse fly eradication, local vaccine production, artificial insemination and advanced disease diagnostics.
Manufacturing — Structural transformation
In the manufacturing sector, capacity utilisation has climbed from 45,1 percent in 2017 to 61,2 percent in 2025 and is projected to surpass 63,5 percent in 2026.
This structural transformation is anchored by food processing, beverages, cement and milestone heavy industrial production, as in the case of Dinson Iron and Steel Company.
Manufacturing output is now 41,4 percent higher than in 2022, with the volume of manufacturing index rising from 112,48 to 159,1.
Total quantified private and public investments in the manufacturing sector stand at an incredible US$3,56 billion.
Giants such as Dinson (US$1.5 billion), Super Smelters (US$1 billion) and Sandawana Lithium (US$270 million) are transforming our industrial landscape, with late-stage projects maturing into full operation by 2027.
Mining sector
Gold output has doubled since 2017 to over 55,5 tonnes and the lithium industry has scaled from zero in 2019 to 2,6 million tonnes in 2026.
Coal, PGMs and copper are all recording stellar multi-year expansions.
Tourism sector
Tourism is booming!
During the first half of 2026 alone, tourist arrivals surpassed 792 000, while tourism receipts grew by 6 percent to US$537 million.
Our “Open Skies Policy” is paying off spectacularly.
Thanks to this progressive policy, the number of airlines flying into our country has surged from just three during the dark days of Covid-19 in 2020 to 20 in 2026.
Inflation developments
Monthly ZiG (Zimbabwe Gold) inflation remained subdued in the first nine months of 2026, averaging 0,4 percent, reflecting sustained price stability.
Annual inflation fell from a peak of 95,8 percent (July 2025) all the way down to single digits.
It averaged 4 percent over January-September 2026 and stood at 3,7 percent in September, single-digit for the first time in three decades.
US dollar inflation has similarly stabilised around 3 percent.
A stable exchange rate has helped keep prices steady in the shops.
Exchange rate developments
Consistent with the progress on inflation, ZiG has been stable against the US dollar.
It averaged about ZiG26,04 per US dollar over January to August 2026, with steady trading conditions.
We have also witnessed a narrowing of the gap between the official and parallel market exchange rates, which has fallen to below 20 percent.
This narrowing is an encouraging development, pointing to improved confidence in the domestic currency and greater alignment between the two markets.
This stability comes from strong foreign currency inflows and disciplined money management. Our policy framework continues to emphasise market-based instruments, liquidity management and coordination between monetary and fiscal policies.
External sector developments
Our export performance, import requirements, diaspora remittances, current account position and foreign currency reserves all provide important insights into the economy’s capacity to generate and manage foreign currency.
The country’s export performance has strengthened considerably in recent years.
Exports doubled from US$5,3 billion in 2020 to US$11 billion in 2025.
This momentum has continued into 2026.
During the first eight months of the year, exports rose by 60,7 percent to US$9 billion, driven by strong contributions from gold, tobacco, PGMs, lithium and steel.
On the strength of this performance, exports are projected to reach US$14,9 billion by the end of 2026. Beyond higher production and favourable international prices, our strategy must increasingly focus on securing greater value from our mineral resources through beneficiation and value addition.
Looking ahead, exports are projected to increase further to US$15,7 billion in 2027.
Sustaining this trajectory will require continued investment in productive capacity, improved competitiveness and stronger links between mining, manufacturing and other domestic industries.
At the same time, our import bill has also increased, reflecting the needs of a growing economy. Imports rose from US$5,9 billion in 2020 to US$11,6 billion in 2025. During the first eight months of 2026, imports increased by 32,4 percent to US$8,5 billion, largely driven by fuel, machinery, raw materials, vehicles and chemicals.
Given current developments, including elevated international commodity prices, imports are projected to reach US$14 billion by year-end. Diesel imports have grown more than fourfold since 2009, with over 1,1 billion litres imported in the first eight months of 2026 alone, clear evidence of heavy industrial and commercial transport expansion.
Remittances
Money sent home by Zimbabweans abroad remains strong. Diaspora remittances surpassed US$1,55 billion in the first half of 2026, 41,4 percent higher than the first half of last year. They are projected to exceed US$3,2 billion in 2026 and US$3,4 billion in 2027.
These flows are a reliable anchor for the economy and the exchange rate.
Current account balance improves
The strength of our exports and remittance inflows is reflected in the improvement in our current account position.
During the first half of 2026, our country recorded a current account surplus of US$1,1 billion, compared with US$248,2 million during the corresponding period in 2025.
This improvement was supported by a 47,8 percent increase in foreign currency receipts, which reached US$10,7 billion.
Exports accounted for 70,3 percent of these receipts, while remittances contributed 14,4 percent.
The improvement reflects the combined benefits of strong diaspora remittances and higher gold and PGMs prices.
These developments have strengthened foreign currency inflows and improved the country’s external position.
For the full year, the current account surplus is projected to reach US$3,9 billion in 2026, up from US$2,1 billion in 2025.
Our gold and foreign exchange reserves have doubled from US$697 million in June 2025 to US$1,5 billion in June 2026, and are projected to reach US$2,2 billion.
Our reserves now cover roughly four times the entire stock of ZiG reserve money and market deposits.
Infrastructure investments
Turning to infrastructure, we are modernising our infrastructure to world-class standards through the Infrastructure Development Fund.
Government has established the fund to leverage additional resources from local, regional and international institutions, against identified revenue streams, to accelerate infrastructure rehabilitation and development.
On our roads, 18,3km of the dualised Harare-Mazowe section is complete, progress on the Harare-Beitbridge and Bulawayo-Victoria Falls highways is advancing rapidly, and major bridges such as the Manyame and Mucheke (Chevron) river bridges have been successfully commissioned.
Water security remains paramount.
Major dams such as Gwayi-Shangani (76 percent) and Kunzvi (72 percent) are advancing rapidly, backed by the continuous rollout of community boreholes, bringing our cumulative total to 5 395 boreholes drilled.
Our drive towards delivering one million housing units by 2030 is moving full steam ahead, bolstered by modern cluster housing developments across our urban centres.
Through the Rural Electrification Agency, 143 institutional projects, including schools, clinics and police stations, have been successfully energised across all provinces in 2026.
In sport and culture, the 10 000-seat Mosi-oa-Tunya Cricket Stadium in Victoria Falls is on track for completion by December 2026 to anchor our sports tourism economy, alongside newly opened cultural centres in Maphisa and Gokwe. Justice must be accessible to all.
We are completing court complexes in Gwanda, Cowdray Park and Mabvuku-Tafara to bring justice directly to our citizens’ doorstep.
The 2026 National Budget performance
For the full year 2026, revenue collections are projected at ZiG287,64 billion (US$9,4 billion) against projected expenditures of ZiG290,88 billion (US$9,5 billion).
Preliminary outturn for the first nine months shows revenue collected of ZiG224,67 billion against expenditures of ZiG188,68 billion. On a cash basis, income exceeded expenditure by ZiG36 billion, which went towards repaying some of the outstanding Government loan obligations. To year-end, fiscal discipline will be entrenched to limit budget overruns.
The 2027 National Budget priorities
Having assessed the performance of the 2026 National Budget, let me now turn to the priorities that will guide us in 2027.
The 2027 National Budget will be guided by the NDS2 (National Development Strategy 2) priorities, aimed at accelerating the country’s momentum towards the long-term developmental objectives in Vision 2030, while responding to current economic realities.
The focus will be on consolidating 10 priority areas:
- Macro-economic stability and financial sector deepening.
- Inclusive economic growth and structural transformation.
- Infrastructural development and housing.
- Agriculture, food security, climate and environment.
- Science, technology, digitalisation, innovation and human capital development.
- Job creation, youth entrepreneurship and development, creative industry and culture.
- Regional development and inclusivity through devolution and decentralisation.
- Social development, gender and social protection.
- Image building, international relations and trade.
- Good governance, institution building, peace and security.
These priorities reflect Government’s commitment to inclusive, resilient and sustainable growth, notwithstanding the evolving global and domestic challenges.
2027 macro-fiscal framework
In 2027, economic growth is projected to moderate to 3,5 percent, from the initial forecast of 5 percent. The projection rests on these assumptions:
- A super El Niño with high chances of drought.
- Entrenched macroeconomic stability.
- Strong mineral export performance, supported by favourable international commodity prices.
- Continued implementation of ease-of-doing-business reforms.
- Easing of geopolitical tensions, supporting higher global economic growth.
2027 fiscal policy thrust
In line with NDS2 priorities, Government will continue to pursue fiscal consolidation in 2027, with a focus on three targets:
- An overall budget deficit of less than 3 percent of GDP.
- Ensuring that public resources are directed towards programmes and projects that accelerate economic transformation.
- Promoting inclusive growth and improving the overall quality of life for the general citizenry.
Conclusion
To advance the economic transformation agenda under NDS2, Government will sustain structural reforms designed to enhance public spending efficiency and foster dynamic, private sector-led growth.
As we consolidate the milestone achievements of NDS1, our strategy will directly prioritise creating an enabling and attractive environment for both domestic and international investment.
Ultimately, our collective success rests on this shared momentum.
By joining forces to pinpoint and unlock high-potential sectors, we will not merely sustain progress; we will propel a resilient, future-ready economy that delivers long-term prosperity.
Prof Mthuli Ncube is Minister of Finance. He made this presentation at the 2027 Pre-Budget Seminar in Bulawayo.
