Online Reporter
Business Reporter
Prescribed asset instruments worth approximately US$252,38 million had been approved in the nine months ended September 30, 2025, with investments spread across agriculture, property, banking, renewable energy and private equity.
Prescribed assets are investments designated by the Government as strategic to national development; these typically include infrastructure projects, public sector-related instruments and other initiatives aligned with economic policy priorities.
Under existing regulations, pension funds are required to invest a minimum of 20 percent of their total assets in these instruments. According to the Insurance and Pensions Commission (IPEC) pensions report, prescribed assets, inclusive of gold-backed investments, rose by 7,53 percent to US$294,63 million as at September 30, 2025, from the US$274 million recorded at the end of June.
The approved instruments reflect the continued use of prescribed assets as a policy tool to channel long-term institutional capital into sectors viewed as critical to national development, including food security, housing, energy and financial sector stability.
“The increase points to a steady uptake of assets granted prescribed status, which are designed to channel long-term savings into priority economic sectors,” IPEC stated in the report.
During the quarter under review, the largest prescribed asset approval was granted to OMLAC DREIT, which received US$109,3 million in March 2025 for a developmental real estate investment trust (REIT).
The approval underscores a growing appetite for property-backed instruments aligned with infrastructure and urban development.
Agriculture attracted significant funding, led by AFC Agrobills worth US$33,6 million in January 2025 to finance winter cropping activities. This move aligns with Government efforts to support agricultural productivity and import substitution.
Furthermore, the US$7,5 million Agrowth Debenture was approved in February to support agricultural operations.
The financial sector featured prominently as well, with the Zimbabwe Women Microfinance Bank approved for US$10 million to support bank recapitalisation.
In addition, Empower Bank planned to raise US$14,4 million through housing bills approved in March, aimed at expanding housing delivery and access to affordable accommodation.
Industrial and private capital mobilisation was also evident; Zimgold Commercial Paper was looking for US$10 million for working capital requirements, while Vakayi Capital was approved for US$10 million to establish a private equity fund.
This highlights the growing role of alternative investment vehicles within the prescribed assets framework.
In the health and bio-processing space, Willowmead Bio Pvt Ltd had US$2 million approved for the establishment of a cannabidiol (CBD) extraction and processing plant, signalling the diversification of prescribed assets into value-added manufacturing.
Renewable energy projects continued to attract support, with Gutu Solar and Solar Century approved for US$3,77 million and US$7,99 million, respectively, to develop solar power projects aimed at easing electricity supply constraints.
Financial analyst, Mr Malone Gwadu, said prescribed asset instruments remained a strategic policy lever for directing long-term institutional capital into priority sectors, particularly infrastructure, energy, housing and productive industries.
He noted that by requiring pension funds and insurers to allocate a portion of their portfolios to these instruments, the Government is able to mobilise “patient capital” that aligns with long-term national development goals.
“A prescribed asset instrument helps in aligning national development priorities with corporate objectives by ensuring maximum value realisation through incentive mechanisms such as tax holidays,” he said.
“Hence, the policy tool acts as a persuasive mechanism that aims to further develop and capacitate areas that the Government sets as key for development.”
Mr Gwadu said when properly structured, prescribed assets can provide predictable returns, inflation protection and relative stability for institutional investors, while simultaneously closing financing gaps in sectors often underfunded by short-term private capital.
He highlighted that the effectiveness of the policy depends on strong project selection, transparent governance and credible repayment mechanisms to safeguard contributors’ funds.
Investment analyst, Mr Enock Rukarwa, said prescribed assets were fundamental for economic growth.
He noted that as the economy stabilised regarding macroeconomic variables such as inflationary pressures and exchange rate volatility, the key thrust for business operations had shifted toward revenue growth and defending margins.
“The challenge with most of these prescribed asset investment clusters is that they carry a lower yield compared to other assets,” said Mr Rukarwa.
“In as much as it is a compliance requirement to have certain assets within your balance sheet invested in prescribed asset clusters, it also constrains revenue maximisation. “Some of these assets are not high-yielding.”
He said the reason most prescribed assets were not fully subscribed was the yield they carried in a stable environment.
“You need to be investing in assets that are high-yielding and it has been a worrying factor in many of these prescribed asset instruments,” said Mr Rukarwa.
Economist Mr Walter Mapfumo said from a policy perspective, prescribed assets offered a practical mechanism to match the long-dated liabilities of pension funds with long-term development projects.
“He suggested these instruments can reduce reliance on external borrowing by anchoring funding in local institutional savings.
“For sectors deemed critical to national development, prescribed assets help crowd in investment and signal Government commitment to strategic projects,” he said.
“That said, maintaining investor confidence is essential; this requires competitive yields, clear exit options and consistent policy implementation to ensure that prescribed assets remain a viable and sustainable investment class rather than a compliance burden.”
