Online Reporter
Nelson Gahadza
ZIMBABWE last month emerged as Africa’s best-performing equity market in United States dollar terms, underscoring growing investor confidence in the country’s improving macroeconomic environment, as inflation eases, exchange rate stability takes hold and corporate earnings strengthen.
Latest data from African Markets, a leading real-time market intelligence platform, shows that the Zimbabwe Stock Exchange (ZSE) delivered a 68,48 percent year-to-date return in US dollar terms as at July 31, 2026, overtaking Nigeria’s 66,89 percent to become the continent’s best-performing bourse among the 17 exchanges tracked.
The performance marks another milestone for Zimbabwe’s capital markets, which have steadily recovered over the past year following the introduction of the Zimbabwe Gold (ZiG) currency and tighter monetary policies that have significantly reduced inflationary pressures.
In local currency terms, Zimbabwe recorded a 73,04 percent year-to-date gain, second only to Ghana.
The latest rankings come against the backdrop of improving macroeconomic fundamentals.
Annual inflation slowed to 3,2 percent in July, marking the third consecutive monthly decline.
The easing inflation has coincided with improved exchange rate stability under the ZiG monetary framework, enabling the Reserve Bank of Zimbabwe to reduce its benchmark policy rate by 500 basis points to 30 percent in June, although it remains among the highest policy rates in Africa.
An IH Securities July Monthly Snapshot highlighted the improving market environment, noting that the ZSE gained 15,08 percent in July, outperforming regional peers including Nigeria, Kenya, South Africa and Mauritius.
The report further shows that the total value traded on the ZSE rose by 74,05 percent month-on-month to ZiG530,13 million, reflecting stronger investor participation, while the official exchange rate remained broadly stable at ZiG26,68 to the US dollar.
Investment analyst Mr Enock Rukarwa said Zimbabwe’s emergence as Africa’s top-performing equity market reflected both macroeconomic improvements and renewed confidence in listed companies.
“The strong performance is largely a result of improving macroeconomic fundamentals,” he said. “The sustained decline in inflation, exchange rate stability and tighter monetary policy have created a more predictable investment environment. Investors are increasingly able to value companies with greater certainty than was the case during periods of high inflation and currency instability.”
Mr Rukarwa said the improved macroeconomic environment had strengthened confidence across Zimbabwe’s capital markets, driving increased demand on both the ZSE and the Victoria Falls Stock Exchange.
“What we are seeing in the capital markets is confidence driven by the relative stability that has been achieved in the economy,” he said.
“That stability has encouraged investors to increase their participation on both the Zimbabwe Stock Exchange and the Victoria Falls Stock Exchange.”
Mr Rukarwa said growing foreign currency earnings had also reinforced investor confidence.
“When you look at the numbers, foreign currency receipts reached US$10,72 billion between January and June, and the Government is projecting around US$20 billion by year-end, with import cover expected to remain at about two months,” he said.
“These indicators demonstrate that the economy has become more stable, creating confidence and sustaining demand in the equity market.”
Mr Rukarwa said Zimbabwe was becoming increasingly attractive to both direct foreign investors and portfolio investors because of the improved macroeconomic environment.
“On a relative basis, Zimbabwe is becoming a more attractive investment destination,” he said.
“Investors are responding to the stability that has been achieved, and this is beginning to be reflected in corporate performance.”
He pointed to the performance of major listed companies as evidence of the improving operating environment.
“Companies such as Delta continue to record significant growth across their major product lines, including lager beer, sparkling beverages and sorghum beer,” said Mr Rukarwa.
“This suggests that economic activity is improving. US dollar earnings have also increased across many listed companies, and, as more half-year financial results are released, we expect average earnings growth of around five percent or more across most sectors.”
Mr Rukarwa said policy consistency would now be critical if Zimbabwe was to consolidate its gains.
“Maintaining fiscal discipline, preserving exchange rate stability and ensuring that inflation remains under control will be essential,” he said.
“Investors reward consistency and sustained policy credibility will determine whether these gains are durable rather than temporary.”
Economist Mr Walter Mapfumo said the introduction of ZiG had fundamentally changed investor perceptions by restoring confidence in monetary policy.
Mr Mapfumo cautioned that maintaining investor confidence would require continued policy discipline.
“Confidence is earned over time. The Government and monetary authorities need to maintain prudent fiscal management, avoid excessive liquidity growth and continue strengthening transparency in the foreign exchange market,” he said.
“These measures will reinforce credibility and encourage longer-term investment.”
Mr Mapfumo said improving macroeconomic conditions were beginning to attract greater foreign investor interest.
“International investors pay close attention to macroeconomic stability before committing capital,” he said.
“Zimbabwe is becoming more attractive because investors are seeing lower inflation, a more stable currency and improving corporate profitability.
“These are the key ingredients that institutional investors look for.”
Mr Mapfumo said further reforms would strengthen Zimbabwe’s competitiveness.
“There is still scope to improve the ease of doing business, deepen capital markets, enhance market liquidity and provide greater policy certainty,” he said.
“Continued reforms in these areas would broaden the investor base and support sustained economic growth.”
The improved market performance has also been supported by stronger corporate earnings, with several listed companies reporting resilient financial results despite a challenging operating environment.
IH Securities noted that increased trading activity on the ZSE reflected growing confidence among domestic investors, while exchange rate stability continued to provide a favourable environment for business planning and long-term investment.
