HARARE – Zimbabwe’s 130-year-old stock exchange is facing a deepening crisis of investor confidence, shrinking liquidity and corporate delistings, raising questions about whether recent gains in share prices reflect a genuine recovery in the country’s capital markets.
International investor and former Zimbabwe fund manager Ritesh Anand has warned that the Zimbabwe Stock Exchange (ZSE) risks becoming increasingly irrelevant to an economy dominated by US dollar transactions, informal businesses and mineral exports that largely bypass public equity markets.
Writing for NewZwire on Friday, Anand said the exchange’s annual trading value had fallen dramatically from its late-1990s levels, despite Zimbabwe’s economy becoming substantially larger.
The ZSE recorded US$513 million in share turnover in 1997, compared with US$196 million in 2025, according to figures cited in his analysis.
The decline is particularly striking because Zimbabwe’s economy is now officially valued at approximately US$59.7 billion, yet the country’s principal stock exchange struggles to mobilise investment capital on a scale commensurate with that economic activity.
Anand, who managed unit trusts at First Mutual Life during the exchange’s more active years, recalled a market characterised by intense competition among stockbrokers, institutional investors and foreign fund managers.
His central argument is that Zimbabwe’s capital market has suffered not simply from weak economic performance, but from successive policy decisions that undermined investor confidence and discouraged long-term investment.
Since 2020, 15 companies have left the ZSE outright, according to Anand, while foreign investor participation has weakened considerably.
He cited figures showing that foreign investors accounted for almost half of share sales in the final quarter of 2025 but only 1.5 percent of purchases, illustrating the imbalance between international capital entering and leaving the market.
The exchange has also become increasingly concentrated, with five companies accounting for 94 percent of trading value during the first quarter.
Such concentration creates a structural liquidity problem: investors may find it difficult to buy or sell meaningful shareholdings without moving prices significantly.
The migration of major companies to the US dollar-denominated Victoria Falls Stock Exchange (VFEX) has provided an alternative trading platform but has not necessarily translated into substantial new capital formation.
Companies including Innscor Africa, Simbisa Brands, Padenga Holdings and First Capital Bank have moved to the VFEX, reflecting the attraction of US dollar trading and comparatively lower transaction costs.
However, Anand argued that relocating existing listings does little to address the underlying shortage of new public share offerings.
A further constraint is the mismatch between Zimbabwe’s predominantly dollarised economy and the ZSE’s local-currency trading framework.
With more than 80 percent of transactions reportedly settled in US dollars, investors face additional currency considerations when purchasing ZiG-denominated equities.
Anand proposed allowing ZSE shares to settle in either ZiG or US dollars while maintaining a single order book, potentially widening participation without requiring investors to convert foreign currency before entering the market.
He also called for lower transaction costs, more predictable repatriation of foreign investment proceeds and stronger protections for minority shareholders during delistings.
Trading costs are another concern. Anand estimated that buying and subsequently selling shares on the ZSE incurs approximately 4.2 percent in charges, compared with 2.15 percent on the VFEX.
Such costs can discourage active trading, particularly in markets where liquidity is already limited.
Beyond trading reforms, Anand proposed listing minority stakes in state-owned enterprises, creating gold-linked investment vehicles and allowing qualifying listed infrastructure securities to count towards pension funds’ prescribed asset requirements.
These measures could potentially redirect domestic savings and a portion of Zimbabwe’s mineral wealth into productive capital-market investment.
The proposals also raise important economic questions.
Dual-currency settlement would require robust clearing arrangements, while state-enterprise listings would depend on credible valuations, transparent governance and investor confidence in the independence of listed companies.
Similarly, gold-backed investment products would need clear rules governing asset custody, pricing, redemption and regulatory supervision.
Zimbabwe’s recent macroeconomic stabilisation offers a possible foundation for reform, but a stable currency and improving inflation figures cannot independently restore market depth.
Anand proposed targets including listed-company valuations equivalent to 25 percent of gross domestic product by 2030 and ten new listings, at least five involving genuine public share offers.
The wider challenge is to restore the exchange’s traditional economic function: connecting household and institutional savings with businesses seeking long-term investment capital.
Without that transformation, Zimbabwe risks retaining a functioning share-trading infrastructure that plays an increasingly marginal role in financing economic development.
For a country seeking to mobilise domestic capital, attract international investors and convert its mineral wealth into lasting productive assets, the future of the ZSE has become more than a question of stock-market performance.
It is a test of whether Zimbabwe can rebuild the institutional confidence required to finance its own economic growth.
