HARARE — Zimbabwe’s 2026 Mid-Term Budget and Economic Policy Review is expected to place economic stability, fiscal discipline and structural reforms at the centre of Government policy as authorities seek to consolidate recent gains while positioning the economy for sustainable growth, according to State Media.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube is scheduled to present the review on Thursday amid growing expectations from businesses, investors and households for policy clarity on taxation, investment reforms, currency transition and measures to improve competitiveness.
The State Media reported that economic analysts are urging Government to maintain policy consistency rather than introduce major policy shifts, arguing that the current macroeconomic environment provides a foundation for deeper reforms.
The review comes as Zimbabwe’s economy has shown resilience despite global uncertainty, geopolitical tensions and difficult external conditions.
Recent economic indicators point to declining inflation, relative stability of the Zimbabwe Gold (ZiG) currency, stronger foreign currency inflows, improving fiscal revenues and robust performances in agriculture and mining.
Unlike the annual National Budget, the Mid-Term Review primarily evaluates economic performance during the first half of the year, assessing revenue mobilisation, expenditure trends, fiscal execution and broader economic developments.
It also provides Treasury with an opportunity to adjust projections, address emerging challenges and report progress on reforms under the National Development Strategy 2 (NDS2).
The State Media said businesses and investors are particularly interested in Government’s position on the transition towards a mono-currency system, investment protection mechanisms, industrial incentives and reforms aimed at improving the business environment.
Economic analyst Mr Persistence Gwanyanya said the current economic environment supported policy continuity rather than major changes.
“The 2026 Mid-Term Fiscal Policy Review occurs against a backdrop of macroeconomic stability and renewed growth momentum, notwithstanding adverse external shocks, notably the geopolitical escalation involving Iran, Israel and the United States,” he said.
Mr Gwanyanya said Zimbabwe’s economic resilience demonstrated the effectiveness of current policy measures.
“This resilience underscores the effectiveness of current policy frameworks, suggesting that the upcoming review will prioritise policy continuity over structural deviations,” he said.
The country’s fiscal position has strengthened significantly during the first half of 2026, supported by increased economic activity in key sectors.
According to the State Media, Zimbabwe Revenue Authority (ZIMRA) collections increased by about 47 percent during the first five months of the year, rising from US$2,95 billion recorded during the same period in 2025 to US$4,34 billion.
The improved revenue performance has been attributed largely to stronger activity in mining and agriculture, prompting Treasury to revise the annual revenue target upwards to US$9,2 billion.
Mr Gwanyanya said the improved collections could provide room for Treasury to revise the overall 2026 National Budget, initially set at US$9,7 billion.
Economic growth has also exceeded expectations, with Treasury estimating first-half GDP growth at 6,8 percent following an 8,3 percent expansion in 2025.
The initial 2026 growth target was set at 6,6 percent.
However, analysts say the market is increasingly focused not only on revenue growth but on how additional resources will be deployed to improve productivity and strengthen economic competitiveness.
Mr Gwanyanya said businesses wanted Government to demonstrate how stronger fiscal inflows would translate into improved productivity, lower operating costs and enhanced resilience.
“Policy focus is now shifting toward microeconomic efficiency and improving the business environment,” he said.
“The market expects tangible progress on regulatory reforms, sector reviews and a clear roadmap outlining how the Government intends to sustain private sector competitiveness.”
A key issue expected to receive attention is the ongoing review of business licences, permits, levies and regulatory charges.
Cabinet recently approved measures aimed at reducing the cost of doing business by removing duplication and unnecessary compliance requirements.
Analysts expect Minister Ncube to provide an update on implementation timelines and progress.
Investment analyst Mr Wafa Kuchera said tax policy would be among the most closely watched areas of the Mid-Term Review.
While acknowledging Government’s need to mobilise domestic resources, he argued that the current tax framework places significant pressure on formal businesses and consumers.
“It is difficult to ask the minister to do more in some areas while simultaneously asking him to collect less in taxes, but that is exactly what we are asking him to do,” Mr Kuchera said.
“The Government needs to become more efficient and fiscally creative with what it collects to make the impact of taxes go further.”
He called for a review of taxes that disproportionately affect consumers and compliant businesses, particularly the Intermediated Money Transfer Tax (IMTT).
According to Mr Kuchera, the tax burden falls heavily on formal businesses and individuals using banking channels, while having limited impact on the largely cash-based informal sector.
He also called for consideration of targeted relief measures on consumption taxes affecting essential goods.
Mr Kuchera said fiscal policy would become increasingly important as Zimbabwe prepares for a possible transition towards a mono-currency system.
He argued that Government should simultaneously promote exports, reduce import dependence and strengthen domestic production.
“As we move towards a mono-currency monetary system, fiscal authorities need to incentivise the use of the local currency while promoting exports and import substitution,” he said.
“This means lowering the cost of doing business, creating more employment opportunities and encouraging formalisation.”
He also urged continued investment in strategic infrastructure while ensuring mining companies contribute more towards environmental rehabilitation and community development.
Capital market analysts are expected to closely monitor Government’s position on the future of the Victoria Falls Stock Exchange (VFEX) and the Victoria Falls International Financial Services Centre under a future mono-currency framework.
Investment analyst Mr Enock Rukarwa said investors required greater clarity on safeguards protecting capital markets during currency reforms.
“The minister needs to re-emphasise the safeguards that will remain in place after de-dollarisation. What are the safeguards? How do we ensure policy consistency and continuity? How do we protect investors’ funds?” he said.
Mr Rukarwa said investor confidence depended on predictable policies and strong institutional protections.
He also called for a review of taxes affecting financial institutions, arguing that reducing costs for banks would support investment and economic expansion.
Financial services firm FBC Securities said Zimbabwe entered the second half of 2026 with stronger economic fundamentals.
Its Half-Year 2026 Economic and Stock Market Outlook highlighted declining inflation, exchange rate stability, rising foreign currency inflows and improved reserves as key drivers of confidence.
The report noted that foreign currency receipts increased to US$10,72 billion during the first half of 2026, compared with US$7,25 billion during the same period last year.
International reserves rose to US$1,6 billion by the end of June, equivalent to about 1,6 months of import cover.
Annual ZiG inflation remained below five percent, closing June at 4,72 percent, allowing the Reserve Bank of Zimbabwe’s Monetary Policy Committee to reduce the Bank Policy Rate from 35 percent to 30 percent.
FBC Securities said these improvements created an opportunity for Government to focus on strengthening capital markets, accelerating formalisation and improving productivity rather than implementing major policy changes.
The brokerage expects mining and agriculture to remain the main drivers of Zimbabwe’s projected five percent economic growth in 2026, supported by favourable commodity prices, strong tobacco exports and diaspora remittances.
Economist Mr Eddie Cross also expects policy continuity, saying Government is likely to maintain its current fiscal approach.
“I expect a few changes and think they will maintain the cash-based budget implementation strategy we have witnessed so far this year,” he said.
“I am sure he will report a fiscal deficit in line with expectations and progress on the IMF Staff Monitored Programme.”
Beyond reviewing economic performance, the Mid-Term Budget Review is expected to provide updates on broader reforms, including efforts to expand the tax base through improved registration and compliance within the informal economy.
With economic stability increasingly established as the foundation of recovery, analysts say the next phase of Zimbabwe’s policy agenda will be judged by its ability to convert macroeconomic improvements into stronger productivity, investment and private sector growth.
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