THE involvement of local investors in Zimbabwe’s licensed projects has seen a dramatic decline, with new official data revealing their participation collapsing by 97,55% to US$3,15 million in the third quarter of 2025.
The figures, released this week in the Zimbabwe Investment and Development Agency’s (Zida) third-quarter report for 2025, highlight a decisive shift towards foreign-driven ventures.
These now constitute nearly the entirety of the country’s US$3,26 billion in projected investment value.
“The number of new investment licences increased by 23,4% year-on-year, while the total proposed investment value rose sharply by 178,6%,” the report stated.
“This expansion was driven primarily by large-scale, capital-intensive projects in the mining and energy sectors, where investors continue to leverage foreign financing for project development.”
It added: “The data also points to a decline in local capital participation, with contributions falling from US$128,28 million in Q3 of 2024 to US$3,15 million in Q3 of 2025.”
This shift, Zida noted, reflects “the predominance of foreign-driven projects during the period, reaffirming sustained international confidence in Zimbabwe’s investment framework and the agency’s effectiveness in mobilising cross-border capital into strategic sectors.”
However, this overwhelming reliance on foreign capital, while boosting headline figures, concentrates economic influence externally and could expose project pipelines to global financial volatility.
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Economists suggest the trend indicates that domestic businesses are facing severe capital constraints, hampering their ability to partner in or launch large-scale projects.
“It means locals have no confidence in the economy and that they also don’t have cash, they don’t have funds to invest,” economist Trust Chikohora said, offering a blunt assessment of the local climate.
“Liquidity is very tight in the economy and businesses, companies, individuals are struggling to just survive, let alone have funds for investment. It is quite a tight liquidity situation, so it shows the environment is not really conducive for investment.”
He warned that persistently low local investment discourages foreign direct investment, except in the most sought-after resources.
Economist Stevenson Dhlamini stated that when local businesses lack the confidence to invest, it signals to foreign investors that the market is unstable.
“The local entrepreneur’s hesitancy, born from the fear of future re-denomination or unforeseen fiscal changes, is a constructive challenge to the government to formalise and guarantee long-term asset value protection,” he said.
“A robust economy requires a two-pronged approach where resilient domestic capital complements foreign direct investment.”
To ensure growth is broad-based and inclusive, Dhlamini said policies must prioritise investments that maximise the local economic multiplier.
“This means actively encouraging domestic participation where profits are more likely to circulate through local supply chains, supporting smaller and medium-sized enterprises,” he noted.
