The Long Road Back: Zimbabwe's Bond Market From 1980 to a First Rating

Zimbabwe has had a functioning bond market before. It is worth starting there, because most conversations about the country's capital markets begin from the assumption that formal fixed income trading is something Zimbabwe is building for the first time. It is not. It is something Zimbabwe is rebuilding, and the difference matters for how much patience the rebuilding deserves.

In the first two decades after independence, government paper and a small number of corporate issues traded through what was, by regional standards, a credible market. The Reserve Bank issued Treasury Bills to fund government spending, banks held them as part of ordinary liquidity management, and a handful of parastatals and corporates raised term debt through the Zimbabwe Stock Exchange's fixed income board. None of this made Zimbabwe a deep bond market in the way South Africa's had already become. But it was a real one, with real pricing, real settlement, and real investors making real decisions about duration and credit.

That market did not survive the 2000s. As fiscal deficits widened through land reform, and later through military intervention in the Democratic Republic of Congo, government financing needs outran what conventional bond issuance could support. The Reserve Bank turned to direct monetary financing, and the result, by the end of the decade, was hyperinflation of a severity that has few peers in modern economic history. A bond is a promise to be repaid in a currency at a future date. When the currency's value cannot be forecast from one afternoon to the next, that promise stops meaning anything, and the market for it simply stops existing. By the time Zimbabwe adopted the United States dollar as its functional currency in 2009, there was no bond market left to speak of. There was no local currency left to denominate one in.

Dollarisation stabilised prices, but it did not automatically rebuild a fixed income market. Building one required a currency investors would hold for more than a few months, issuers willing to price debt transparently, and a regulatory framework that could enforce disclosure and settlement discipline. None of that existed on day one, and it took most of the following decade to begin assembling it.

The first genuine attempt at a corporate bond revival came in 2017, and it is worth being precise about how small it was. GetBucks Zimbabwe listed a medium term note on the Zimbabwe Stock Exchange that year, one of the first corporate debt instruments to trade in the post dollarisation era. The Infrastructure Development Bank of Zimbabwe followed with its own bond programme, using capital markets rather than bank balance sheets to fund infrastructure lending, which is precisely the role a development finance institution should be playing in a market still short of long term capital. A few years later, UNTU Capital brought a medium term note to market under its U Gain programme, notable not just as the third fixed income instrument to list in this period but as Zimbabwe's first bond issuance built around mobile based subscription, a genuinely local innovation in how retail investors could access fixed income.

Three issuers in the better part of a decade is not a pipeline. It is a proof of concept. Each of these deals mattered because it demonstrated that a corporate could price, document, and settle a bond in Zimbabwe's post dollarisation environment. What none of them did, individually or together, was create the thing a bond market actually needs to function, which is enough regular issuance that investors can build a diversified fixed income book without concentrating risk in one or two names.

The more consequential activity through most of this period was happening in government paper, not corporate debt, and it was happening in the secondary market rather than at issuance. Treasury Bills have remained the dominant fixed income instrument in the Zimbabwean market by a wide margin, and the past year has been a case study in why secondary market infrastructure matters as much as primary issuance. Government settlement of matured Treasury Bills has, at points, lagged what the market expected, and the last budget statement set out a rollover framework for Legacy Treasury Bills, extending maturities by four to seven years depending on original maturity date and adjusting coupons on some instruments toward zero, as part of a broader liability management effort tied to government cashflow planning. That is not unusual practice for a government managing a debt stock built up over a difficult period. What is more interesting is what has happened around it. Secondary market activity in Treasury Bills has picked up rather than dried up, and in August this year the Securities and Exchange Commission of Zimbabwe issued a directive requiring regulated entities to comply with a standardised transaction registry and coding framework for secondary market trades, with FINSEC authorised to record these transactions formally. A market that is being asked to register and code its trading activity more rigorously is a market regulators expect to keep growing, not one they expect to wind down.

This sits inside a wider stabilisation picture that has been building through the year. Zimbabwe's economy grew 8.3 percent in 2025 and is projected to grow around 5 percent in 2026, a more moderate but still solid pace. Inflation, which has been the single biggest obstacle to rebuilding investor confidence in local currency instruments, fell to 2.9 percent by August. The IMF reached a staff level agreement with Zimbabwe in September on the second review of the Staff Monitored Programme it entered into earlier in the year, with the Fund noting that nearly all quantitative targets had been met and singling out strong revenue collection and continued exchange rate stabilisation efforts, including work on an electronic foreign exchange trading platform to improve transparency. None of this is a bond market story on its own. Together with the SECZIM directive, it describes the kind of macro and institutional groundwork that has to be in place before a bond market can be more than a handful of issuers taking turns.

Which brings us to the question the market has started asking more directly since the SECZIM directive landed: what would it actually take for Zimbabwe to achieve its first international credit rating. It is worth correcting a premise that comes up often in this conversation. Zimbabwe has never held a solicited rating from Fitch, Moody's, or S&P, at any point in its history, including before the hyperinflation years. It is one of roughly two dozen African economies that has never gone through the process. So the question is not how Zimbabwe gets rated again. It is what a first rating, ever, would require.

Credit rating agencies build sovereign assessments around a common set of pillars: fiscal and debt sustainability, external position and reserve adequacy, institutional and governance quality, and growth track record. Zimbabwe's improvement on several of these fronts over the past two years is real and worth stating plainly. Growth has been strong, inflation has come down from levels that made any credible fiscal or monetary analysis nearly impossible, and the Staff Monitored Programme with the IMF is, among other things, a mechanism for building exactly the kind of policy track record that rating agencies weight heavily. Zimbabwe's removal from the World Bank's list of Fragile and Conflict Affected Situations, effective July 2026, is a meaningful independent signal in the same direction, since that classification reflects an external institution's own assessment of governance and institutional stability, not simply a public relations decision.

The unresolved piece is external arrears. Zimbabwe's arrears to bilateral and multilateral creditors remain the central obstacle standing between the country and a normalised relationship with international capital markets, and resolving them is explicitly described by both the IMF and Zimbabwean authorities as central to the renewed engagement agenda. Arrears clearance is not a technical formality. It is the precondition that unlocks the kind of engagement with the Paris Club, the World Bank, and the African Development Bank that would eventually make a solicited rating a realistic and useful exercise rather than a symbolic one. The SMP itself is best understood as the bridge to that conversation rather than the destination. Continued strong performance under the programme is what the IMF and Zimbabwe's own authorities have both pointed to as the basis for the arrears discussions that would need to follow.

None of this happens on a fixed timeline, and it would be a disservice to investors to suggest otherwise. But the sequence is now reasonably clear. Sustained SMP performance supports the arrears clearance dialogue. Progress on arrears clearance is what opens the door to renewed engagement with bilateral and multilateral creditors on more conventional terms. And a normalised creditor relationship, alongside continued macro stabilisation, is what would eventually make a first solicited credit rating both possible and genuinely informative for international investors assessing Zimbabwean risk for the first time.

A rating, when it eventually comes, will tell international investors something about Zimbabwe's government debt. It will not, by itself, tell them much about the country's corporate bond market, which is a separate and in some ways more immediate priority. The 2017 to 2019 issuances proved corporate debt could be structured and settled here. What has been missing since is regularity. A market with three notable corporate issuers across the better part of a decade cannot offer investors the diversification, liquidity, or benchmark pricing that a functioning corporate bond market provides. Building that requires more issuers willing to come to market, a secondary trading infrastructure robust enough to give those issuers confidence that their paper will trade after issuance rather than sit static on an investor's book, and exactly the kind of transparency the SECZIM directive is now pushing toward.

Zimbabwe's bond market has been rebuilt once already, from a starting point far worse than today's. What is being assembled now, a functioning secondary market for government paper under clearer regulatory oversight, a stabilising macro backdrop, and a defined if unfinished path toward renewed external engagement, is a considerably stronger foundation than the country had in 2009. The test for the next several years is not whether Zimbabwe can attract attention with a single flagship bond issuance. It is whether the institutional groundwork being laid now is followed by enough issuers, enough consistency, and enough patience to turn a proof of concept into an actual market.