Zimbabwe's stock exchange: From feast to famine


Once revered for attracting big multinational corporations, coupled with the country’s rising middle class and strong agriculture, Zimbabwe Stock Exchange (ZSE) was poised for greatness when it listed in 1993, but no more.

Over the years, the ZSE has seen a cumulative decline as policy inconsistency and controversial indigenisation laws have pushed even resilient investors out of the once breadbasket of Africa.

According to media reports, the Zimbabwe Stock Exchange lost more than 1.7 billion US dollars in value for the 12 months period ending 31 August 2015.


“The bourse’s market capitalisation stood at 5.2 billion US dollars in August 2014 but has been in free fall since then and is now valued at 3.5 billion US dollars, a 32.69 percent decline,” reported Fin24. 

The continued decline in disposable incomes has been attributed as the main driver of large cap companies exiting the stock market and the country.

The Southern African country has seen a sharp decline over the past three decades as President Robert Mugabe implemented racialised laws and disrespected private property.

The Harare administration has been backtracking lately due to rising fears of resurgence of the 2008 crisis levels.

One of Mugabe’s two deputies, Emmerson Mnangagwa, last July said government was working on a massive reform process including social and legislative frameworks to bring Zimbabwe back to the table of nations.

Leading economist, John Robertson says, beyond the figures seen at the once envied stock market, are cumulative bad decisions that have been made by the country’s leadership.

“At the core of Zimbabwe’s economic malaise is the controversial and disastrous land reform programme, rising costs of production and the indigenisation policies driving away investors,” said Robertson.

“Zimbabwe should also have reduced the wage bill costs as the country does not have the leverage of devaluation of the US dollar,” he added.

The country’s Finance Minister Patrick Chinamasa conceded that the wage bill was too bloated with largely ghost workers. Opposition parties accuse Mugabe’s Zanu-PF of ghost workers saying most of the people on the wage bill are controversial National Youth Service militias. 

He says the country has seen rising labour costs which has negatively effected it.

“Due to rising production and labour costs, the country has seen no more production as companies now import goods they used to produce, the factories are now warehouses. We have become a nation of buyers and sellers and we have turned consumers into dependents of people working in the diaspora.”