Mishma Chakanyuka, Staff Writer 
FBC Securities has called on policymakers and businesses to foster an environment conducive to long-term financial instruments such as infrastructure bonds, corporate bonds, and public-private partnerships (PPPs), to mobilise long-term capital and address structural financial challenges.
In its 2025 Outlook report, FBC warned that the reliance on short-term funding for long-term obligations is a significant factor in the financial distress plaguing many Zimbabwean companies.
“Zimbabwe’s financial sector struggles to provide long-term credit facilities due to macroeconomic instability, unpredictable currency dynamics, and a history of high inflation,” the firm said. “Consequently, companies rely heavily on short-term borrowing to fund long-term capital projects, creating a liquidity mismatch.”
The firm also criticised the prevailing contractionary monetary policy, which, while aimed at combating inflation, has kept interest rates prohibitively high.
This makes short-term loans expensive and burdensome for companies waiting for returns on long-term investments.
FBC pointed to the recent placement of Beta Holdings, Khaya Cement Zimbabwe, and Metro Peech & Browne Wholesalers under corporate rescue as evidence of worsening corporate financial instability.
“These companies, despite operating in key economic sectors, have encountered severe financial distress primarily due to structural weaknesses in Zimbabwe’s financial markets,” the firm noted.
FBC emphasised that these are not isolated incidents, stating, “Many other companies in Zimbabwe, across various sectors, are likely facing similar operational and financial challenges.”
The firm warned that job losses, widening economic inequalities, and increased brain drain are jeopardising Zimbabwe’s appeal as a destination for foreign investment.
To address these issues, FBC urged policymakers to ensure consistent and predictable monetary policies to attract long-term investment, incentivise pension funds and insurance firms to allocate more resources to corporate investments, and encourage businesses to outsource non-core operations such as logistics and IT.
“Without these interventions, Zimbabwe risks a wave of corporate failures, further weakening the economy,” FBC cautioned.
Regarding stock markets, FBC observed that the Zimbabwe Stock Exchange is currently driven more by inflationary trends and speculative activity than by fundamental growth. However, policy stability and improved foreign currency liquidity could sustain market gains in 2025.
FBC also highlighted the growth potential of the Victoria Falls Stock Exchange, contingent upon stabilised macroeconomic conditions and improved international investment inflows.
“Policies that boost profit margins and cashflows for formal businesses will increase investable funds directly available to those firms and indirectly to pension funds,” the report concluded.
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