leeroy mupariri
Nelson Gahadza
Senior Business Reporter
The current ZiG reserve money stock is covered more than three times (about US$540 million) by the available foreign
reserves in the form of gold, nostro balances and foreign currency cash
Treasury says Zimbabwe’s financial services sector, including banks, capital markets, pensions, and insurance industries, remains safe and sound and capable of withstanding any shocks.
Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube said this in his 2025 National Budget Statement presentation on Thursday.
“The banking sector remains safe and sound and continues to show resilience as reflected by adequate capital levels, satisfactory asset quality metrics, and sustained profitability.
“However, the emergence of new risks, including cyber security and climate-related financial risks, has resulted in the growing need for more agile, efficient, and scalable banking solutions,” he said.
Minister Ncube said the banking sector was working on initiatives to transform their operations through innovative, cost-effective, and customer-centric services and products while leveraging available opportunities to offer affordable housing finance products.
As of September 30, 2024, Minister Ncube said, the banking sector comprised 14 commercial banks, four building societies, and one savings bank.
Zimbabwe presently has 259 credit-only microfinance institutions, eight deposit-taking microfinance institutions, and four development finance institutions.
Minister Ncube said all banking institutions were adequately capitalised with reported capital ratios that are compliant with the prescribed minimum capital adequacy ratio of 12 percent and tier 1 ratio of 8 percent as of 30 June 2024.
“The banking sector’s average capital adequacy ratio and tier 1 ratios were 46,15 percent and 40,13 percent, respectively,” said the Minister.
On reserve money developments, Minister Ncube said that as of November 8, 2024, the ZiG reserve money amounted to ZiG3,4 billion, comprising statutory reserves of ZiG2,8 billion, excess reserves of ZiG308 million, non-negotiable certificates of deposit (NNCDs) of ZiG123 million, and currency in circulation of ZiG158 million.
He added that the current ZiG reserve money stock was covered more than three times by the US$540 million available foreign reserves in the form of gold, nostro balances, and foreign currency cash.
“Similarly, the entire local currency ZiG deposits are also fully covered by the reserves at the current exchange rate,” he said.
In terms of broad money, the Treasury chief said the growth of the month-on-month local currency component of broad money averaged 14 percent from May to September 2024.
He said the growth was envisaged to further decline, reflecting the impact of both tight fiscal and monetary policies.
Minister Ncube also highlighted that the Government continued to support the capitalisation of financial institutions whose main mandate is to promote financial inclusion of the marginalised and underserved segments.
These include the Zimbabwe Women’s Microfinance Bank (ZWMB), Empower Bank, Small and Medium Enterprise Development Corporation (SMEDCO), Women Development Fund, Community Development Fund, and AFC Land and Development Bank.
He said the Government was making progress on financial inclusion, which has provided opportunities for marginalised youths, women, and SMEs to access financial services.
He highlighted those average loans to MSMEs as a percentage of the total banking sector increased from 3,87 percent in September 2023 to 7,55 percent in September 2024.
