By a Correspondent
Zimbabwe has emerged as Africa’s best-performing stock market after the Zimbabwe Stock Exchange (ZSE) overtook Nigeria’s equities market, with gains being driven by easing inflation, greater currency stability and renewed investor appetite.
The ZSE delivered a 68.5% return in US dollar terms year-to-date as of July 31, 2026, the highest among 17 African exchanges tracked by African Markets, according to a report by a Nigerian news outlet, BusinessDay. Nigeria followed with a 66.9% return, while Ghana recorded 57.6%.
The turnaround marks a significant shift in the continent’s equity market rankings, with Nigeria having dominated performance for much of the year before Zimbabwe moved into first place during the final week of July.
In local currency terms, Zimbabwe’s All Share Index had gained 72.3% year-to-date by the end of July, while the index reached a two-year high of 480.8 points.
Trading activity has also picked up. On July 31, 2.29 million shares changed hands in 92 deals worth ZWG9.38 million, with volumes rising 390% from the previous session, turnover increasing 446% and the number of deals climbing 39%.
The performance comes against the backdrop of a sharp slowdown in inflation. Annual inflation fell to 3.2% in July, its third consecutive monthly decline and the lowest level since June 2018. This compares with inflation of 95.8% a year earlier.
The introduction of the Zimbabwe Gold (ZiG) currency in 2024 has also helped reduce some of the extreme exchange-rate volatility that previously battered investor confidence. In June, the Reserve Bank of Zimbabwe cut its benchmark lending rate by 500 basis points to 30%, citing easing inflationary pressures and improving global conditions.
The improved macroeconomic environment appears to be encouraging investors to return to equities, particularly companies with strong earnings and exposure to foreign currency revenues.
Foreign participation on the ZSE increased to 26.5% in the second quarter from 15.4% in the previous quarter, while the value of foreign trades surged 153.9% to ZiG743.6 million, equivalent to about US$27.7 million, according to figures cited by BusinessDay.
Zimbabwe’s capital markets have also benefited from efforts to make it easier for companies to move between the ZSE and the US dollar-denominated Victoria Falls Stock Exchange (VFEX).
The VFEX has increasingly attracted companies and investors seeking protection from local currency risk, with its dollar-based structure offering a natural hedge against exchange-rate volatility.
FBC Securities said demand for dollar-denominated assets, continued foreign currency inflows from export sectors and the potential migration of more companies from the ZSE could sustain the momentum on the VFEX.
The rally is also being supported by Zimbabwe’s key export sectors. High gold prices have boosted expectations for mining companies, while the tobacco marketing season continues to inject foreign currency liquidity into the economy.
The latest stock market gains therefore represent a potentially important shift for Zimbabwe, where equities have historically been used largely as a hedge against hyperinflation and currency depreciation.
The market, however, remains relatively small and carries significant risks. Zimbabwe has just over 60 listed companies and an equity market capitalisation of about US$4.1 billion, while liquidity remains thin. The durability of the rally will also depend heavily on whether authorities can maintain monetary and fiscal discipline and preserve confidence in the ZiG.
For now, Zimbabwe’s rise to the top of Africa’s stock market rankings is providing a striking vote of confidence in the country’s capital markets, even as investors continue to weigh the sustainability of the economic stabilisation against the structural risks that have historically undermined the market.
