US State Department: Zimbabwe 2026 Fiscal Transparency Report Finds Gaps

• Zimbabwe publicly released core budget documents and revised estimates, showing some commitment to basic fiscal transparency.
• Significant gaps exist in the transparency of state-owned enterprise debt, with total holdings not published, and off-budget accounts lacking audit or oversight.
• The government does not consistently follow its own criteria for natural resource extraction contracts, and basic information on mining concessions is not publicly available.
• While the supreme audit institution is independent, parliamentary oversight is incomplete, excluding the intelligence budget.
• These transparency issues pose risks for investors, particularly in the SOE and natural resource sectors, due to potential undisclosed liabilities.

The identified deficiencies, particularly concerning state-owned enterprise debt, off-budget accounts, and natural resource extraction contracts, present considerable risks for entities considering investments, mergers and acquisitions, or navigating compliance in Zimbabwe.

The recent 2026 Fiscal Transparency Report on Zimbabwe, issued by the U.S. State Department, highlights a mixed landscape regarding the nation's financial openness. On one hand, the Zimbabwean government demonstrated a commitment to basic budgetary transparency by making its executive budget proposal, enacted budget, and end-of-year report accessible online within a reasonable timeframe. Furthermore, when actual revenues and expenditures deviated from the enacted budget, the government publicly issued revised estimates, indicating some responsiveness to fiscal realities.

However, the report also identifies significant shortcomings in the comprehensiveness of Zimbabwe's fiscal reporting. Publicly available budget documents did not offer a substantially complete overview of the government's total revenues and expenditures. While information on some debt obligations, including government guarantees for major state-owned enterprise (SOE) debt, was made public, the total debt holdings of these major SOEs remained undisclosed. This lack of full disclosure creates a significant blind spot in understanding the nation's overall financial liabilities.

Further complicating the picture, the government maintained a number of substantial off-budget accounts that were not subjected to independent audit or oversight. This practice raises concerns about accountability and the potential for opaque financial dealings outside standard budgetary controls. Additionally, while the budget did include aggregate allocations to state-owned enterprises, it notably omitted any information regarding the earnings generated by these entities, preventing a full assessment of their financial performance and contribution to the national fiscus.

A critical area where the Zimbabwe fiscal transparency assessment reveals significant deficiencies is in the management and oversight of natural resource extraction and state-owned enterprises. Despite having legal or regulatory frameworks that specify criteria and procedures for awarding natural resource extraction contracts or licenses, the government did not appear to adhere to these established practices in reality. This discrepancy between law and practice undermines confidence in the fairness and transparency of resource allocation.

Specifically concerning the mining sector, the report notes a complete lack of public availability for basic information related to mining concessions. This absence of Zimbabwe mining concessions transparency stands in stark contrast to the government's practice of publishing information on public procurement contracts, suggesting a selective approach to disclosure. The opacity surrounding natural resource contracts and mining concessions is particularly concerning given the sector's economic importance and potential for revenue generation.

The issues surrounding Zimbabwe SOE debt transparency are also pronounced. While the government disclosed its guarantees for major SOE debt, it failed to publish the total debt holdings of these enterprises. This partial disclosure makes it difficult for stakeholders to gauge the true financial health and contingent liabilities associated with the state-owned sector, which can have significant implications for the national economy and public finances.

The report also sheds light on the varying degrees of oversight applied to different government functions. While the military budget was subject to parliamentary oversight, the intelligence budget was not, creating an area of government spending that operates without direct legislative scrutiny. This selective application of oversight mechanisms can lead to imbalances in accountability across different state institutions.

Despite these challenges, the supreme audit institution in Zimbabwe was found to meet international standards of independence, and its reports contained substantive findings. This indicates that an independent body exists with the capacity to identify and report on fiscal irregularities. However, the effectiveness of such findings is limited when, as the report indicates, the government does not consistently follow its own specified criteria and procedures in critical areas like natural resource extraction contracts.

The identified deficiencies, particularly concerning state-owned enterprise debt, off-budget accounts, and natural resource extraction contracts, present considerable risks for entities considering investments, mergers and acquisitions, or navigating compliance in Zimbabwe. The lack of comprehensive data and the practical non-adherence to established legal frameworks create an environment of uncertainty and potential for undisclosed liabilities, necessitating enhanced due diligence and robust contractual protections for any engagement within these sectors.

This report identifies significant gaps in Zimbabwe's fiscal transparency, particularly concerning state-owned enterprise debt, off-budget accounts, and natural resource extraction contracts. Lawyers advising clients on investments, M&A, or compliance in Zimbabwe, especially in the mining or SOE sectors, should note these identified risks and recommend enhanced due diligence and robust contractual protections to mitigate exposure to undisclosed liabilities or non-transparent dealings.

Source: Original reporting via the United States Department of State.