Published: 20 October 2025

Assets in Zimbabwe's pensions sector grew by 6 percent to US$2,63 billion in the first half of 2025, driven by new investments and fair value gains. However, the Insurance and Pensions Commission (IPEC) has expressed concern over continued underinvestment in prescribed assets, which remain well below the statutory 20 percent minimum.

According to IPEC's half-year report, the value of prescribed assets fell 2 percent to US$274 million, representing just 10,4 percent of total holdings. Prescribed assets, including approved infrastructure, housing, and productive-sector instruments, are intended to channel pension funds into national development projects.

"The current compliance rate undermines the sector's ability to contribute meaningfully to national development objectives under the National Development Strategy 1 (NDS1)," the regulator warned.

While 11 new prescribed asset instruments were approved in the first half of the year - including AFC Agrobills (US$33,6 million), Old Mutual Life Assurance Real Estate Investment Trust (US$109,3 million), EmpowerBank Housing Bills (US$14,4 million), and the Gutu Solar Project (US$3,77 million) - uptake has been low. Pension funds remain heavily concentrated in investment properties and equities, citing liquidity challenges, long maturities, and perceived risk around some government-backed instruments.

As of June 2025, investment properties accounted for 44 percent of total assets (US$1,16 billion), quoted equities 17,5 percent (US$460 million), and unquoted equities US$108 million. Prescribed assets, by contrast, fell to just 10,4 percent of total holdings.

Financial analysts noted that the underinvestment reflects risk aversion among fund managers. "Prescribed assets such as housing bills, agrobills, and solar projects can be structured more attractively to restore confidence," said Malcolm Mukaro, a financial markets analyst.

IPEC urged pension funds to align with the 20 percent prescribed asset requirement and hinted at stronger enforcement measures for non-compliance. The commission also encouraged administrators to explore green investments and public-private partnerships that qualify for prescribed asset status.

"Allocating a meaningful share to prescribed assets creates jobs, builds infrastructure, and supports financial stability," said economist Gladys Shumbambiri-Mutsopotsi. Experts also highlighted the importance of modernising reporting systems to improve transparency and compliance.

IPEC noted that the sector's growth was supported by stability in the Zimbabwe Gold (ZiG) currency and steady macroeconomic conditions, urging pension funds to leverage this environment to rebalance portfolios toward development-oriented investments.
- Sunday Mail

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