Zimbabwe is intensifying efforts to unlock sustainable urban development as rapid population growth places increasing pressure on infrastructure financing. Authorities are now pushing for a closer integration between fiscal policy and financial institutions to bridge the growing gap. Like many African economies, Zimbabwe is currently grappling with rapid urbanisation that is outpacing infrastructure delivery, exposing significant weaknesses in how cities are financed and managed.

Minister of Local Government and Public Works, Daniel Garwe, stated that this shift is critical as urbanisation accelerates across the continent, widening the disparity between infrastructure demand and available funding. He noted that the global urban population is projected to reach 5 billion by 2050, up from 3.5 billion in 2015—a trend that is severely straining governments’ ability to provide adequate services.

“Urban financing continues to face challenges such as limited government funding, inadequate foreign direct investment, and high borrowing costs. This calls for a shift towards strategic partnerships between government and financial institutions,” he said.

Minister Garwe explained that constrained fiscal space is limiting the ability of finance ministries to fund urban development through traditional public sector investment programmes, resulting in significant financing gaps. He added that financial institutions often perceive urban infrastructure as high-risk and low-return, a perception that requires deliberate policy intervention. Furthermore, he argued that fragmented approaches, where key stakeholders operate in silos, are undermining long-term financing solutions and excluding vulnerable communities.

To combat these challenges, Zimbabwe is strengthening frameworks that integrate urban priorities into national fiscal systems while creating incentives to attract private capital. Garwe said pension funds are increasingly being channelled into infrastructure through prescribed asset status, unlocking long-term, affordable financing for housing and urban projects. He said financial institutions must also embrace innovative instruments such as green bonds, blended finance and land-based funding models to support scalable development.

“This approach eases pressure on the fiscus while enabling scalable housing delivery,” he said.

The Minister emphasised that risk-sharing mechanisms, inclusive lending models and intermediate financing systems are essential to support smaller municipalities that lack borrowing capacity. He suggested that tools such as municipal bonds and pooled credit facilities can help bridge infrastructure financing gaps, while public-private partnerships remain key in delivering major projects. Examples such as the Geo Pomona Waste Management project and the Helcraw water initiative demonstrate how collaboration between the public and private sectors can unlock investment and improve service delivery.

To strengthen coordination, Garwe said platforms that bring together policymakers, financiers and urban planners are critical in aligning strategies and accelerating implementation. He said data-driven planning is also key, with institutions like the Zimbabwe Investment and Development Agency playing a central role in providing bankable projects to investors.

“This integration is essential to building cities that are inclusive, resilient, and capable of meeting future demands,” he said.