Zimbabwe’s decision to lift its ban on grain imports from South Africa has sent ripples through both agricultural and insurance markets, with insurers reporting increased inquiries for credit risk cover.
While the move opens new trade opportunities and promises to ease local grain shortages, it also raises new financial and risk management questions for both exporters and local producers.
Insurers are already positioning themselves. Brokers in Harare and Johannesburg report growing inquiries from South African exporters about political risk extensions, which cover payment in case of disruptions.
John Steenhuisen, minister of agriculture for South Africa, welcomed the Zimbabwean government’s decision to eliminate the import prohibition on maize and other commodities, which was gazetted under the new Statutory Instrument (SI) 87 of 2025, on October 22.
The minister hailed the action as a return to good economic principles that are vital to the stability and prosperity of Southern Africa.
“This is an extremely welcome development that underscores the collective responsibility we share in ensuring food sufficiency,” Steenhuisen stated in a press release.
“The agricultural sector thrives on predictability and efficiency, and restrictive trade measures, while sometimes intended to protect local producers, too often lead to market distortions that ultimately harm the consumer.”
The announcement could not have come at a better time for South African exporters. The region’s largest agricultural economy has experienced a bumper maize harvest and access to Zimbabwe’s market offers a welcome outlet. Zimbabwe’s local millers, feed manufacturers and food processors, long constrained by supply limitations, are equally enthusiastic about the prospect of a stable and diversified supply chain.
But behind the optimism lies a complex challenge that could reshape market dynamics. That is the payment terms.
South African exporters are in a stronger position because they can afford to sell on credit, offering 30-, 60-, or even 90-day payment terms supported by trade credit insurance. Zimbabwean producers, on the other hand, typically require cash upfront to cover immediate operational costs in a high-inflation environment. That single difference could determine who thrives in the liberalised market.
Head of Short Term Insurance (product innovation and development) at Invent Multiple Agents & Actuaries, Taurai Craig Museka, said the lifting of the ban on grain imports from South Africa is likely to have both positive and negative effects on credit risk exposures for Zimbabwean grain importers and suppliers.
“With the ban lifted, South African grain exporters may be more willing to offer credit terms to Zimbabwean importers, providing them with more flexible payment options and reducing the need for upfront cash payments locally. Zimbabwean millers and other grain consumers may be able to access credit from South African suppliers, reducing their need for working capital financing from our local banks, which can be more expensive because of interest. Supplier credit doesn’t carry interest.”
Museka did not rule out the negative effects, like cross-border credit transactions, which come with inherent risks, including political risk, currency risk and counterparty risk.
“The risk of Zimbabwe scrapping the US dollar and introducing a new currency may increase the credit risk for South African exporters, potentially leading to more stringent credit terms or higher prices. If Zimbabwe introduces a new currency, it may lead to currency fluctuations, making it more challenging for importers to repay their debts in US dollars or other foreign currencies.”
This reality puts local producers at a disadvantage, particularly smaller farmers who have already struggled with input costs, erratic rainfall and constrained access to affordable financing. Some fear that the liberalisation could mirror past experiences, where foreign suppliers undercut domestic producers not by price, but by credit convenience.
Zimbabwe’s policy shift is more than a trade headline to insurers and risk actuaries. It is a signal of growing demand for credit insurance and other trade-risk solutions.
Credit insurance allows exporters to sell goods on credit while protecting themselves from non-payment risk. If a Zimbabwean buyer defaults, the insurer reimburses the exporter, keeping cash flow intact and trade relationships stable. In South Africa, this is a well-developed market. Institutions such as the Export Credit Insurance Corporation (ECIC) and several private underwriters already support exporters across the Southern African Development Community region.
“Credit insurance is what makes it possible for South African exporters to extend payment terms into higher-risk markets like Zimbabwe,” explained Newton Maone, a Harare-based risk underwriter. “Without that cover, no one would take the risk of a three-month delay on payment, especially given Zimbabwe’s currency and liquidity volatility.”
According to Maone, trade credit insurance is not only essential for businesses in the current unstable economic climate, but the appropriate coverage must also be designed to assist the companies in achieving their strategic goals and provide timely assistance when claims arise. The degree to which a company may use trade credit insurance depends largely on its risk tolerance. Both high and low risk tolerance thresholds can be accommodated by including trade credit insurance in a company’s risk management strategy.
Most Zimbabwean grain producers lack access to similar protection. Credit insurance is rarely used locally, partly because of limited market awareness, but also due to high premiums and perceived complexity. Risk analysts said the gap becomes even wider when the buyer is a government agency or parastatal.
Globally, credit insurance often excludes sovereign or public-sector buyers unless specific political risk cover is purchased.
“In Zimbabwe, where government-linked entities remain major grain purchasers, this means local suppliers face extended payment delays or outright defaults, with no safety net,” said Maone.
Museka added that in Zimbabwe, most small and medium-sized enterprises are not aware of credit insurance.
“Credit insurance penetration is still very low in African countries. However, South Africa has a more developed credit insurance market with the highest credit insurance market size by premiums and most companies in South Africa do understand credit insurance. It is key to note that the exporter is usually the one who initiates credit insurance and therefore our local SMEs can benefit from credit insurance without knowing it.”
While there is room for credit insurance demand, the shift also carries macroeconomic implications. Increased imports could ease grain shortages and stabilise prices in the short term, but might dampen incentives for local production.
Economists warn that unless local producers are supported through access to affordable finance and risk cover, Zimbabwe may become increasingly dependent on imports, especially during lean seasons. Moreover, the balance of payments could be strained if foreign suppliers are prioritised, as hard currency outflows rise to settle import payments.
Weighing in, Maone said risk management becomes as critical as market access. “Without strong financial safeguards, a single wave of defaults or delayed payments could reverberate across supply chains and even impact local banking liquidity.”
In March this year, Mutapa Investment Fund CEO John Mangudya announced that the Export Credit Guarantee Corporation of Zimbabwe (ECGC) is set to expand its reach and impact under the management of the Sovereign Wealth Fund. The Mutapa Investment Fund, a government investment vehicle, now oversees ECGC’s operations. Mangudya, who previously served as the Governor of the Reserve Bank of Zimbabwe, said the move is expected to strengthen ECGC’s capacity to support exporters and enhance Zimbabwe’s participation in global trade.
Insurance and Pensions Commission (IPEC) commissioner Grace Muradzikwa highlighted that the ECGC not only provides export credit insurance but also enhances exporters’ confidence in competing on the global stage.
“Through its innovative product offerings, particularly in export credit insurance, ECGC has provided vital support to Zimbabwean exporters, empowering them to trade with confidence on the global stage.”
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