The founder of the Ibrahim Index of African Governance said Zimbabweans needed to "get their act together" if the country headed by 88-year-old Mugabe was to end its political impasse and move forward.
And African leaders should be brutally honest in criticising heads of government who drag their countries down, the Sudan-born telecoms tycoon said.
He was speaking after his foundation announced that for the third time in four years it would not award its Prize for Achievement in African Leadership – the world's biggest individual prize – as no suitable candidates were found.
Ibrahim said: "Zimbabwe should have been a success story. It is a wonderful country with wonderful resources but unfortunately is at a political impasse. That is really a problem.
"We really hope the Zimbabwean people will somehow come together to resolve this impasse and enable the country to move forward.
"It's unfortunate to have this kind of stagnation in the political scene which is affecting the performance of the country.
"The Zimbabwean people are among some of the best-educated Africans and very enterprising. So let's hope that they get their act together and somehow we see Zimbabwe rising again."
A shaky power-sharing government was formed in 2009 following violent polls. Mugabe and Prime Minister Morgan Tsvangirai struck a deal to avoid a tip into a full-fledged conflict.
"The past generation, most African leaders came from freedom-fighting, liberation movements. A good fighter is not necessarily a good governor. It takes different skills to run a country," Ibrahim said.
Zimbabwe ranked 47th out of 52 African countries in the 2012 Ibrahim Index unveiled Monday, with a score of 34 out of 100 – making it the worst-performing country in the otherwise high-ranking Southern Africa.
Ibrahim said there was a "collegiate atmosphere" among African leaders where they do not criticise one another publicly.
"We hope this is changing. We need to have the courage to stand up and say look, this is wrong," he said.
"If you look in a mirror and see an ugly face, maybe you are really ugly. It's not the fault of the mirror. We need to be a little bit more brutal in order to move forward. We need more honesty to say the tough things.
"We should be free to really say the truth wherever it is needed." – Sapa-AFP