Online Reporter
Nelson Gahadza
COMPANIES are lobbying the authorities to review conditions of doing business to enhance operational viability, which captains of industry and commerce say is being weighed down by several macroeconomic challenges.
This comes after President Mnangagwa recently directed statutory bodies to revisit all areas that potentially hinder the growth of businesses to improve the ease of doing business by reducing operational costs.
In his address at the First Meeting of the 2025 Cabinet Year, the President said fees, licences and permits should be designed to promote economic growth, instead of being restrictive.
The major challenges weighing on business include multiple taxes, exchange rate disparities, restrictive regulations, growing informality and the high cost of and limited power supply.
In their recent financial statements, many listed companies exhibited cautious optimism about better economic performance this year, with many of them focusing on containing costs to sustain operations.
The Government is working on various interventions to address challenges afflicting businesses, including initiatives under the Zimbabwe Industrial Reconstruction and Growth Plan 2024-2025, which seeks to improve the ease of doing business and competitiveness.
The strategy acknowledges that industry faces high regulatory and utility costs, negatively impacting manufacturing.
To address the issues, the Ministry of Industry and Commerce, through the National Competitiveness Commission (NCC), is carrying out regulatory impact assessments to review regulations that hinder competitiveness.
High-cost drivers and compliance challenges vary across sectors.
Earlier this year, the Zimbabwe National Chamber of Commerce (ZNCC) expressed optimism regarding medium- to long-term macroeconomic stability and positive business prospects in 2025. The organisation said it continued to push for the reduction of electricity tariffs, which it says have become a major cost burden for businesses across sectors.
In addition, ZNCC has called for a comprehensive review of the intermediated money transfer tax, arguing that the current rate is excessive and hinders business transactions.
It has also advocated a downward review of corporate taxes to enhance business competitiveness, encourage investment and establish a market-determined exchange rate regime.
“The measures are crucial for alleviating the financial pressures faced by businesses and fostering a more conducive environment for economic growth and development,” said ZNCC president Mr Tapiwa Karoro.
ZNCC also stressed the necessity for improved border management to combat smuggling and illicit cross-border trading.
It said this required investing in advanced technological solutions and augmenting resources for customs enforcement to enhance the efficiency of border operations while intensifying measures to detect and intercept counterfeit goods, particularly those requiring import licences.
The Confederation of Zimbabwe Retailers (CZR) has called for urgent interventions to address challenges negatively affecting the country’s key economic sectors, including retail, which it said is in a critical state.
CZR said the retail sector was battling several economic pressures, threatening its survival.
Despite the challenges, CZR said the sector remained a key part of Zimbabwe’s economy, ensuring food security, employment and revenue collection.
However, Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu said the challenges in the country’s retail sector were not confined or entirely related to a difficult economic environment but to issues linked to some of the formal traders’ management systems and questionable decision-making.
During the presentation of the 2025 Monetary Policy Statement, Dr Mushayavanhu extended a targeted trade facility to the retail sector to assist with working capital. He said the facility, previously set aside for productive sectors, can now also be used to buy foreign currency on the interbank market.
Making a presentation on the state of affairs in the sector to the Tripartite Negotiating Forum Economic Cluster, CZR president Dr Denford Mutashu, in a statement read on his behalf by the lobby group’s acting CEO, Mr Innocent Marimo, recently said exchange rate distortions, rising informality, multiple taxes and restrictive policies had created an environment where compliance had become more difficult at a time informal businesses are gaining ground.
“If urgent interventions are not implemented, we risk a complete collapse of the formal retail sector, leading to mass job losses, declining tax revenues and further economic instability,” he said.
Dr Mutashu said shop closures were growing at a disturbing rate, with major supermarket chains and wholesalers either scaling down operations or shutting down completely due to an unsustainable business environment.
“The high cost of compliance, excessive taxation, volatile exchange rates and an influx of unregulated informal competitors have left the formal retail sector struggling to remain viable.”
Financial economist Mr Malone Gwadu said cost containment, innovation and adaptability to current market and economic realities remained critical cornerstones for any company’s resilience and medium- to long-term growth and sustainability.
“Traditional business models may not be watertight enough to withstand modern-day market trends of cutthroat competition. Revenue-enhancing strategies such as diversifying and backward integration to capture previous costs as revenue are also another survival strategy for companies to look into,” he said.
He said banks were now opening microfinance units to capture another niche market, and some companies, like Padenga, are diversifying from the export of crocodile skin to gold mining.
“This has worked very well and defended their headline incomes. These are but a few examples of the need for market agility and adaptability, which the market requires,” said Mr Gwadu.
Optimism
Despite the challenges, several listed companies expect recovery of economic performance this year on account of measures to entrench macroeconomic stability and improved agricultural and mining performance.
Amalgamated Regional Trading Holdings (ART) said it remained confident that the ongoing restructuring efforts will strengthen the group and increase agility in taking advantage of opportunities identified in all its business units.
“The drive to contain costs will be maintained and emerging new technologies will be embraced across the units to ensure our product offering and services continue to meet the needs of our customers,” Dr Thomas Utete Wushe, the group’s chairperson, said in a statement of the financials.
ART manufactures and distributes products in three key categories: paper, stationery and batteries.
National Tyre Services (NTS) believes Government efforts and strategic initiatives towards Vision 2030 will drive activity across key sectors of the economy, which would benefit the company.
“In the meantime, we hope that the country’s power utility will continue to prioritise the availability of power to industry,” it said.
NTS said the availability of electricity would minimise factory operating costs.
“The company said it has a huge customer base and is establishing a model of improved competitiveness to offer satisfactory service through stock availability across all our branches.”
Dairibord Holdings said it will continue with its growth agenda this year, focusing on enhancing processing capacity through capital investments to expand market reach and grow sales. Dairibord, Zimbabwe’s largest milk processor, has been investing in capacity enhancement to support its growth ambition under a US$24 million capital expenditure programme.
“Commitment to innovation, dedicating significant resources to research and development, with the objective of growing a robust and diversified product portfolio, will be a key focus,” group chief executive Mrs Mercy Ndoro said in emailed responses to questions.
Brick manufacturer Willdale said the boom in the construction industry was expected to persist into the coming year, providing opportunities for volume growth.
“Our strong brand and consistent focus on quality products should give us a competitive edge.
‘‘We expect to raise the required funding for upgrading the production plant from the various initiatives that are already in motion,” the company said.
It said suitable strategies had been adopted to remain profitable in the face of competition and a shifting business model.
Business analyst Mr Kudakwashe Mundowozi said for companies to avoid declines in turnover and profitability, they should implement several strategies that include diversification.
“Cost management is another critical strategy; hence, companies should implement cost-cutting measures by optimising supply chains and reducing operational costs.
“Implementing stringent cost control measures and improving operational efficiencies can help maintain profitability, and local sourcing is also beneficial,” he said.
Mr Mundowozi said by investing in digital technologies, companies can improve
operational efficiency and customer engagement.
