Business Reporter
In an era of heightening global fragmentation and domestic structural hurdles, business leaders in Zimbabwe face a critical question: Is your strategy ready to play locally and scale beyond Zimbabwe, or will it collapse under the weight of regional and global risks?
Addressing delegates during her presentation, Ms Chiedza Madzima, head of operational risk at BMI International (a Fitch Solutions company), outlined a comprehensive, data-driven assessment of Zimbabwe’s competitiveness.
Set against the backdrop of changing US trade policy, severe climate vulnerabilities, operational headwind risks and the unstoppable rise of artificial intelligence (AI), Ms Madzima provided a sobering yet actionable roadmap for corporate survival and regional expansion.
While global markets braced for sweeping US tariff shocks, African markets have largely been shielded by product exemptions and preferential trade mechanisms such as the African Growth and Opportunity Act (AGOA). Directly, Zimbabwe’s exposure to US tariffs remains minimal—accounting for under 4 percent in direct tariff impact and roughly 0.5 percent of total direct exports.
However, Ms Madzima warned that the true danger lies in second-order, indirect risks.
Zimbabwe’s largest trading partners—China, South Africa and the UAE—absorb over 80 percent of the country’s exports. As US trade friction squeezes these trading giants (with Chinese exports to the US dropping 20 percent and South African exports down 42 percent), the resulting economic slowdowns in those key markets may inevitably filter back into Zimbabwe.
‘The main risk for Zimbabwe is really the risk of weaker demand that may come from South Africa, China and the UAE,’ Ms Madzima noted, highlighting that local exporters cannot rely on primary trade stability alone.
Examining the domestic picture, Zimbabwe’s manufacturing export base remains stubbornly narrow. Across most manufactured categories over the past decade, export performance has stagnated or contracted, with only minor gains in transport equipment and processed goods.
This stagnation stems from an unusual structural friction: the high domestic availability of US dollars. Because businesses can access hard currency inside the country, the immediate urgency to aggressively seek foreign revenue through cross-border trade is weakened. Coupled with power supply challenges and climate pressures affecting inputs like cotton, local producers are increasingly disincentivised from expanding outwards.
Evaluating Zimbabwe’s business operating environment across 12 regional markets, BMI’s Operational Risk Index—which benchmarks over 90 inputs across 200 global markets—reveals stark trade-offs. Ms Madzima emphasised that unlike regional peers such as Ethiopia, Mozambique or Nigeria, Zimbabwe offers relative domestic stability and security—a vital asset for attracting foreign direct investment (FDI). While tax incentives offered by agencies such as the Zimbabwe Investment and Development Agency (ZIDA) have spurred over US$1.6 billion in approved projects (mainly in mining), tax relief alone cannot fix underlying structural frictions. Swift, targeted labour reforms—similar to special economic zone (SEZ) models implemented in Vietnam and China—are urgently needed to ease hiring complexities and unlock operational efficiency.
Beyond policy, climate remains the ultimate operational disruptor. While 2025 and 2026 brought encouraging agricultural recoveries, the horizon towards 2027 carries a high risk of El Niño-induced droughts. Combined with rising input costs for fuel, diesel and fertiliser, a regional drought will not only slash crop yields but also restrict hydropower generation across Southern Africa. Because neighbouring nations (such as Malawi, Lesotho and Eswatini) will simultaneously face food shortages, Zimbabwe’s ability to import grain from traditional regional suppliers will be severely restricted.
To counter this, Ms Madzima pointed to solar power as the clearest long-term alternative. Non-hydro renewables are projected to reach 1.5 GW by 2035, heavily propelled by private-sector distributed systems and mini-grids scaling faster than large-scale state projects.
Megatrends: AI and the Process Layer Revolution
Looking beyond immediate economic shocks, long-term corporate survival hinges on adapting to global megatrends: geopolitics, climate adaptation and rapid technological advancement.
On artificial intelligence (AI), Ms Madzima urged leaders to rethink human capital, noting that AI is a productivity tool, not just a labour substitute. She said early disruption will target digital and repetitive tasks (graphic design, basic coding, bookkeeping, customer service), while leaving complex judgement and physical trades intact longer.
Ms Madzima also noted that automated plants can now scale production without scaling headcount. The first real disruption to the workforce could be the loss of entry-level career starts for younger and migrant workers. Real competitive advantage will not go to firms that simply slap AI tools onto old ways of doing things; it will belong to firms that completely redesign their business processes around technology.
‘Technology is like salt. It’s not very interesting on its own, but when you add it to something, it can be truly transformative,’ Ms Madzima stated.
To translate risk insights into strategic action, Ms Madzima concluded her presentation by challenging executives to stress-test their business plans against five core questions.
Which external or internal shock (fuel spike, foreign currency freeze, interest rates, demand drop) hits your profit margins first?
Which assumptions in your strategic plan are you quietly hoping no one ever stress-tests?
Which critical input, market or supply route in your business plan currently has no Plan B?
If regional demand were to surge suddenly tomorrow, what structural bottleneck would prevent you from scaling beyond Zimbabwe?
What capabilities are you building today to compete through AI and navigate the shifting labour transition?
Building resilience is not about predicting every market turn—it is about preparing for the impact. As Ms Madzima noted, building resilience well before the shock hits is always vastly cheaper than trying to survive the damage afterwards.
