President vows to support local businesses, promote economic growth

Farirai Machivenyika and Wallace Ruzvidzo, Herald Reporters

All Ministries should ensure that business does not suffer from prohibitive regulations as well as punitive administrative licences and fees, President Mnangagwa has said.

In his address at the First Meeting of the 2025 Cabinet Year on Tuesday, the President said instead of being restrictive, fees, licences, permits and regulations should promote economic development.

“To enhance the overall performance of our economy, the Ease of Doing Business Agenda continues to be an important aspect of our programming.

“In that regard, concerted efforts must be made to revisit all the areas that hinder the start or growth of all investments, whether local or foreign.

“I commend the entrepreneurial spirit among our people. By nature, Zimbabweans are hardworking,” he said.

Towards that end, Parliament’s Portfolio Committee on Industry and Commerce yesterday convened to discuss the challenges faced by manufacturers and retailers in the formal sectors.

Confederation of Zimbabwe Industries (CZI) chief economist Dr Cornelius Dube, said there is need for legislation requiring Government ministries, departments and agencies to procure a specific percentage of their goods and services from local suppliers to boost the economy.

“Government should come up with legislation or a statutory instrument that compels it to buy a prescribed threshold for its goods and services from local suppliers,” he said.

Dr Dube argued that this measure would enhance competitiveness and boost demand for local products.

Confederation of Zimbabwe Retailers (CZR) president Mr Denford Mutashu highlighted the unfair competition posed by informal traders.

“There are a lot of regulations and cost centres that we are facing as formal traders that those in the informal sectors are not paying.

This makes our prices uncompetitive.”

The closure of formal businesses could negatively impact other sectors, such as banking and finance, due to a decline in deposits, he said.

In her presentation, Ms Rosemary Mpofu-Chikarakara chief executive officer of the Consumer Council of Zimbabwe (CCZ) stressed the importance of addressing exchange rate discrepancies, foreign exchange shortages, and market distortions that encourage arbitrage.

The CCZ also wants smuggling stopped.

“Issues of porous border posts also need to be seriously dealt with and punitive (and) deterrent measures such as jail terms need to be introduced in order to curb these challenges.

“Government and the affected businesses can partner and aggressively invest and deploy advanced monitoring technologies, including drones, CCTV, and automated scanning systems, at all major border posts.

“All imported products should abide by the rules, with no exemptions of who is importing. As long as there are other importers who are exempted from paying duty, loopholes will always be created and these products will then find their way both in the formal and informal market, creating an unfair playing field with the businesses that pay duties,” the CCZ said.

Portfolio Committee chairperson Cde Clemence Chiduwa acknowledged the concerns raised at the meeting.

“We have taken note of the presentations and we will compile a report that we will table in the House for debate,” he said.

The Committee aims to find viable solutions to support the local industry and create a fair competitive environment.

The Government and the Reserve Bank have taken taken steps to formalise the informal sector as part of broader measures outlined in the 2025 Monetary Policy Statement announced last Thursday, aimed at enhancing Government tax revenues and stabilising the economy.

A week earlier, Finance, Economic Development and Investment Promotion Professor Mthuli Ncube announced measures to rein the burgeoning informal sector that was threatening the survival of formal businesses.

The RBZ Monetary Policy emphasises the need for both the informal and formal sectors to align, creating a more cohesive economic environment.

RBZ Governor Dr John Mushayavanhu is advocating for the integration of informal businesses into a system that includes dual currencies, bank accounts, and electronic payments, which is essential for achieving the Government’s economic goals.

Under the new regulations, items on a list of commonly smuggled goods will be presumed smuggled unless merchants can provide valid customs clearance.

This initiative places pressure on businesses to ensure compliance and legitimacy in their operations.

Government will implement a presumptive retail-level VAT that manufacturers must collect when selling to small or informal businesses lacking tax clearance certificates.

This measure restricts wholesalers from engaging with unlicensed entities, further pushing informal businesses towards formalisation.