Online Reporter
Business Reporter
THE retail sector is expected to grow by 5,10 percent depending on its ability to navigate the operating environment and adapt to the increasing dominance of informal traders.
Stockbroking and equities research firm, Fincent Securities, in its latest Zimbabwe Retail Sector report, said policymakers and businesses needed to adapt to the prevailing challenges to stimulate growth and improve living standards.
Challenges include high cost of financing, tight liquidity, constrained power supply, numerous taxes and regulatory constraints, most of which the Government is working to resolve.
The Confederation of Zimbabwe Industries (CZI) earlier this year proposed a Presidential directive compelling Government ministries, agencies, departments and regulatory bodies to cut licensing fees and charges to reduce costs burdening businesses by 50 to 70 percent by June 2025.
In February, President Mnangagwa said all ministries and Government departments should ensure businesses did not suffer from prohibitive regulations and punitive administrative licences and fees.
In his address at the first meeting of the 2025 Cabinet Year, the President said instead of being restrictive, fees, licences, permits and regulations should promote economic development.
It is against this background that Finance, Economic Development and Investment Promotion Minister Mthuli Ncube anounced in March that the Government was undertaking a comprehensive review to streamline the country’s tax and regulatory framework.
The objective, he said, was to identify and eliminate unnecessary taxes and regulatory fees that hinder business operations.
Fincent said while businesses had to navigate several economic challenges, prospects for growth in the retail sector were promising.
“Despite challenges, the retail and wholesale trade sector has emerged as a key economic driver, contributing about 18,8 per cent to gross domestic product (GDP), although informal trade is growing rapidly and affecting formal sector performance,” reads part of the report.
Fincent noted that Zimbabwe’s consumer spending outlook for 2025 remains depressed due to limited growth in disposable incomes.
It said essential categories dominate, with food, housing and transport taking precedence over discretionary spending, reflecting strained household incomes.
