FOLLOWING the landslide Zanu-PF victory in the just-ended harmonised elections, the business community says it expects the incoming Government to consolidate the gains achieved so far and further scale up the ease of doing business reforms.
Noting the strides made during the first term of the Second Republic (2018-2023), business leaders say going forward Government needs to prioritise consolidating pro-business policies to buttress the economic growth momentum by ensuring continued exchange rate stability, curtailing consumptive expenditure, revamping the taxation system and accelerate efforts to resolve external debt overhang.
Building on the positive growth trajectory achieved in the last five years, business leaders have noted the solid fundamentals as a critical building block for a strong economic base. They made reference to the improved electricity supply following the recent commissioning of Hwange 7 and 8 expansion project, which injected an additional 600MW to the national grid, as one of the key pillars for business viability.
The Government also succeeded in trimming runaway inflation to restore monetary stability and pricing predictability amid positive gains in key sectors such as mining and agriculture.
In separate interviews yesterday, business experts urged the Government to continue rolling our infrastructure development as this has proved to have a multiplier effect across value chains.
Confederation of Zimbabwe Retailers president Mr Denford Mutashu said: “Some of the key expectations include easing doing business environment, structural reforms, implementation of a business-friendly taxation environment by expanding the taxation base through the accelerated formalisation of unregistered business across sectors”.
He stressed the need to empower ordinary people to improve standards of living and enhance the quality of earnings for the working class both in the public and private sectors. This includes resolving the external debt burden, said Mr Mutashu.
Mr Morris Mpala
Zimbabwe owes more than US$14 billion to multilateral development banks including the African Development Bank, the World Bank, and the European Investment Bank. In December 2022, the Government established a structured dialogue platform (SDP) with all creditors and development partners, to institutionalise structured dialogue on economic and governance reforms to underpin the arrears clearance and debt resolution process.
Lupane State University Business Clinic development manager, Mr George Nhepera, said now that the elections are gone, the focus should be on strengthening the economy.
“It’s time to rebuild the economy including ensuring stability on the exchange rate and pricing of goods and services,” he said.
“The policy measures that have worked before the elections should be maintained going forward. A multiple exchange rate system should remain in force while other policy measures aimed at boosting the economy such as gold coins and digital-backed tokens should be implemented.
“These have the capacity to bring down inflation and introduce alternative liquidity instruments and investments.”
Mr Nhepera said it would be ideal for an economic indaba to be held to come up with an all-encompassing economic blueprint.
Economists further stated that the prevailing stability in the economy must be preserved by all players as it reflects the positive impact of the strategic interventions introduced by the authorities.
Economic analyst Mr Morris Mpala said the Government should continue with its value for money principle on public contractors as well as the partial forex payment system. He, however, said authorities should fine-tune the ease of doing business, ensure price stability, and encourage increased local production.
Last week’s final Cabinet meeting noted that prices of most basic commodities like mealie meal, for instance, had gone down by 27 percent. The positive developments on price movements have been corroborated by the Zimbabwe Statistics Agency (ZimStat) figures, which show that the country’s annual consumer inflation dropped for a second consecutive month to 77,2 percent in August 2023, down from July’s 101,3 percent against the backdrop of a stronger Zimbabwe dollar.
Prof Mthuli Ncube
Early this year, the Treasury said it had saved half a trillion dollars through its “value for money” drive, and will continue to mainstream the strategy in order to plug loopholes in the existing public procurement systems.
The intervention also seeks to deal with unethical behaviour exhibited by various suppliers and contractors who were manipulating the foreign exchange market leading to speculative pricing. The situation also prompted the Government to take drastic measures, including loosening import regulations, allowing 100 percent forex retention on all domestic sales, and mopping up excess liquidity, among others, in order to restore macroeconomic stability.
In his 2024 Budget Strategy Paper, Finance and Economic Development Minister Professor Mthuli Ncube said Zimbabwe is expected to register an average economic growth rate of five percent over the next three years, benefitting from a stable exchange rate and lower inflation rates.
He projected that the economy will expand by 5,2 percent next year and five percent in 2025 and 2026, all above the National Development Strategy 1 (NDS1) annual average targets.
Prof Ncube is also targeting annual inflation rates of 39,2 percent 11,5 and 8,3 in 2024, 2025, and 2026 respectively.
“Furthermore, the implementation of the Cabinet-approved Public Entities Recapitalisation Programme will be given new impetus, given their strategic role as both enablers and providers of essential goods and services to the economy,” he added.
Prof Ncube said the Treasury will also be looking at deepening financial inclusion and enhancing national savings mobilisation, accelerating the implementation of the Zimbabwe Arrears Clearance Debt Relief and Restructuring Strategy to unlock new concessional funding, as well as accelerating the implementation of ease of doing business reforms.