CEOs paint bleak economic outlook

LIVINGSTONE MARUFU

Zimbabwe’s economic prospects remain bleak, with leading business executives warning of continued stagnation through to the end of 2025. The forecast, driven by mounting fiscal pressures, a chaotic regulatory framework, chronic policy inconsistency, and entrenched structural deficiencies, paints a sobering picture of the country’s economic trajectory.

According to the latest Business Confidence Index (BCI) released by the CEO Africa Roundtable, corporate sentiment has plunged into deeply negative territory, echoing dire projections from the International Monetary Fund (IMF). The findings reveal that despite the apparent calm ushered in by the introduction of the Zimbabwe Gold (ZiG) currency, fundamental economic challenges remain unaddressed—casting serious doubt on government projections of 6% GDP growth for 2025.

“The first-half BCI index was negative 76, indicating that C-suite executives were overwhelmingly pessimistic about the economy’s performance,” the CEO Africa Roundtable noted. “The second-half BCI, though slightly improved at negative 47, still shows persistent pessimism among both private and public sector CEOs going into the second half of the year.”

The survey canvassed senior executives across strategic sectors—manufacturing, financial services, construction, real estate, and professional services. Notably, 67% of respondents lead mature firms employing more than 65 people. While there was marginal optimism around production volumes and capacity utilisation, sentiment regarding employment growth, investment plans, and export competitiveness remained either flat or negative.

“Overall, sentiment among CEOs and Zimbabwean businesses remains subdued,” the report stated. “The negative outlook aligns with the IMF’s business confidence estimate of -33.8, underlining widespread concern over future production, order books, and the general economic climate.”

Executives and economists alike cite recurring bottlenecks: rampant inflation, punitive taxation, erratic currency policies, and conflicting regulations. These have weighed heavily on firms already weakened by previous economic shocks, with many of the same pressures that triggered mass business closures earlier this year still unresolved.

Further complicating recovery efforts are global supply chain disruptions and geopolitical tensions that continue to batter Zimbabwe’s import-dependent economy. Local products remain uncompetitive due to steep production costs, while domestic markets are inundated with low-cost, substandard imports.

“Ease of doing business remains a serious concern,” the CEO ART report stated. “Power outages and high production costs are driving negative sentiment. But the overriding issue is the fragile macroeconomic environment—especially inflation and volatile exchange rate dynamics. A close second is the unpredictable and often contradictory regulatory framework.”

Veteran economist Tony Hawkins offered a grim long-term prognosis, asserting that without serious institutional reform, the economy will continue to deteriorate.

“The long-term outlook is poor because of the collapse in education, health, and public sector management,” Hawkins said. “Endemic corruption, typical of political dictatorships, continues to erode trust and effectiveness. The financial damage from decades of hyperinflation is still playing out—evident in the country’s ballooning arrears and unsustainable debt burden.”

Retail giants such as OK Zimbabwe, Food World, N. Richards, and Pick n Pay have already closed branches, citing weak demand and unmanageable operational costs—underscoring the harsh commercial realities facing the private sector.

Former Monetary Policy Committee member Eddie Cross attributed the current crisis of confidence to flawed monetary and fiscal decisions made earlier this year.

“I’m not surprised that business confidence is so low. We started the year with distorted financial and monetary policies, which caused immense damage to the private sector—especially retail,” Cross said. “Major companies have faced liquidation, and some have closed completely. This would not have changed unless government abandoned the previous fixed exchange regime.”

Cross acknowledged that the Reserve Bank has shifted toward a more orthodox approach under the ZiG regime but cautioned that any recovery remains tenuous without comprehensive fiscal reform.

“The Finance Minister is under pressure to meet spending demands that far exceed available cash flow. Without structural reforms, these obligations simply cannot be met,” he warned. “There must be a fundamental overhaul of the budgeting process. That includes revisiting taxes like PAYE and income tax. Right now, the wage bill—especially for civil servants—is far beyond what the economy can sustain.”

Cross further warned that the apparent stability of the ZiG may be artificially sustained by government’s tactic of delaying payments to suppliers and service providers.

“ZiG’s current stability is largely because the government is withholding payments. But once those arrears are cleared, liquidity will surge and inflation could resurface. It’s not a sustainable model,” he cautioned.

Economist Vince Musewe was equally scathing in his assessment, describing the prevailing conditions as fundamentally “anti-business.”

“It’s very difficult to run any business under these conditions,” Musewe said. “There’s no currency certainty, operating costs are escalating, and planning for future expenses is almost impossible. Add to that the rapid informalisation of the economy—and you’re looking at a business environment that’s structurally hostile to growth.”

As 2025 unfolds, the overwhelming sentiment from Zimbabwe’s executive class is that without radical reforms—spanning fiscal discipline, regulatory clarity, and institutional rebuilding—the country’s economic malaise will deepen.