Companies warn of punitive headwinds
LIVINGSTONE MARUFU / CLOUDINE MATOLA
Authorities project a year of stabilising prices and steady growth, but a chorus of warnings from the country’s corporate boardrooms paints a different picture of an economy still mired in structural crisis.
Speaking to Business Times, a market leader in business, financial and economic reportage, chairpersons of multiple listed companies and independent economists gave a cascade of apprehensive statements.
They described an operating environment as one where macroeconomic stability, achieved after years of volatility, is being steadily eroded by escalating costs, a punitive tax regime, and an unrelenting assault from a booming informal sector.
“The International Monetary Fund has also forecasted economic growth to slow down to about 3.5% due to low market confidence in the durability of macroeconomic stabilization, and fears of fiscal needs taking priority over private investments,” said Itai Pasi, Chairperson of CFI Holdings.
Her sentiment captures a pervasive corporate anxiety that the hard-won stability of the past few months may be transient.
“Power supply challenges persisted, with alternative power sources carrying higher operating costs,” said Dr. Thomas Wushe, Chairman of ART Corporation.
Rungano Mbire, Chairman of starafricacorporation, noted that tight monetary policy, while stabilizing the currency, has led to “suppressed consumer demand.”
The tax system is a particular flashpoint. The reduced 1.5% Intermediated Money Transfer Tax (IMTT) on local currency transactions and an increased Value Added Tax of 15.5% are seen as direct burdens on formal businesses.
The Zimbabwe National Chamber of Commerce (ZNCC) president Tapiwa Karoro, however, has laid out a cautiously optimistic blueprint for 2026, forecasting economic growth of at least 5% and inflation remaining below 15% for the greater part of the year.
This outlook, Karoro asserts, is “supported by improved inflation dynamics, tighter monetary management, and strong foreign currency inflows driven by exports and diaspora remittances.”
“This level of inflation, while still elevated, would represent a meaningful improvement in price predictability and would support business planning, investment decisions, and consumer confidence,” Karoro stated.
He acknowledged, however, that this outlook hinges on “policy consistency, energy availability, and the extent to which cost pressures at the firm level are addressed.”
Zimbabwe’s economy is battling debilitating power outages, a punitive web of taxes and regulatory fees, and suffocating competition from informal traders who operate without the same fiscal burdens.
Economist Titus Mukove explained that while businesses can deduct the IMTT, “the consumers are still feeling the impact and pressure. And it does affect their transactions.”
Over 80% of transactions in Zimbabwe are conducted in US dollars. Formal businesses feel they are subsidizing the state while informal competitors thrive untaxed.
“If you walk around the business central district, you find that someone is renting a shop and paying taxes… but someone is selling exactly the same goods on the streets right next to his entrance,” Mukove said, estimating that 70% of economic activity occurs in the informal sector.
Another economist, Eddie Cross, echoed this, citing “the problem of cheap imports being smuggled into the country without any charges for taxation.”
Yet another economist, Persistence Gwanyanya, a member of the central bank’s monetary policy committee, reaffirmed the 5% growth projection, citing agriculture and mining.
But all agree that its realisation depends on urgent, deep-seated reforms.
