Save industry

Another bad year for industry should no longer be treated as routine.

It is an alarm bell, loud, persistent and increasingly impossible to ignore.

By the end of 2025, Zimbabwe’s industrial sector was not merely underperforming, it was retreating. Businesses were shrinking, listings were disappearing, and confidence was quietly draining from the economy.

This is not the language of resilience. It is the language of exhaustion.

What unfolded over the year was not an unavoidable economic slump. It was the consequence of policy choices that continue to penalise formality, scale and compliance while leaving the informal economy largely untouched.

Industry did not fail because it lacks ingenuity or discipline. It failed because the environment in which it operates has become structurally hostile to growth.

At the centre of this hostility is taxation , not in principle, but in design and application.

The Intermediated Money Transfer Tax has evolved into a blunt instrument that taxes economic activity itself.

In a cash-scarce economy where digital payments dominate, every transaction becomes a fiscal event. Each supplier payment, wage transfer and customer purchase erodes already thin margins. Over time, this cumulative drain translates into higher prices, weaker volumes and chronic liquidity stress.

For formal retailers, the damage has been severe.

Once the backbone of urban commerce and formal employment, supermarket chains spent much of 2025 in survival mode.

They faced consumers whose real incomes are shrinking and costs driven relentlessly higher by taxes, utilities and logistics.

Unlike informal traders, they cannot opt out of compliance. And so the market tilts further toward informality , cheaper in the short term, but destructive to the economy’s long-term foundations.

Manufacturing has fared no better. Capacity utilisation remains stubbornly low, constrained by power shortages, volatile input costs and persistent working capital shortages. Short production runs, deferred maintenance and shelved expansion plans have become standard operating practice.

Corporate rescue is no longer exceptional; it is increasingly normal. This is not creative destruction or cyclical adjustment. It is prolonged suffocation.

Capital markets have reflected this retreat.

The wave of delistings from the Zimbabwe Stock Exchange in 2025 is a clear vote of no confidence in the current operating framework. When companies choose to exit public markets, citing currency distortions, weak valuations and rising compliance costs, the message is stark.

As listings shrink, transparency declines and the exchange’s role as a source of long-term capital weakens.

An economy that cannot attract patient capital cannot grow sustainably.

Tax administration has deepened the strain. The aggressive enforcement of the “pay now, argue later” principle has trapped major companies in long-running disputes over taxes already paid in legal tender at the time. While the state’s revenue needs are legitimate, credibility is equally vital. Retrospective interpretations and shifting rules corrode trust. Businesses cannot plan in such an environment, and investors will not commit capital where outcomes are uncertain.

Currency uncertainty continues to hover over the economy. Conditional and open-ended signals around a mono-currency transition may be technically cautious, but in a country shaped by abrupt reversals, ambiguity unsettles markets.

Industry needs clarity and consistency, not prolonged transitions that entrench anxiety and defensive behaviour.

Even mining, often viewed as a stabilising pillar, is under pressure. Power outages, high operating costs and foreign currency constraints are eating into output. Lost production means lost exports, weaker fiscal inflows and less room for policy manoeuvre.

The human cost is becoming harder to ignore.

Formal employment remains under strain, wages trail inflation and household resilience is fragile after years of instability.

Every scaled-back factory shift and every closed retail outlet ripples through communities. Informality may absorb activity, but it cannot replace the stability, tax contribution or quality employment generated by formal industry.

Saving industry is not about protecting corporate interests.

It is about safeguarding jobs, restoring investment, stabilising prices and preserving the tax base on which the state itself depends. Transaction taxes must be fundamentally rethought, not cosmetically adjusted. The tax net must be broadened, not tightened around the same compliant firms. Reforms must move decisively from announcement to execution.

Without urgent, credible action, the erosion of industry will accelerate, and with it, the weakening of the economy itself.