eBusiness Weekly
Tapiwanashe Mangwiro
In a challenging Zimbabwe economic landscape, research firm Mark and Associates is urging business to prepare for continued policy shifts and uncertainty, coupled with the persistent trend of informalisation in 2024.
The call for preparedness comes amidst a backdrop of diverse shocks, including fluctuating commodity prices, global economic dynamics and domestic challenges.
The business community faces the uphill task of balancing short-term responsiveness with long-term strategic planning.
“Businesses should be prepared to enter uncharted economic waters in 2024 as it will be marked by policy shifts and uncertainty,” the economic research Mark and Associates said in a report.
According to the research firm, this will create both winners and losers. “Already, the business community in Zimbabwe is seized with uncertainties around regulations, taxes and revenue measures introduced in the 2024 National Budget,” the report reads.
Business was told that it should expect a lot of altering of both fiscal and monetary policies in 2024 which would undoubtedly usher in an unstable business environment moving into the year.
As a result, high levels of policy uncertainty will also lower investment, employment and economic output in general.
Mark and Associates also expects the informalisation trend to continue in 2024 as different economic shocks have impacted the structure and shape of the Zimbabwean economy.
There are some unconfirmed reports that some of the formal businesses such as manufacturers and wholesalers are sponsoring the creation of some shadow businesses to escape regulatory radar as survival strategy.
“With limited formal employment opportunities especially for the youths, there has been an escalation of self-employment with some citizens moving into vending and small businesses.
“Our assessment of the business environment taxes, cost of formalisation and regulations suggests a trend of an explosion of road side businesses as the informal economy becomes more entrenched in 2024 and beyond,” the report reads.
Economists, Tinevimbo Shava and Gladys Shumbambiri-Mutsopotsi, along with Dr. Prosper Chitambara, also shed light on the evolving 2024 economic dynamics.
Shava warned; “Zimbabwean businesses should adopt agile strategies to navigate through the ongoing policy changes. The economic landscape is marked by unpredictability, necessitating adaptability at all levels.”
Shumbambiri – Mutsopotsi emphasised the informalisation trend, stating; “Despite efforts to stabilise the economy, businesses must acknowledge the persistent informal sector growth. This reality demands a nuanced approach in business planning and market positioning.”
Dr Chitambara added a macro-economic perspective and highlighted; “Continued shocks, both internal and external, contribute to the prevailing uncertainties.
Business must factor in resilience and risk mitigation strategies to withstand these challenges.”
As the nation grapples with these issues, experts advocate for a collaborative approach between businesses and policymakers to foster stability.
The resilience of Zimbabwean businesses will be crucial in navigating the intricate web of economic challenges and ensuring sustained growth in the face of uncertainty.
According to Mark and Associates, government should smoothen the business policy environment through minimal interventions to avoid confusing the market.
“We contend that free economies work better than those based on central authority. Decision-making in free markets is a reality-based system guided by individual preferences and sound economic decisions.
“The good economics realises that if you want the baker to bake a bigger pie, you do not beat him up and steal his flour. Instead, you cooperate with him and create a climate of freedom for each individual human being to peacefully pursue his own self- interest without fear of punishment,” they said.
Major setback is thought to be the issue that regulations are top-down commands and not efforts to find common agreement.
In the report, the research firm said authorities should expose corruption to public scrutiny.
“Zimbabwe needs to do all the things every emerging nation has to do to attract foreign and regional partners to not just grow but survive in the new global economy. International investors today now possess a plethora of investment options they can invest in.
“Investors need to see more crack downs on chronic corruption that has dogged economic activity for decades. More arrests, demotions of corrupt leaders, seizure of stolen or siphoned assets will help boost confidence,” the report read.
Among other solutions proffered, promotion of small and medium sized businesses (SMEs) and entrepreneurial skills development and adherence to the National Energy Generation Master Plan were included.
“There is a need to give priority to construction of electricity distribution networks and rural electrification projects to promote sustainable economic development as well as capacity building within institutions, and to aggressively promote the use of renewable energy such as solar PV installations and biomass co-generation,” the report read.
