Business lobby for relief measures to ease burden

Mike Tome

Business Reporter

THE Zimbabwe National Chamber of Commerce (ZNCC), a leading business advocacy group, is lobbying the Government for a range of relief measures to ease the burden on businesses.

The recommendations are outlined in the ZNCC’s 2025 Business Confidence Index (BCI), which also revealed a positive outlook, indicating that businesses are optimistic about the year ahead.

Specifically, the ZNCC is pressing for a reduction in electricity tariffs, which it says has become a major cost burden for businesses across various sectors.

In addition, the chamber is calling for a comprehensive review of the Intermediated Money Transfer Tax (IMTT), arguing that the current rate is excessive and hinders business transactions.

Furthermore, it is advocating for a downward review of corporate taxes to enhance business competitiveness, encourage investment and establish a market-determined exchange rate regime.

The measures, according to the ZNCC, were crucial for alleviating the financial pressures faced by businesses and fostering a more conducive environment for economic growth and development.

In terms of energy costs, the survey proposes reducing the electricity tariff from US$0,142 to US$0,09 per kilowatt-hour for commercial users.

This is expected to boost key sectors such as manufacturing, information and communication technology (ICT), and mining, critical for economic growth.

The survey points to the essential need for the revitalisation and expansion of the national electricity grid.

The ZNCC also called for the upgrading of the national grid to efficiently transmit energy from emerging renewable sources like solar and wind power while minimising transmission losses in anticipation of new energy projects expected to be integrated into the grid by December 2025.

Another key suggestion is a 6–12-month grace period for businesses to settle their ZESA debts.

Regarding tax relief measures, the ZNCC has recommended reducing the corporate tax rate from the current 24 percent to 22 percent.

The body believes the reduction will alleviate the financial burdens on businesses and stimulate further investment in the economy. The ZNCC urged the Government to abolish the 2 percent IMTT, arguing it discourages the use of electronic payment methods.

The ZNCC recommended investing in skills development by strengthening industry-education linkages to create decent employment opportunities and facilitate the structural transformation of Zimbabwe’s economy, transitioning it from a reliance on commodities to a more sophisticated, industrialised framework.

Digital transformation and formalisation were also highlighted as pivotal for improving efficiency and moving the economy towards greater formality.

The ZNCC stressed the necessity for improved border management to combat smuggling and illicit cross-border trading.

This requires investing in advanced technological solutions and augmenting resources for customs enforcement to enhance the efficiency of border operations while intensifying measures to detect and intercept counterfeit goods, particularly those requiring import licenses.

To promote transparency and accountability, the ZNCC urged the Government to develop a comprehensive reporting system for Government contracts and public procurement to mitigate issues related to tender inflation, corruption, and tax evasion.

On the economic outlook, ZNCC has expressed optimism regarding medium-to-long-term macroeconomic stability and positive business prospects in 2025.

The survey revealed that Zimbabwean business executives are optimistic about their companies’ profitability, investment potential, and overall economic performance in 2025 compared to 2024.

“While currency volatility remains a persistent challenge, our optimism for the long-term achievement of macroeconomic stability is supported by the positive Business Confidence Index results from both the 2023 and 2024 surveys,” said Mr Chris Mugaga in his commentary on the 2024 annual state of industry and commerce survey report.

“These indices reflect a robust sense of hope within the business community regarding Zimbabwe’s economic trajectory, blending hope with a pragmatic approach as we advance,” said Mr Mugaga.

It emphasised the critical importance of curbing money supply growth to stabilise the exchange rate and inflation rates, as excessive liquidity has been identified as a key driver of economic instability.

This week, Finance, Economic Development and Investment Promotion Minister Prof Mthuli Ncube expressed satisfaction with the ongoing liquidity management programme aimed at maintaining macroeconomic stability, despite concerns raised by various economic players about a liquidity crunch.

Minister Ncube said the primary objective of the liquidity management programme was to safeguard the domestic currency by curbing excessive liquidity growth — a significant driver of currency volatility, instability and ultimately, causing inflationary pressures that undermine macroeconomic stability.

“At the moment, we feel that things are being managed in the right way,” said Minister Ncube.

Several economic players have expressed concerns about a liquidity crunch, citing factors such as limited credit availability and a decline in economic activity.

Morgan & Co, in its Zimbabwe 2025 outlook report released yesterday, acknowledged that the current restrictive monetary policy, characterised by tight liquidity for both Zimbabwe dollars and US dollars, as well as high interest rates on the local currency, has positively impacted currency stability.

However, it cautioned that this restrictive policy has limited the amount of loans issued by the banking sector as this will subsequently affect the availability of bridging finance aimed at covering cash flow gaps between production and receipt of sale proceeds in the private sector.