Local businesses are in a precarious situation as economic headwinds threaten to become more severe, causing major headaches, CEOs have warned.
A number of business executives who spoke to Business Times at the ongoing CEO Africa Roundtable in the tourist destination of Victoria Falls said that businesses were dealing with a decline in production and dwindling domestic demand.
Companies are also struggling to stay afloat due to the rising costs of raw materials brought on by currency fluctuations.
They foresaw a difficult road ahead as the industry deals with other challenges like declining profit margins, shortages of foreign currency, and currency volatility.
Board chairman of CEO Africa Roundtable, Oswell Binha said: “Local operating environment remains precarious.”
He added: “Zimbabwe has a vision to achieve an upper middle income economy by 2030. (But) Zimbabwe and Africa are lagging behind in terms of income earning capacity and need to catch up.
“An honest introspection of the requirements are therefore a necessary imperative as we discuss broader issues of Zimbabwe and Africa’s key policy and strategic ingredients for our attention as we plot how to transform our economies to induce a respectable position on the global economic platform. There is also a need for a new inclusive social contract to create continent-wide cohesion, especially at this point in the life of our beloved country Zimbabwe and the creation of a standardised and guide script is integral to deal with perception of country risk, investment attraction and promotion of shared national value system.
“ It is also important to have stable financial markets, particularly fixing the currency crisis and national debt because without this Africa and Zimbabwe in particular can kiss credible investment goodbye.
In addition to that, a genuine, effective and robust international engagement is needed. Government should also deal with the de-dollarisation strategy.”
Binha’s remarks come at a time industry is struggling to deal with the growing dichotomies, particularly with regards to currency conundrum as it is getting harder to forecast business outcomes beyond 2025. He said the government should develop a clear de-dollarisation roadmap , as failing to do so would cause serious macro-economic difficulties that would have a terrible impact on business.
The government in 2020 announced a de-dollarisation roadmap outlining how the economy will transition over a period of five years up to 2025.
However, investors and lenders are now reluctant to support industry beyond 2025.
In response, Minister of Industry and Commerce, Sithembiso Nyoni, said: “As government the approach has been to create the spirit of smart partnership. Industry in today’s challenging environment has to be aggressive and pursue innovative ways to survive.”