CEOs sound alarm | Business Times

SAMANTHA MADE

Captains of industry and commerce are pressing the government to take immediate action on mounting macroeconomic challenges that threaten the survival of local companies.

The chief executive officers (CEOs) warn that excessive taxation, exchange rate volatility, high public debt, a widening fiscal deficit, inflation, and erratic power supply are creating an unsustainable business environment.

They have also condemned the government’s de-dollarization policy, calling it a “deeply flawed strategy” that fuels uncertainty and discourages investment.

Business leaders insist that the multi-currency system must be permanently adopted, arguing that plans to phase it out by 2030 would destabilize financial markets and disrupt operations.

Executives dismissed Zimbabwe’s transition to a mono-currency system, warning that the Zimbabwe Gold (ZIG) remains too weak and volatile to sustain a stable economy. While they acknowledge the need for long-term currency reforms, they stress that the government must first restore monetary and fiscal credibility before making such a shift.

“The de-dollarization policy is premature and lacks the necessary economic fundamentals,” said Oswell Binha, chairman of the CEO Africa Roundtable, an umbrella body for corporate leaders.
“Businesses need certainty. The government must focus on ensuring macroeconomic stability before enforcing a mono-currency system.”

Zimbabwe’s excessive taxation is also under fire, with business leaders warning that it is choking economic growth. The country’s effective tax burden exceeds 40%, with companies facing more than 51 different taxes and regulatory costs, making Zimbabwe one of the most heavily taxed economies in Africa.

CEOs are calling for urgent tax reforms, including simplifying and consolidating regulations while eliminating burdensome levies such as the Intermediated Money Transfer Tax (IMTT) to boost compliance and stimulate consumer demand.

“A reduced and well-structured tax system will encourage compliance, drive investment, and increase overall revenue collection,” Binha said.

While some executives propose making all taxes, licensing fees, and duties payable exclusively in Zimbabwean dollars to strengthen demand for the local currency, they caution that this must be accompanied by broader economic reforms to restore business confidence.

Zimbabwe’s distorted exchange rate system continues to fuel inflation and arbitrage opportunities. Despite efforts to stabilize it, the gap between the official and parallel market rates remains above 30%, creating inefficiencies across the economy.

Executives are demanding full liberalization of the exchange rate, arguing that a market-determined rate is essential for restoring confidence and eliminating price distortions.

“Fixing the exchange rate is unsustainable,” Binha said.
“The government must allow market forces to determine the currency’s value.”

Business leaders are also advocating for greater autonomy for the Reserve Bank of Zimbabwe (RBZ), ensuring it can implement effective monetary policies free from political interference.

The Informal Economy and Illicit Financial Flows

Another major concern is Zimbabwe’s vast informal economy, which is estimated to account for 70% of total economic activity. CEOs argue that its unchecked growth is weakening the impact of macroeconomic policies.

“The informal sector thrives in an unregulated environment, evading taxes and undermining formal businesses,” Binha said.
“Many traders operate underground to escape excessive regulations, placing an unfair burden on compliant businesses.”

Additionally, rampant smuggling and illicit financial flows are worsening Zimbabwe’s trade deficit. Reports indicate that the country loses between US$500 million and US$1 billion annually to illegal cross-border transactions, hurting legitimate businesses and depleting government revenue.

To combat this, CEOs are urging authorities to tighten border controls, strengthen institutions, and implement anti-corruption measures to curb illicit trade and protect formal businesses.

Zimbabwe’s deteriorating economic conditions have created a hostile business climate, eroding investor confidence and stifling growth.

The message from business leaders is clear, the government must take decisive action—now.

Immediate steps are needed to stabilize the economy, reform taxation, ensure exchange rate flexibility, and crack down on smuggling.

Executives warn that failure to act will push more companies into distress, further weakening an already fragile economy.

As economic headwinds intensify, the government faces mounting pressure to implement bold, business-friendly policies—or risk deepening Zimbabwe’s economic crisis.

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