Tapiwanashe Mangwiro, Zimpapers ReporterMEASURES to preserve the prevailing economic stability and plans to review business conditions to improve competitiveness will get Government’s priority attention in the remainder of the year, Finance, Economic Development and Investment Promotion Minister Prof Mthuli Ncube has said.Presenting the 2025 Mid-Term Budget Review in Harare yesterday, Prof Ncube underscored the urgency of addressing the high cost of doing business in Zimbabwe, with agriculture being targeted in the next two weeks.The minister’s mid-term review demonstrated the Government’s sensitivity to calls from captains of industry for the Government to streamline statutory obligations and the regulatory or compliance framework to give businesses some breathing space.This comes as the Treasury Chief revealed the economy remained on course to achieve targeted growth of 6 percent, following a growth slowdown from 5 percent to 1,7 percent last year due to the El Niño-induced drought impact, while fiscal revenue and expenditure had performed in line with projections in the first six months of this year.In response to business constraints raised by economic analysts, taxpayers and business member groups alike, the minister revealed immediate plans to review the country’s taxation framework, noting this would be undertaken without upsetting fiscal sustainability.“In recognition of the concerns raised by taxpayers and business representative organisations, such as the Chamber of Mines, Confederation of Zimbabwe Industries and Zimbabwe National Chamber of Commerce, Government will continue to review the existing tax system with a view to reducing reported and observed distortions,” he said.The aim, he said, was to grant the necessary supportive regulatory regime for business growth and competitiveness within and on the regional and international market.Ongoing nationwide consultations will feed into measures to expand the tax base by bringing emerging sectors and informal enterprises into the formal fold, primarily through digital and financial inclusion.Simultaneously, digitisation of tax administration, data integration and strengthened enforcement will streamline compliance.Industry and Commerce Minister Mangaliso Ndlovu in May acknowledged that commercial operators were required to secure up to 25 separate licences to operate a single supermarket, incurring unsustainable overheads.Major retailers such as OK Zimbabwe and TM Pick n Pay are on record voicing concerns about restrictive requirements and conditions, including taxes such as Intermediated Money Transfer Tax (IMTT), which exert heavy costs under the existing licensing framework.Another example drawn from the poultry sector players shows several compliance measures enforced by the National Biotechnology Authority (NBA) and the Agriculture Marketing Authority (AMA), such as the latter’s annual registration fee of US$6 500 per annum, which constrained businesses.“During the beginning of the year 2025, His Excellency, the President, Dr Emmerson Mnangagwa, made a commitment to improve the ease of doing business by addressing the high regulatory and utility costs and enhancing border efficiency,” Prof Ncube told lawmakers.He reaffirmed that, with immediate effect, “Government has begun the process of reviewing various fees and charges,” and pledged that the number of bureaucratic steps and compliance requirements will be drastically reduced.Dr Emmerson MnangagwaThese reforms, he explained, are aimed at creating a conducive business environment that attracts both domestic and foreign investment, fosters innovation and promotes sustainable economic growth through streamlining business regulations, reducing compliance costs and eliminating bureaucratic inefficiencies.“In practical terms, the second half of 2025 will see the Government seized with implementation of the business reforms, from cutting licensing fees to digitising application processes,” Prof Ncube said.“Zimbabwe’s leaders intend to reduce the operational cost of domestic industry to enable it to compete both domestically and internationally.“Investment and compliance to tax legislation are critical for a sustainable domestic resource mobilisation framework,” he observed, promising legislative and regulatory tweaks to reduce the cost of compliance while tightening loopholes exploited through tax-avoidance practices.This comes as the ZimStat’s 2025 Economic Census, conducted over the past 18 months, counted 204 798 operational establishments. Of those, 76,1 percent operate informally, with just 1,6 percent in the large-to-medium bracket and 98,4 percent categorised as small and micro enterprises.This informal predominance both reflects and exacerbates the high regulatory burden that formal operators face, a challenge the government is now treating as its foremost economic priority.Against a backdrop of global economic dislocation, from inflationary pressures in advanced economies to supply-chain disruptions, Treasury remained positive about maintaining its 6 percent growth forecast for 2025.“This decision signals our confidence in the resilience of the local economy,” the minister stated, highlighting that the projection is underpinned by a post-drought agricultural rebound, improved power generation from Kariba and Hwange dams, and a stabilised exchange rate.Agriculture alone is expected to surge by 21 percent, driven by maize and tobacco output recovering from last year’s shortfalls. Meanwhile, information and communications should expand by 7,9 percent, and wholesale and retail trade by 5,5 percent.On the demand side, private consumption is forecast to rise 6,5 percent, public consumption 6,3 percent, private investment 5,6 percent and public investment 6,3 percent.However, the minister cautioned, “These assumptions rest on a favourable agriculture season; improved electricity generation; low inflation and stable exchange rate, and subdued international commodity prices.”For the six months to June, Zimbabwe’s fiscal accounts paint a picture of disciplined stewardship.
Revenues amounted to ZiG101,2 billion against a target of ZiG118,1 billion, while expenditures reached ZiG98 billion versus an anticipated ZiG127,5 billion, yielding a cash-basis surplus of ZiG3,3 billion.In hard-currency terms, receipts of roughly US$3,68 billion exceeded the US $3,28 billion goal, while outlays of US$3,67 billion narrowly topped the US$3,54 billion projection.“These results demonstrate our commitment to ‘living within our means’ and ensuring that all expenditures are contingent on revenue performance,” the Treasury chief remarked.He added that maintaining fiscal prudence was complementary to the monetary policy stance, supporting price and exchange-rate stability.Parallel to the budget review, the Government is fast-tracking its National Development Strategy 2 (NDS2) medium-term economic blueprint, with Cabinet having approved a roadmap in September 2024.A total of 10 thematic areas, from macro-economic stability and financial-sector deepening to agriculture, climate resilience and digitisation, will guide policy formulation.The finance minister also outlined a phased approach, thematic working groups chaired by public and private sector experts, a technical workshop for ministries to draft an integrated results-based framework, and a local drafting team to consolidate inputs into a Cabinet-ready blueprint by early November 2025.“By aligning NDS2 with the principles of integrated results-based management, we ensure that our developmental goals are translated into measurable outcomes,” he said.The final document will then steer the 2026 National Budget, anchoring Zimbabwe’s medium-term strategy in a coherent, stakeholder-driven framework.As the country embarks on the second half of 2025, the minister acknowledged that the road ahead remains challenging.He noted that external shocks, ranging from shifts in global commodity prices to trade wars, could again test the country’s resilience.Domestically, the success of doing-business reforms, effective revenue mobilisation and sustained engagement with industry will determine whether growth targets are met.However, the tone of the mid-term review was one of guarded optimism.“Our mid-term review demonstrates both prudence and purpose as we navigate a complex global environment,” Prof Ncube concluded.This is achieved through leading with a commitment to lower operating costs, maintaining ambitious growth benchmarks, delivering a modest surplus and launching comprehensive tax and development-strategy overhauls.”Share on FacebookPost on XFollow usSave
Originally published on Zimbabwe Herald
Source: Herald
