Business Executives, Captains Of Industry Warn Of A Tougher 2024
Business executives and captains of industry are bracing for a tougher 2024 which may force companies to slash jobs, putting thousands of workers out of work to contain rising costs.
Some of the challenges facing industry are power outages, a liquidity crisis, currency volatility, and shortages of foreign currency.
Speaking to Business Times, the president of the Zimbabwe National Chamber of Commerce (ZNCC), Mike Kamungeremu warned that 2024 will be tougher than 2023 due to El Nino, which will adversely affect farming, load shedding, and depressed commodity prices on the international market. He said:
The year 2024 will be tough. I think even the government themselves have predicted a reduced growth rate compared to 2023 so already that confirms that the year will be a bit tougher than the previous one.
Added to that we have also been told about the drought induced by El Nino that will be coming in 2024 and that drought will affect our agricultural sector and the ripple effect will be felt across the entire economy.
The other effect of the reduced rainfall which has been predicted to be normal to below normal will affect electricity generation capacity at Kariba Dam.
What that means is that the power challenges that we have been facing are also likely to continue in 2024 and that will also affect industry.
Then over and above this commodity prices for our minerals on the international market have been depressed and that is also spilling into 2024 and that will also affect the revenue we are going to receive from the minerals and naturally if the revenue is reduced then we would also face problems because of the requirements that we have as a country which needs to be met.
Kamungeremu urged fellow businesspeople to implement risk mitigation strategies. He said:
So apart from recent monetary policy changes, there are other factors which I have highlighted which will then make the year difficult.
We appeal to fellow business people to put in place risk-mitigating measures for example when it comes to power issues, and power challenges they need to invest in alternative energy so that business can continue even in times of power cuts, it is important.
Then with regards to government policy as ZNCC we will continue engaging for the improvement of the same so that the environment is better for our business people in Zimbabwe.
Kurai Matsheza, president of the Confederation of Zimbabwe Industries (CZI), said the new taxes implemented on 01 January by the Treasury will increase the cost of doing business because they will push prices up. Said Matsheza:
The new measures which are toll fees, fuel levy, and VAT increase from the 2024 budget have meant price increases and hence increased cost of doing business…
Water allocation at Kariba was cut from 22.5 BCM to 8 BCM. This means generation from Kariba will be significantly low and hence load shedding will persist affecting capacity utilization.
This has so many unintended consequences such as a decline in sales, increased informalization as traders opt for importing and an increased working capital cycle.
He also stated that businesses will continue to experience challenges as a result of the government’s inability to resolve the currency problem.
Meanwhile, earlier this week, the Minister of Finance, Economic Development, and Investment Promotion, Mthuli Ncube reversed a directive that prevented manufacturers from selling to retailers.
He said retailers can now purchase from manufacturers as long as they have obtained a valid Tax Clearance Certificate, and are VAT registered.
Ncube also reviewed the sugar tax on beverages to US$0.001 per gramme from US$0.02 per gramme.
More:Â Pindula News
