Business leaders bullish about 2024

CAPTAINS of industry are bullish about 2024, a year they expect the Government to continue to address key challenges bedevilling the economy.

The ushering in of the Second Republic, under President Mnangagwa, in November 2017, saw the country going into an economic recovery mode, where the Government has committed itself to addressing a myriad of challenges besetting the economy.

The constraints include depressed power generation, an unstable exchange rate and limited availability of the much-needed foreign currency.

Confederation of Zimbabwe Industries president Mr Kurai Matsheza said 2023 was also marked by polls that saw the country going into an election mode, which meant some key business decisions could not be made at one stage.

“The election period affected us, as some people were taking a wait-and-see approach, to say we are waiting for the new Government to come, in terms of Cabinet appointments and so on. As a result, certain business decisions were not made immediately and this affected some business operations.

“Now that the elections are over and we are here, the end of another year (2023), we look forward to 2024 with prospects of improved power supply, exchange rate stability and a continued peaceful environment, which promote growth and development of new and existing investments across all economic sectors,” he said.

Mr Matsheza said 2023 had its ups and downs that included the shortage of Zimbabwe dollars and foreign currency, but industry had managed to pull through and at some point during the course of the year, electricity supply improved.

In a separate interview, Zimbabwe National Chamber of Commerce president Mr Mike Kamungeremu said this year was largely characterised by volatility, particularly in the exchange rate, but after interventions by the authorities, there was stability.

“After June, things stabilised and up to now, I think we are closing the year on a strong note because of the stability that continues to prevail,” he said.

Fiscal and monetary authorities have been trying to tame runaway inflationary pressures, as well as stabilising the exchange rate through various interventions that include continued implementation of a tight monetary policy, and introduction of gold coins and digital tokens.

“I think you also know that during elections, people have a tendency of slowing down things because they will not be very sure of the operating environment. But the elections were peaceful, and business went on unhindered. The election period is now behind us.

“As we look forward to 2024, there is some optimism. Last week, we launched our state of industry and commerce survey report. One of the areas the survey covered was the issue of business confidence, which gauged what businesspeople feel 2024 will be like.

“There was a positive sentiment across businesspeople getting into 2024, mainly because of the extension of the multi-currency system to 2030. It brought a lot of certainty in the market and respondents to our survey were optimistic of better prospects next year.

“While that optimism is there, we are aware that it has already been forecasted that there will be normal to below normal rainfall, so there is likely to be a drought and that drought is going to affect business.

“At the same time, we also have the current situation where commodity prices are depressed and that is spilling into 2024 and will affect business. However, it’s good to note that businesspeople themselves are more optimistic of better prospects next year despite the impending drought because, on the other hand, Government and the private sector have collaborated to reduce the effects of the drought, whose impact also spills onto business, particularly the agro-processing industry,” he said.

The World Meteorological Organisation’s warning of El Niño conditions could severely impact farm output in Zimbabwe and some regional countries.

The weather experts have predicted that Zimbabwe and some regional countries will likely experience a drought in the 2023/2024 summer farming season.

In light of the adverse effects of climate change, it was now clear for the nation that Zimbabwe experiences drought after every two years, and basing on that record, economist Prof Gift Mugano said the country needs to build massive grain reserves.

“It is clear that we get drought after every two years of good harvest and we need now to be smarter and build surpluses in good years and build a strong strategic grain reserve, which can take care of us for the next three years if we have drought.

“Our strategic grain reserve is 500 000 tonnes and that is not enough for that one year, so we should have at least treble that figure and keep it to cover ourselves from that shock,” he said.

Prof Mugano said 2023 was coming to an end after the mining industry, particularly the lithium sub-sector, experienced a lot of activity in terms of investments, which was likely to proceed into 2024.

“The lithium industry has proved to be one of the new emerging industries and that was buttressed by the agenda of building a green economy. Zimbabwe is well-positioned to feed on that.

“We hear we have significant supply and reserves of lithium, and the activities, in terms of the response and investments in that sector, have been significant and interesting.

“We all have seen the President commissioning some of these plants and investments in the mining sector. We expect to see that prospect continuing into 2024,” he said.

“I like Government’s view to add value to the lithium sector, but I think we need to build more momentum next year in terms of really getting it visible on the ground.”

Economic analyst Mr George Nhepera said going forward into 2024, agriculture and mining would remain key in offering better prospects for companies in those sectors and across the value chains.

He said the engagement the Government had, through the Zimbabwe Arrears Clearance and Debt Resolution framework this year, is a major development and shows the level of consensus that has come between the country and its creditors.

“That level of engagement between us and those we owe money has never happened before. Now, the coming together of all those stakeholders as far as trying to find a way to clear our external debt shows some level of consensus between the parties.

“Our engagement with other countries has seen the President going all the way to other countries, whether in the East or West, to source for more business. That has happened a lot in 2023 and we hope through such missions, prospects are high that this will attract more investments into the country in 2024.

“Hopefully, such engagements will continue next year.

“Locally, we also expect to see Government continuing with its open-door policy, where industry is able to give input in policy formulation. In 2024, it is likely that opportunities for investment will remain in key sectors like mining and agriculture, and macro-economic growth would be spurred by those two sectors despite the depressed prices of minerals on the international market.

“As a country, we cannot be held back by such developments on the international market because it’s something that is intermittent and shall come to pass,” said Mr Nhepera.

Dinson Iron and Steel Company’s 50-megawatt power station under construction around the firm’s Manhize steel plant in Mvuma. Building of the plant is also in progress. The power station will generate electricity from coal and gases emitted from the steel plant to augment supply from the national grid. Growing public and private sector investments in power generation are expected to make Zimbabwe a net exporter of electricity soon and help drive its economy and those of other countries in the Southern African Development Community. — Pictures: Kudakwashe Hunda