THE Confederation of Zimbabwe Industries (CZI) has commended the Government for implementing a series of economic reforms that have bolstered macroeconomic stability and restored a measure of predictability in the economy.
CZI president Mr Mucha Mkanganwi said this while addressing delegates at the Zimpapers and CZI-organised 2026 Post-Budget Breakfast Meeting held in Harare this morning(yesterday).
He noted that disciplined fiscal management, tight monetary policies and streamlined business regulations announced recently had stabilised the economy — a development not seen in Zimbabwe for more than four decades.
The Government has made significant efforts to strengthen public finance management and maintain fiscal discipline, including ending the use of the central bank window to plug Treasury’s fiscal gaps.
Tight monetary and fiscal policies have stabilised the exchange rate and brought down inflation, positively impacting business confidence.
Zimbabwe has seen a dramatic drop in inflation and exchange rate volatility since introducing the Zimbabwe Gold (ZiG) currency in April last year — a gold and foreign currency-anchored unit of account that replaced the inflation-weary Zimbabwe dollar.
The annual ZiG inflation rate plunged from 106 percent in June to 19 percent in November, while the monthly rate has averaged 0,5 percent since February, reflecting anchored inflation expectations.
According to Mr Mkanganwi, there have been marked improvements in the ease of doing business, which have renewed confidence and supported industrial productivity.
“We are encouraged by the Government’s commitment to creating a predictable and supportive economic landscape. These measures are beginning to yield positive results for industry,” said Mr Mkanganwi.
He added that macroeconomic stability had improved growth prospects across key sectors, with industry now looking to the next phase of reforms — including deepening and modernising financial markets to support long-term investment.
“If you are able to grow GDP and even double it in five or six years, as some projections suggest, that is significant for the economy,” he said.
He also noted that inflation, long regarded as one of the biggest threats to business planning, had been reduced to single-digit levels — a development he described as “outstanding” given Zimbabwe’s volatile economic history over the last four decades.
“I started working in the early 90s. I do not remember a time when inflation was in single digits. I congratulate the Government for its efforts to get us here. Inflation below five percent is quite exceptional.”
Mr Mkanganwi also commended ongoing efforts to enhance the ease of doing business, particularly reforms spearheaded by the Ministry of Finance, Economic Development and Investment Promotion in collaboration with the World Bank and key private-sector players.
He praised the strengthening of the business–state partnership, describing it as one of the most constructive platforms for policy dialogue in recent years.
“I have been involved in advocacy for many, many years, and I can say without hesitation that we do have a listening Government. We have access, we have robust conversations, and we look forward to continuing that engagement,” he said.
CZI indicated that industry remains optimistic that sustained reform will anchor long-term stability, unlock fresh investment, and support Zimbabwe’s ambition to accelerate economic growth.
Speaking at the same event, tax experts applauded the potential positive impact of Treasury’s decision to raise the Value Added Tax (VAT) rate by 0,5 percentage points, saying the move will deliver an immediate boost to fiscal inflows.
However, they noted that the VAT increase may inadvertently cause a slight rise in business operating costs. Economists believe the added cost could affect competitiveness and consumer spending patterns, but the VAT adjustment will offset the negative impact of the reduced Intermediated Money Transfer Tax (IMTT) on the fiscus.
The IMTT, introduced in 2018, is levied on electronic financial transactions and remains a significant source of Government revenue collected by Zimra.
Blocked from accessing concessionary funding from global lenders due to long-standing arrears and Western sanctions, Zimbabwe has had to devise innovative ways to support domestic resource mobilisation.
Finance Minister Professor Mthuli Ncube, in his 2026 national budget proposals delivered on November 27, 2025, reduced the IMTT rate by 0,5 percentage points to 1,5 percent to ease its negative impact on business costs.
The marginal VAT adjustment to 15,5 percent from January 2026 will plug the gap created by the IMTT reduction, helping maintain balance in Treasury’s already stretched funding kitty.
Harriet Thompson, Associate Director for Tax Advisory & Consulting at Axcentium, said the VAT adjustment would strengthen Treasury’s revenue inflows as the tax is collected upfront.
“Increase in VAT rate is going to immediately boost revenue to the fiscus as VAT is collected upfront,” Ms Thompson said. “However, businesses have a choice to absorb the cost or pass it on to consumers.”
While the VAT increase provides short-term fiscal relief, authorities will need to balance revenue mobilisation with competitiveness and consumer welfare, to avoid widening the gap between the formal and informal economy.
Minister Ncube assured delegates that the VAT hike would not impact prices for at least 14 basic commodities, cushioning vulnerable households from potential price increases.
Basic foodstuffs zero-rated for VAT in Zimbabwe include mealie-meal, sugar, milk, meat (beef, pork, poultry), salt (under 5kg packs), bread, flour, cooking oil (specific types), and eggs. Also zero-rated are key agricultural inputs such as fertiliser, seeds, pesticides, animal feed, tractors, and specified machinery, as well as live animals and bovine semen.-herald
