ZIMBABWE’S high tax burden has been flagged as the major impediment to doing business in the country.
This is contained in Zimbabwe Competitiveness Report (ZCR) 2024 report released on Wednesday by the National Competitiveness Commission (NCC).
The report sheds insights into the country’s economic performance.
With 51 different taxes consuming 32% of business profits, the country compares unfavourably to regional counterparts like Mauritius (eight taxes, 4% tax burden), South Africa (seven taxes) and Zambia (11 taxes).
The report said despite Zimbabwe’s participation in regional trade blocs such as the African Continental Free Trade Area, implementation has been constrained by outdated and expired national policies.
The report said Zimbabwe also continued to lag upper-middle-income economies across key competitiveness pillars which are innovativeness, inclusiveness, sustainability and resilience.
Zimbabwe’s score of 39.7 out of 100 for innovativeness is above the average for low-income countries, but well below its regional and income peers.
The report attributes this to severely limited investment in research and development, currently below 0,1% of gross domestic product and poor technology uptake in key sectors.
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On inclusiveness, Zimbabwe scored 35 out of 100, significantly trailing behind countries such as Mauritius (56), Botswana (53) and South Africa (53).
Barriers such as limited labour force participation, gender inequality and high ICT costs were cited as key factors driving the low score.
In the manufacturing sector, capacity utilisation stood at 52,1% in 2024, with nearly half of existing plant and machinery investments idle.
This inefficiency, the report states, hampers economies of scale, raises production costs and weakens price competitiveness.
NCC executive director Philip Madzima underscored the report’s alignment with Zimbabwe’s long-term development agenda.
Chiedza Chigombe, president of the Engineering Iron and Steel Association of Zimbabwe, highlighted the importance of continuity in national reporting.
Chigombe, however, expressed concern over the slow and inconsistent implementation of past recommendations, warning that this threatens the overall impact of the reports.
“The 2024 edition has made notable progress by presenting actionable and time-bound recommendations,” she said.
“But without commitment to implementation, we risk repeating the same cycle.”
