
HARARE – Zimbabwe’s economy is on the brink of collapse, with former Finance Minister Tendai Biti issuing dire warnings about the challenges ahead. He highlighted that the ongoing liquidity crisis, unstable exchange rates, and widespread business closures signal a deepening economic crisis.
Biti attributed much of the turmoil to policy mismanagement, including the introduction of the ZiG [Zimbabwe Gold] currency, which he said has only added chaos to the economy. Launched in April 2024 as Zimbabwe’s sixth attempt to establish a stable currency, the ZiG has fallen short of expectations, leaving businesses struggling with punitive debt charges and limited access to affordable capital. Biti warned that the collapse in aggregate demand could lead to devastating consequences for businesses, predicting a “bloodbath” in 2025.
The former minister stressed the urgent need for reforms to stabilise the economy. He argued that making capital more accessible is essential to prevent further business closures. Additionally, he criticised policies such as the export surrender requirements, which compel exporters to exchange a portion of their earnings for local currency, describing this as a significant obstacle to economic recovery. He also pointed to high transaction fees as another factor stifling economic activity and making it increasingly difficult for businesses to operate efficiently.
Political instability has further compounded Zimbabwe’s economic challenges. Biti expressed concern over President Emmerson Mnangagwa’s apparent bid to extend his tenure beyond the constitutionally mandated two terms ending in 2028. This, coupled with recent reshuffles in key institutions like the police and intelligence services, has created an atmosphere of uncertainty. According to Biti, this political climate is discouraging investment and prompting businesses to relocate to neighbouring countries such as South Africa, further draining the already struggling economy.
Economist Chenaimoyo Mutambasere echoed these concerns, noting that Zimbabwe faces a daunting task in addressing its economic woes. With government revenue and expenditure both pegged at $7 billion against a required $38 billion for the 2025 budget, the country’s financial position remains precarious. Mutambasere pointed out that with 60% of the population living in extreme poverty, the need for economic recovery is more urgent than ever.
The challenges facing Zimbabwe’s economy have already taken a toll on key industries, with major companies such as Beta Bricks, Khayah Cement, and Truworths either shutting down, downsizing, or entering corporate rescue. As 2025 unfolds, the combination of economic mismanagement, political uncertainty, and external pressures threatens to plunge the country deeper into crisis, leaving businesses and citizens alike grappling with an uncertain future.