His warning comes on the back a persistent
liquidity crunch, exchange rate volatility and a wave of business closures and
corporate rescues.
“Companies are
paying the price of an uncertain political regime and exchange rate
mismanagement. The introduction of the ZiG [Zimbabwe Gold] currency has only
brought chaos to the economy,”he told NewsDay Business.
The Zig was
introduced in April last year in Zimbabwe’s sixth attempt to establish a stable
currency in over a decade.
Biti warned of a total collapse in aggregate
demand as businesses struggle with punitive debt charges and limited access to
affordable capital.
“It’s going to be a bloodbath for businesses
in 2025,” he added. To prevent further decline, Biti said the economy must be
liquid.
There must be cheap money in the market to
allow access to funding and ensure businesses survive, he said.
Biti also
criticised export surrender requirement, describing it as an unnecessary burden
that limits access to foreign currency.
“Export surrender requirements are an
additional threat to business. Removing them would ensure a huge chunk of
foreign currency is available in the market,” he said.
Exporters
surrender 25% of their proceeds in exchange for local currency at the
prevailing interbank exchange rate.
Biti called for the removal of money transfer
fees, which he said were stifling economic activity and increasing the cost of
doing business.
“These fees are
choking businesses and making it impossible for them to operate efficiently,”
he said.
Biti expressed concerns over the political
uncertainty exacerbated by a push for President Emmerson Mnangagwa to extend
his term beyond the constitutionally mandated two terms that end in 2028.
“The
uncertainty created by Mnangagwa’s third-term ambitions and the removal of key
officials is discouraging investment and deepening the crisis. Such moves
create suspicion and erode trust in governance,” he said.
Mnangagwa
recently appointed new heads for the police and the intelligence agency.
Biti said the
political climate is driving businesses to relocate to South Africa and other
neighbouring countries, while investors remain hesitant to commit.
Economist Chenaimoyo Mutambasere pointed to a
gloomy outlook, saying the 2025 budget requires US$38 billion to address the
country’s needs, but government revenue and expenditure are both pegged at US$7
billion.
“With 60% of
the population already living in extreme poverty, the situation is dire. The
country needs a miracle to recover,” she said. Newsday
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