Business
Broadening the Base : Why Zimbabwe’s SME Strategy Could Define Fiscal Sustainability
Published
8 months agoon
By Staff Reporter
For decades, tax authorities across Southern Africa have grappled with the same paradox: economies dominated by small and medium enterprises (SMEs) that generate substantial economic value, yet contribute disproportionately little to national tax revenues.
In Zimbabwe, where informal and small-scale businesses now account for more than 60 percent of gross domestic product, that challenge has moved to the centre of fiscal policy — and with the 2026 National Budget, government is signalling a decisive shift in how it intends to close the gap.
At the heart of this strategy is a clear directive to the Zimbabwe Revenue Authority (ZIMRA): make tax compliance simpler, fairer and more accessible for SMEs — not as a concession, but as a growth strategy.
Government has directed the ZIMRA to develop tailored, simplified strategies to bring small businesses and start-ups into the tax net in a bid to widen the tax base and meet ambitious revenue targets.
The policy push comes as Treasury sets its sights on US$7.57 billion in revenue for 2026, up from about US$6.2 billion previously, amid tightening fiscal conditions and rising demand for public services.
The medium-term revenue target stands at US$7.2 billion by end-2025, underscoring the urgency of broadening the tax base rather than increasing the burden on existing compliant taxpayers an uphill battle as a significant portion of economic activity remains outside the tax net.
Deputy Minister of Finance, Mr Kudakwashe Mnangagwa, framed SME compliance as both an economic and civic imperative and urged ZIMRA to widen the tax base and include the SME sector which accounts for more than 60% of Gross Domestic Product.
He said every tax payment is an act of patriotism, essential for national development in line with Vision 2030.
“ZIMRA must develop sector-specific strategies to bring start-ups, macro-operators, and small to medium enterprises into voluntary compliance and compliance must be fair, simple and enabling, never a barrier to innovation or enterprise,” Mr Mnangagwa said during the recent ZIMRA Taxpayer Appreciation Awards
“Taxes should create space for businesses to thrive, start-ups to grow and creativity to flourish.”
His remarks echo a growing regional consensus that coercive enforcement alone cannot sustainably integrate informal businesses into the tax system.
Zimbabwe’s SME sector has grown rapidly over the past decade, driven by de-industrialisation, demographic pressure and the expansion of informal trade.
According to the 2022 FinScope SME Survey, the sector contributes an estimated US$8.2 billion to National GDP, making it one of the most significant engines of economic activity.
Yet much of that value remains outside the formal tax net.
With more than 70 percent of the economy operating informally and largely cash-based, collecting value-added tax (VAT), corporate income tax and presumptive levies has proven increasingly difficult.
Weak record-keeping, limited digital access and mistrust of tax authorities have compounded the challenge.
Mr Mnangagwa condemned smuggling activities and tax evasion saying it undermined the country’s development.
Reports indicate that rampant tax evasion and widespread smuggling are crippling Zimbabwe’s revenue collection efforts, costing the nation millions of United States dollars annually and directly threatening the funding of critical public services, officials have warned.
According to official statistics, the government continues to lose vast sums to smuggling, tax fraud, under-invoicing and other illicit financial activities.
Some registered businesses fail to use or tamper with fiscalised electronic registers to underreport sales and avoid paying the correct amount of VAT.
Alongside reform, government has intensified its messaging on the costs of non-compliance. Smuggling, under-invoicing and tax fraud continue to drain public resources, costing the country millions of US dollars annually, according to official estimates.
Mnangagwa was blunt in his assessment, “Compliance is more than law, it is a moral commitment to our communities and future generations.”
“Every act of smuggling, evasion or corruption steals from our children, our communities and our future,” he said.
He linked revenue leakage directly to service delivery gaps, arguing that undeclared goods and falsified returns deprive hospitals of medicines, schools of textbooks and communities of infrastructure.
The challenge is not unique to Zimbabwe. The African Development Bank estimates that illicit financial flows cost the continent over US$80 billion annually, undermining development and investor confidence.
ZIMRA Chairperson, Mr Anthony Mandiwanza, said the authority is recalibrating its approach, balancing revenue mobilisation with practical support for taxpayers, making compliance simpler, especially for small and medium enterprises (SMEs) and start-ups.
Mr Mandiwanza said ZIMRA is pursuing a dual strategy anchored on aggressively expanding revenue collection while making compliance more accessible.
“In the spirit of leaving no one and no place behind, we are also taking services directly to citizens through mobile units, digital platforms, and kiosks at all regional offices,” he said.
“These initiatives are designed to address structural barriers faced by SMEs, including limited internet access, lack of digital literacy and high compliance costs relative to business size,” he said.
He said the push for “sector-specific strategies” and the expansion of mobile and digital tax services are designed to bring more players into the formal system voluntarily.
ZIMRA’s strategy aligns with international best practice. Across Africa, revenue authorities are increasingly adopting “facilitative compliance” models — simplifying registration, reducing filing frequency for small firms and offering education before penalties.
The Kenya Revenue Authority, for example, has rolled out mobile tax clinics and simplified turnover taxes for micro-enterprises, while South Africa’s SARS operates a graduated compliance framework for small businesses. Zimbabwe’s reforms suggest a similar trajectory.
Treasury’s revenue targets reflect growing confidence in macroeconomic stability, particularly following improved inflation control and currency management under the Zimbabwe Gold (ZiG) regime.
But analysts warn that targets of this scale cannot be met without tapping into the informal economy.
Economists note that Zimbabwe’s tax-to-GDP ratio, while improving, remains constrained by narrow compliance.
“Broadening the base is more sustainable than raising rates,” said one Harare-based fiscal analyst. “You cannot keep taxing the same formal firms harder while the majority of economic activity sits outside the system.”
Government’s SME support programmes strengthen this argument.
Treasury officials argue that formalisation and tax compliance should increasingly be tied to access to finance, markets and government support — a model used successfully in countries such as Rwanda and Mauritius.
In 2023, the government disbursed US$5,3 billion to support small and medium scale enterprises last year using the Small and Medium Enterprises Development Corporation, the Zimbabwe Women Microfinance Bank, the Zimbabwe Community Development Fund and the Women Development Fund.
Across Southern Africa, fiscal pressures are intensifying. Slower global growth, climate-related shocks and rising debt servicing costs have forced governments to seek more reliable domestic revenue streams.
Zimbabwe’s strategy reflects this regional reality. By focusing on SMEs — the most dynamic yet under-taxed segment of the economy — authorities are attempting to align revenue mobilisation with inclusive growth.
The 2026 Budget reinforces this logic by avoiding aggressive new taxes and instead focusing on compliance efficiency, digitalisation and behavioural change.
The push to ease SME compliance is not about lowering standards, but about widening opportunity. In an economy where small businesses are no longer peripheral but central, fiscal systems must adapt.
As the 2026 Budget takes effect, Zimbabwe’s revenue strategy sends a clear message: growth, compliance and development are not competing goals — they are mutually reinforcing.
The success of ZIMRA’s reforms will ultimately depend on execution. Simplification must be real, not rhetorical. Digital platforms must work reliably. Enforcement must remain firm but fair.
If successful, Zimbabwe could offer a regional case study in how to transition from a narrow, enforcement-heavy tax system to one built on participation and trust.
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Business
Zimbabwe’s Investment Agenda Enters a New Chapter as Tagwirei Takes Economic Development Portfolio
Published
10 hours agoon
October 12, 2026
The swearing-in of Kudakwashe Tagwirei as Minister of Economic Development and Investment Promotion places investment mobilisation, industrial expansion and the conversion of economic potential into tangible results at the centre of a newly defined government portfolio.
Zimbabwe’s economic development agenda entered a new phase on Monday, 12 October 2026, when President Emmerson Mnangagwa swore in Senator Dr Kudakwashe Regimond Tagwirei as Minister of Economic Development and Investment Promotion at State House in Harare. The ceremony followed the President’s appointment of Tagwirei to the portfolio on 9 October, alongside the reassignment of Professor Mthuli Ncube to the standalone Ministry of Finance.
The reorganisation separates economic development and investment promotion from the Finance Ministry, creating a distinct ministerial portfolio whose mandate places the attraction of capital, the advancement of economic activity and the implementation of national development priorities at the forefront.
For Zimbabwe, the significance of this change will ultimately depend on how effectively the new ministry translates national ambition into commercially viable projects, productive industries and improved economic opportunities for citizens.
From investment interest to investment delivery
Zimbabwe is not starting from a blank slate. The country has substantial mineral resources, agricultural potential, an established industrial base, a strategic position within Southern Africa and opportunities to expand regional trade.
The challenge has been to convert these advantages into a larger and more diversified productive economy.
According to figures reported by the Zimbabwe Investment and Development Agency (ZIDA), the country approved 378 investment licences valued at more than US$3 billion during the first half of 2026. Mining and manufacturing accounted for significant portions of the investment pipeline. These figures reflect approved investment proposals, however, and should not be confused with capital already deployed or projects fully operational.
This distinction is central to the new ministerial assignment.
An investment licence is an important first step, but its economic value becomes tangible when financing is secured, construction begins, equipment is installed, production starts and workers are employed.
The opportunity before Minister Tagwirei is to help strengthen the systems that move projects through these stages. Closer coordination between investment agencies, regulators, local authorities, financial institutions and infrastructure providers could help investors navigate approval processes, resolve implementation bottlenecks and bring viable projects to market more efficiently.
Such an approach would shift the national conversation from the value of investment announced to the value of investment realised.
A mandate aligned with Vision 2030
The appointment comes as Zimbabwe implements the National Development Strategy 2 (NDS 2), covering 2026–2030. The strategy seeks to accelerate progress towards the country’s ambition of becoming a prosperous and empowered upper-middle-income society by 2030. It emphasises economic transformation, infrastructure development, agricultural productivity, innovation, job creation and stronger international economic engagement.
This framework provides a clear context for the new ministry.
Economic development is not simply a matter of attracting more money into the country. It involves directing investment towards activities that expand productive capacity, strengthen domestic supply chains, increase exports and create sustainable employment.
For Minister Tagwirei, alignment between investment promotion and NDS 2 could provide an opportunity to connect national priorities with the commercial interests of domestic and international investors.
The most consequential investments will be those that create enduring economic value: factories that manufacture locally, mines that develop downstream processing capacity, agricultural enterprises that support agro-processing, and infrastructure projects that reduce the cost of doing business.
The task is to ensure that investment serves as a catalyst for broader economic transformation rather than remaining an isolated collection of individual projects.
Industrialisation: unlocking value beyond raw materials
Zimbabwe’s natural resource endowment presents an important opportunity for economic expansion, particularly when extraction is linked to domestic processing and manufacturing.
In mining, this means creating stronger connections between mineral production and downstream industries. In agriculture, it means moving further along the value chain, from primary production towards food processing, packaging, storage and export-ready products.
The potential benefits extend beyond the industries themselves. A growing manufacturing sector can create demand for transport, engineering, maintenance, packaging, financial services and professional expertise.
For smaller enterprises, stronger domestic value chains can create opportunities to supply larger businesses, participate in procurement programmes and expand into new markets.
The ministry can contribute by helping to coordinate investment opportunities across these interconnected sectors, identifying gaps in industrial capacity and supporting the development of projects with credible commercial prospects.
Energy reliability, transport infrastructure, access to finance and predictable regulation will remain critical to this process. Investment promotion is most effective when the environment in which investors operate supports production, competitiveness and long-term planning.
Building investor confidence
Investment decisions are influenced by more than the availability of natural resources or the size of a potential market. Investors also consider policy consistency, currency and financial risks, the predictability of regulations, the enforceability of contracts and the transparency of public institutions.
Zimbabwe’s ability to attract sustained investment will therefore depend on continued efforts to strengthen these fundamentals.
A credible investment-promotion programme must communicate opportunities clearly while providing investors with reliable information, consistent administrative processes and confidence that published rules will be applied fairly.
It must also demonstrate that investment opportunities are accessible to a broad range of legitimate participants, from major international institutions and regional investors to Zimbabwean entrepreneurs and smaller domestic businesses.
For the new minister, building confidence will require engagement across the investment community and close coordination with the institutions responsible for economic policy, regulation and implementation.
This is particularly important as Zimbabwe seeks to deepen regional trade, attract new productive capital and strengthen its position within African and global value chains.
The international investment community will judge progress not only by the announcements made by government, but also by the consistency of policy, the transparency of processes and the results delivered on the ground.
The significance of business leadership in public service
Tagwirei enters the portfolio with a background in business, including interests associated with Sakunda Holdings across sectors such as energy and agriculture. His experience in the commercial environment may offer familiarity with the practical considerations involved in operating businesses, mobilising resources and assessing investment opportunities.
That experience could be relevant to a portfolio concerned with the relationship between policy and enterprise. Understanding the challenges faced by investors can help inform discussions about project financing, infrastructure constraints, regulatory procedures and the conditions required for commercial activity to expand.
However, public office carries responsibilities that differ fundamentally from those of private enterprise. The ministerial role requires decisions to serve the national interest, with public confidence supported by accountability, transparent procedures and the consistent application of the law.
The opportunity is to apply commercial understanding within a framework of public service, ensuring that investment promotion is conducted in a manner that strengthens confidence in Zimbabwe’s institutions and supports fair economic participation.
For a country seeking to expand its investment base, the credibility of the process is as important as the opportunities being promoted.
What could this mean for Zimbabwean businesses?
A more effective investment-promotion framework could have benefits that extend well beyond large corporations.
For small and medium-sized enterprises, new industrial and infrastructure projects can create opportunities to supply goods and services, develop specialist capabilities and establish longer-term commercial relationships.
For farmers, investment in processing, storage, logistics and agricultural technology can help improve market access and reduce losses along the supply chain.
For young people entering the labour market, new productive enterprises can create demand for technical skills, professional services and entrepreneurship.
For established manufacturers, a more predictable business environment can support decisions to expand capacity, upgrade equipment and develop new products.
These outcomes are not automatic. They depend on the quality of investment, the strength of local supply chains, the availability of skills and the ability of businesses to compete. Nevertheless, they provide a practical way of assessing whether investment promotion is delivering benefits beyond headline figures.
The public interest lies in ensuring that economic growth generates opportunities across sectors, provinces and communities.
The priorities that will define the next chapter
As the ministry begins its work, several priorities are likely to be central to its contribution to the national development agenda.
First, converting approved investments into operating projects. Greater attention to implementation milestones, project financing and the removal of administrative bottlenecks could help narrow the gap between investment approvals and realised capital.
Second, strengthening coordination across government. Investors often require decisions and services from several institutions. Better coordination can help reduce uncertainty and improve the experience of doing business.
Third, prioritising productive and export-oriented investment. Projects that expand manufacturing, support mineral beneficiation, strengthen agro-processing and develop competitive services can contribute to diversification and foreign-exchange generation.
Fourth, broadening participation in economic growth. Local suppliers, small businesses, young entrepreneurs and skilled professionals should have opportunities to participate in the commercial activity generated by new investments.
Fifth, strengthening transparency and accountability. Clear investment criteria, predictable regulations and measurable performance indicators can help demonstrate that opportunities are being pursued in the national interest.
Together, these priorities offer a practical framework for translating the ambitions of NDS 2 into measurable economic outcomes.
Measuring success by results
Minister Tagwirei’s appointment creates an opportunity to sharpen the focus on investment delivery and economic development. The scale of that opportunity should not obscure the complexity of the task.
Zimbabwe’s economic prospects will be influenced by domestic policy choices, global market conditions, access to finance, infrastructure capacity and the competitiveness of local industries. No single ministry can resolve all these challenges independently.
The new portfolio can nevertheless play an important coordinating role by bringing investors, government institutions and productive sectors around a common set of national priorities.
Over time, progress should be assessed through evidence: the amount of investment actually deployed, projects completed, productive capacity added, exports generated, businesses supported and sustainable jobs created.
These are the indicators that connect economic policy to the lived experience of Zimbabweans.
A new chapter, with results to deliver
President Mnangagwa’s decision to establish a distinct economic development and investment promotion portfolio places renewed emphasis on the relationship between investment, production and national development.
For Tagwirei, the immediate task is to turn that mandate into a clear programme of action, working with government institutions and the private sector to improve the conditions for productive investment.
The opportunity is significant. Zimbabwe has resources to develop, agricultural potential to unlock, industries to expand and entrepreneurs capable of creating new enterprises. Converting these strengths into sustained prosperity will require sound policy, effective institutions, investor confidence and consistent implementation.
The measure of this new chapter will not be the appointment itself, but what follows: investments realised, industries strengthened, opportunities expanded and economic value created for the nation.
For Zimbabwe, that is the promise against which the work of the Ministry of Economic Development and Investment Promotion will be judged.
Editorial note: This article is based on publicly reported appointment and swearing-in details, published investment-approval figures and Zimbabwe’s NDS 2 development framework. Projections concerning the ministry’s potential impact are analysis, not claims that those outcomes have already been achieved.
The Business Diary – Telling Zimbabwe’s Business Story | “We Mean Business”
Business
ZSE and NVCCZ Forge Strategic Partnership to Build Venture-Backed SME Pipeline for ZEEX
Published
4 months agoon
June 26, 2026
Harare, Zimbabwe – June 2026 – In a significant development for Zimbabwe’s entrepreneurial and capital markets ecosystem, the Zimbabwe Stock Exchange (ZSE) and the National Venture Capital Company of Zimbabwe (NVCCZ) have signed a Memorandum of Understanding (MOU) aimed at creating a structured pathway for startups and small-to-medium enterprises (SMEs) to access capital markets through the Zimbabwe Entrepreneurship Exchange (ZEEX).
The partnership marks a major step toward bridging the gap between venture capital financing and public market participation, providing entrepreneurs with a clear roadmap from startup funding to long-term growth and investment opportunities.
Creating a Growth Journey for Zimbabwean Enterprises
Historically, venture capital funding and capital markets have operated independently, leaving many promising businesses without a clear route to scale beyond their initial funding stages. Through this partnership, ZSE and NVCCZ seek to change that by establishing a continuum of support that combines financing, governance, compliance readiness, and market access.
The collaboration will focus on identifying high-potential startups and SMEs already supported by NVCCZ and preparing them for eventual participation on ZEEX, Zimbabwe’s newly approved digital capital market platform.
Key Areas of Collaboration
1. Pipeline Development
The two institutions will jointly identify venture-backed businesses with strong growth potential and develop structured graduation pathways that guide them from early-stage financing to public capital market participation. Clear eligibility standards and quality benchmarks will be established to support this transition.
2. Co-Financing and Blended Finance
The partnership will explore innovative financing models that combine venture capital and public market funding. This includes co-investment opportunities and blended finance mechanisms that leverage both public and private sector capital to accelerate business growth.
3. Capacity Building
Recognising that access to capital alone is not enough, the partners will offer training programmes focusing on corporate governance, financial reporting, investor readiness, and compliance with ZEEX listing requirements. Selected enterprises will also receive advisory support to strengthen their readiness for market participation.
4. Market Development
Joint awareness campaigns, investor roadshows, SME financing conferences, and sector-specific financing platforms will be developed to deepen understanding of capital market opportunities among entrepreneurs and investors alike.
5. Product Innovation
The agreement also opens the door for the development of innovative financial products tailored to growth-stage businesses, including SME bond programmes, sustainability-linked instruments, structured SME funds, and alternative digital listing platforms.
Strengthening Zimbabwe’s Entrepreneurial Ecosystem
Speaking on the partnership, ZSE Holdings Group CEO Justin Bgoni highlighted the importance of creating a structured connection between venture capital and public markets.
He noted that entrepreneurs receiving venture capital support can now see a credible pathway toward public market participation from the outset, providing greater certainty and long-term planning opportunities.
NVCCZ Chief Executive Officer Tinotenda Kambasha described the partnership as a milestone for Zimbabwe’s innovation ecosystem, emphasizing that successful venture investing requires support throughout the entire growth journey of a business.
According to Kambasha, the collaboration will provide venture-backed enterprises with strategic exit opportunities while promoting investor participation, improving liquidity, and enabling the recycling of capital into future generations of innovative Zimbabwean businesses.
What This Means for Zimbabwe
The partnership arrives at a critical time when Zimbabwe is seeking new ways to stimulate entrepreneurship, attract investment, create employment, and accelerate economic growth.
By connecting startups, SMEs, investors, venture capital providers, and the capital markets through ZEEX, the initiative is expected to strengthen financial inclusion, support business formalisation, and create sustainable pathways for enterprise growth.
As ZEEX moves closer to full operationalisation, the growing number of institutional partnerships being secured by ZSE demonstrates increasing confidence in the platform’s potential to transform how Zimbabwean businesses raise capital and how investors participate in the country’s economic development.
For entrepreneurs and investors alike, the ZSE-NVCCZ partnership represents an important step toward building a more vibrant, innovative, and investment-ready Zimbabwean economy.
Business
A Leader’s Next Chapter: Justice Matsatsira Appointed to the Board of Directors of Manica Diamonds Football Club
Published
4 months agoon
June 17, 2026
The Business Diary proudly celebrates a significant milestone in the professional journey of its Chief Executive Officer and Publisher, Justice Matsatsira, following his appointment to the Board of Directors of Manica Diamonds Football Club.
This prestigious appointment reflects Mr. Matsatsira’s growing influence as a business leader, strategist, and advocate for sustainable institutional growth. It is a recognition of his unwavering commitment to excellence, visionary leadership, and his continued contribution to Zimbabwe’s economic and social development.
Over the years, Justice Matsatsira has established himself as a respected voice within Zimbabwe’s business community. Through his leadership of The Business Diary, he has played a pivotal role in promoting entrepreneurship, fostering dialogue on economic development, and providing a platform that highlights business opportunities, innovation, and thought leadership across various sectors.
His appointment to the Manica Diamonds Football Club Board comes at a time when football clubs are increasingly embracing professional governance structures and strategic leadership to drive long-term success both on and off the field. Mr. Matsatsira brings with him extensive experience in business development, corporate communications, stakeholder engagement, and strategic management—qualities that will undoubtedly add value to the club’s vision and future aspirations.
Speaking on the significance of leadership, Justice Matsatsira often emphasizes that true leadership is measured not by title, but by impact.
“Leadership is not about position. It is about impact, influence and inspiration.”
This philosophy has guided his professional journey and continues to shape the way he approaches business, community development, and organizational growth.
At The Business Diary, we view this appointment as more than a personal achievement. It is a reflection of the confidence that institutions place in leaders who consistently demonstrate integrity, professionalism, and the ability to deliver meaningful results. We are confident that Justice Matsatsira’s strategic insight and commitment to excellence will contribute significantly to the continued growth and success of Manica Diamonds Football Club.
As he embarks on this exciting new chapter, we extend our heartfelt congratulations and best wishes. We celebrate not only the achievement itself, but the leadership, dedication, and vision that made it possible.
Congratulations, Justice Matsatsira, on your appointment to the Board of Directors of Manica Diamonds Football Club. May this new role bring continued success and create even greater opportunities to inspire positive change.
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