NEARLY 87% of Zimbabwe’s services businesses found the financial climate non-conducive in the first quarter of 2025, painting a grim picture of an economy still choking under instability, a new report shows.
At present, companies are drowning under severe taxes, red tape, exchange rate volatility, bureaucratic processes, growing debt and poor utility services delivery.
Consequently, an increasing number of companies are either closing or entering corporate rescue.
The report comes at a time when the economy is mostly a services sector financial system, owing to the manufacturing sector’s contribution to the economy shrinking to just 9%, from a peak of 23%, according to statistics from the Confederation of Zimbabwe Industries.
“Overall, 13,4% of respondents considered the financial situation as good during 1st quarter 2025,” the Zimbabwe National Statistics Agency (ZimStat) said in its new Business Tendency Survey Services Sector First Quarter 2025 Report.
“The proportions of respondents who shared the same sentiments ranged from 4,5% in the construction sector to 20% in the financial and insurance sector.
“Negative balances of opinion were observed across all sectors, except for the financial and insurance sector.”
ZimStat said excluding normal seasonal variations, 59,1% of respondents in the construction sector considered their companies’ level of total order books to be below normal for the quarter.
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“During the quarter under review, 50,3% of respondents in all sectors combined, considered the general business climate as satisfactory,” ZimStat said.
“The sectoral analysis showed over 50% of respondents in financial & insurance services and construction, expressing similar sentiments.”
The majority of firms continue to complain that access to credit continues to remain poor, amid hawkish monetary and fiscal policies.
“Overall, 48,7% of respondents considered access to bank credit as normal during first quarter 2025,” ZimStat said.
“The sectoral analysis showed proportions of respondents who viewed access to credit by their establishments as being easy, ranging from 3,2% in accommodation and food services to 45,2% in transport and storage.”
The report further revealed that the wholesale and retail sectors were not adequately stocked, raising questions on the possibility of product shortages in the market.
“Excluding normal seasonal variations, 61,7% of respondents in the wholesale and retail trade; repair of motor vehicles and motorcycles sector considered their establishments’ current stock levels to be adequate for 1st quarter 2025,” ZimStat said.
The ZimStat survey was conducted on 408 establishments and for the quarter under review, and the response rate was 53%.
“Key indicators derived from the survey comprise the confidence index and balance of opinion or net balance,” the national statistics agency said.
ZimStat said two sectors recorded positive Confidence indices for first quarter 2025, namely accommodation and food services with 6.5, and financial and insurance recording 24.4.
“The confidence index for construction sector further dropped from -31 for fourth quarter 2025 to -36,4 for first quarter 2025,” Zimstat said.
“Competition was cited as a major constraint to business expansion by respondents in all the five sectors, i.e. construction, accommodation & food services, transportation & storage, wholesale & retail trade: repair of motor vehicles & motorcycles and financial & insurance.”
