Zimbabwe is facing a serious challenge of reviving its economy as many of its companies are stagnant and uncompetitive, according to a new report by a strategic advisory firm. The report, titled Zimbabwe 2024 Outlook & Strategy: Barbarians at the Gate, said that most firms in the country were struggling to adapt to the new world order that is characterized by production processes driven by artificial intelligence and robots.
The report said that Zimbabwe was littered with “dogs and zombie companies” that had limited cash flows, low market share, and moribund prospects. These companies were “uncompetitive survivors” and a barrier to productive growth, as they locked up capital and talent that should be available to more successful and dynamic companies in other sectors of the economy.
The report’s findings echo the sentiments of other analysts and experts who have warned that Zimbabwe’s economy needs urgent reforms and restructuring. According to the World Bank, Zimbabwe’s economic growth is projected to slow to 3.5 percent in 2024, a decrease from 4.5 percent in 2023, as agricultural output is expected to suffer from depressed global growth and the predicted erratic and below-average rainfall caused by the El Niño weather pattern.
The World Bank also noted that Zimbabwe’s economic development continued to be hampered by several challenges, such as price and exchange rate volatility, public debt arrears, policy uncertainty, and electricity shortages. Zimbabwe has been experiencing severe power cuts of up to 14 hours a day, which have affected the productivity and profitability of many businesses, especially in the manufacturing and mining sectors.
The report by Mark & Associates Consulting Group urged Zimbabwean companies to rethink their corporate structures and strategies to survive and thrive in the changing global environment. It said that companies should invest in innovation, technology, and human capital development, as well as diversify their markets and products. It also advised companies to avoid keeping “brand clowns” who masquerade as C-suite executives and who could result in historic failures.
The report also predicted that many top professionals would leave Zimbabwe or set up their establishments in 2024, taking with them brand currency, operational wisdom, and premium clients. This would worsen the problem of brain drain that has already affected the country’s human capital base. Zimbabwe is losing skilled professionals such as lecturers, engineers, medical practitioners, and accountants to mainly the United States, United Kingdom, Australia, and South Africa, among many other countries.
The report concluded that Zimbabwe’s economy had strong foundations for accelerating future economic growth and improving living standards, but it needed to address its macroeconomic challenges and structural bottlenecks. It said that Zimbabwe had excellent human capital, comparable to that of upper-middle-income economies in Sub-Saharan Africa, and abundant mineral and natural resources that could support its development objectives.
However, it warned that Zimbabwe could not afford to be complacent or resistant to change, as the world was moving fast and becoming more competitive. It said that Zimbabwe needed to embrace the opportunities and challenges of the new world order and become a leader in innovation and productivity in the region and beyond.
Source: NewsDay
