El Niño’s Impact Slows Growth in Zimbabwe’s Retail Sector

Economic Downturn Expected as Environmental Challenges Strain Wholesale and Retail Growth.

by Adenike Adeodun

At the recent top 200 retail and wholesale value chain leaders’ awards for 2023, Denford Mutashu, president of the Confederation of Zimbabwe Retailers (CZR), unveiled projections that Zimbabwe’s wholesale and retail sectors are expected to experience a diminished growth rate of 4.2% this year. This forecast marks a significant slowdown compared to previous years, largely attributed to the detrimental effects of El Niño, among other challenges.

During his address, Mutashu highlighted the severe repercussions of El Niño conditions, including drought, water shortages, and widespread crop failures. These environmental challenges have precipitated a critical food scarcity, affecting approximately 7.7 million people—51% of the nation’s population. Consequently, the demand for various goods is anticipated to decline as a significant portion of the populace grapples with food insecurity.

Mutashu urged stakeholders within the wholesale and retail sectors to devise innovative strategies to enhance their resilience and adaptability in these testing times. Among the suggested strategies were diversifying supplier networks, leveraging data-driven approaches for inventory management, and fostering new partnerships with local producers and distributors. These measures aim to mitigate the adverse impacts and sustain business operations amid challenging economic conditions.

In response to broader industrial goals, Mutashu also welcomed the introduction of the new Industrialisation Development Policy by the Ministry of Industry and Commerce. This ambitious policy seeks to augment the manufacturing sector’s growth by 2% annually, aiming to elevate manufacturing value-addition in Zimbabwe’s GDP to 20% by 2030, and increase manufactured exports by 10% each year. He expressed enthusiasm for the role that wholesalers and retailers are poised to play in achieving these objectives, particularly through bolstering partnerships with local manufacturers to enhance market access and distribution for domestically produced goods.

Highlighting the potential benefits, Mutashu noted, “By leveraging our extensive retail networks to showcase and promote Zimbabwean-made products, we not only support local manufacturing but also contribute to the long-term industrialisation and economic diversification of our nation.” This strategy is expected to open new avenues for growth and development within the sector, aligning with national economic goals.

Furthermore, Mutashu addressed the need for policy reforms in the realm of fiscal management, particularly advocating for the abolition of the 10% premium on official exchange rates between foreign currencies and the local currency. He argued that eliminating this premium would rectify prevailing price distortions, fostering a more transparent and efficient pricing mechanism in the market. He emphasized the importance of responsible pricing practices among CZR members, advocating for sustainability in business operations as a path to long-term success.

The CZR president also called for a comprehensive liberalisation of the exchange rate system to facilitate full price discovery and ensure that the foreign exchange system is adequately resourced to meet the requirements of the retail and wholesale sectors, along with other economic stakeholders.

Sustainability was underscored as a core component of the confederation’s vision, with a particular focus on environmental, social, and governance (ESG) priorities. Mutashu highlighted the imperative of addressing climate change and managing the collective environmental footprint of the sector. “As we continue to strengthen our social impact, we should also remain steadfast in upholding the highest standards of corporate governance, transparency, and ethical decision-making,” he remarked, underscoring the role of ethical practices in enhancing business resilience and contributing to community well-being.

The event, themed “Recognising Innovative and Resilient Value Chain Leaders for Economic Development,” celebrated the achievements of value chain leaders who have demonstrated adaptability, innovation, and determination. Through their visionary leadership, these leaders have transformed their organizations into agile, responsive, and customer-centric entities. Many have embraced digital transformation, streamlining their supply chains and enhancing inventory management, while simultaneously improving customer experiences, Mutashu concluded.


Source: Newsday

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