Drive growth through business networks and technology

Small and medium-sized enterprises (SMEs) are a pillar of Zimbabwe’s economy, constituting 90% of all businesses.
These firms nonetheless face many challenges. High inflation, exchange-rate instability and excessive public debt have increased production costs, reduced incentives for productivity-enhancing investment and encouraged informality in the country.

SMEs in Zimbabwe generate around 60% of gross domestic product (GDP) and more than half of employment. Their importance goes beyond conventional economic contribution as they provide livelihoods to the most vulnerable segments of the workforce. Zimbabwean small businesses employ mostly women4 and are active in rural areas,thereby enhancing social inclusion in the country.

With a business landscape shaped by many small and micro-enterprises and a multitude of informal firms, there is
a need to stimulate small business growth. Indeed, despite their prevalence and importance, SMEs tend to grow slowly, especially in a challenging economic landscape where they must focus on coping with day-to-day uncertainty rather than preparing a growth strategy.

Addressing the country’s macro-level issues is fundamental, but it must be accompanied by a plan to strengthen the
capacity of firms to move beyond survival, thus laying a solid foundation for future growth and stability. Recognizing the contribution of SMEs to economic development, the Government of Zimbabwe has put in place laws, policies, organizations and funds that support the development of the SME sector (see Box 1).

These actions are critical and must be customized as much as possible to the needs of the business. To increase their effectiveness, it is essential to identify both the bottlenecks that companies face and the areas of greatest potential that could drive the export success of the country.

To this end, the International Trade Centre (ITC) partnered with the National Competitiveness Commission (NCC) to assess the competitiveness of Zimbabwean SMEs.

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Promoting SME Competitiveness in Zimbabwe