Market watchers have predicted a gloomy 2024 outlook amid a galloping exchange rate, steep taxation and an ever tanking economy, NewsDay can report.

As usual, this is heavily impacting on ordinary citizens whose disposable incomes have been eroded as they bear the exchange rate instability.

Zimbabwe is increasingly experiencing market turbulence with the gap between the official and parallel markets exchange rates widening each day.

The year 2023 saw some exchange rate stability towards the end of the first half after government put in place stern economic measures.

But the market warned back then that the stability was “managed” and only temporary. The concern appears to be proving to be true.

The exchange rate started rising in the third quarter of 2023 and is fast gaining momentum as new government tax measures fuel its upward spike.

trading partner and if its economy sneezes, the ripple effects will be felt north of the Limpopo.

Investment analyst Enock Rukarwa said the cost of living was continuing to escalate.

“It’s worrying that the parity between the formal exchange rate and alternative exchange rate continues to widen. As the local currency continues to depreciate against the US dollar, the cost of living scales up on the Zimdollar incomes,” he said.

“The most direct impact is an increase in the prices of goods and services which ultimately leads to reduction in consumer purchasing power.”

Economic analyst Victor Bhoroma, however, said government could do a lot to stabilise the currency and achieve sustainable economic growth in 2024.

He said it was crucial for the government to address the issues of inflation and currency stability first.

“There are five key issues that the authorities need to attend to. The bedrock of any economy in terms of economic growth is consumption. So how does the government ensure that there is stable consumption and it’s very much related to inflation or disposable incomes, probably income, it could be at corporate level or household income,” Bhoroma said.

“So how do you ensure that incomes are stable? Address the issue of inflation. You have to address currency stability. So that’s the first thing that government has to address. Without it, some of the reforms or even some of the blueprints that look good on paper will not be able to yield any positive results in terms of economic growth.”

Bhoroma urged government to use the national budget and various other fiscal policies to ensure that industry players have incentives to value-add.

For economic growth, he believes access to market is important and this can only improve countrywide if there is good infrastructure.

“So going back to the drawing board, Zimbabwe has to have a private-public partnership act which is very clear in terms of how sponsors, how financiers can be able to get their return on investment from capital projects.

“So, if you look at major infrastructure projects such as your Beitbridge-Chirundu Cighway, Beitbridge-Victoria Falls and various other highways, it could be airports and all that, there is no need for the government to use public resources in financing those,” he added, while urging the government to improve the ease of doing business environment and also to incentivise tobacco processors value-add their tobacco for export.