Industry raises alarm over high rates and rentals

Industry leaders have raised alarm over the high rates and rentals charged by local authorities, warning that the trend is threatening the viability of businesses and undermining government efforts to improve the ease of doing business.

This comes as the government is implementing reforms aimed at reducing levies, licences, fees, and permits across 12 key sectors to simplify processes and support economic growth.

During a recent online webinar hosted by the Public Policy and Research Institute of Zimbabwe (PPRIZ), Confederation of Zimbabwe Industries (CZI) Matabeleland Chapter president Stephen Ncube urged government to intervene, noting that local authority charges, particularly water tariffs, were stifling business.

"On the issue of the Zimbabwe National Water Authority (Zinwa), we have seen a development that is quite welcome in terms of a zero charge on the water to farmers. My contribution is that if this can be extended to the local authorities. We have been at loggerheads with a local authority in terms of their cost build-up of water charges. One of the issues that we saw which is problematic in terms of their costing, is obviously the cost of raw water," he said.

Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland Chapter past vice-president and businessman Louis Herbst echoed these concerns, pointing to high rentals as another obstacle for businesses.

"The burden of high rentals and rates imposed by local authorities and landlords is a pressing concern for many businesses, potentially stifling growth and sustainability. While we acknowledge the authorities rely on these revenues to fund essential services and infrastructure, it's crucial to strike a balance that supports both the business community and the broader community's needs," Herbst said.

Bulawayo Chamber of SMEs vice-chairperson Sithabile Bhebhe added that the issue was particularly dire for small businesses. She noted that steep rentals charged by property developers had forced many micro, small and medium enterprises (MSMEs) out of the central business district (CBD).

"Most premises in the CBD are too expensive and a lot of shops have been closed as people move out due to high rentals. MSMEs are then forced to operate outside, where they are exposed to the vagaries of harsh weather," she said.

A snap survey revealed that rentals for shop space in the CBD now range from US$200 for shared spaces, US$400 for smaller outlets, to over US$1 000 for larger or prime spaces.

Industry players warned that unless local authority rates and rentals are reviewed, the government's broader economic recovery efforts could be undermined.