The US$100k Chasm: ZSE Aims to Bridge It

By Tinotenda Bhunu

HARARE – ZIMBABWE does not suffer from a shortage of entrepreneurs. If entrepreneurship alone were enough to create prosperity, Zimbabwe would be one of Africa’s wealthiest economies. Every day, Zimbabweans identify opportunities, take risks and start businesses. From food processing and furniture manufacturing to software development and agribusiness, the entrepreneurial spirit is alive and well.

Yet, despite this abundance of enterprise, Zimbabwe has produced relatively few companies that have grown into large national or regional businesses over the past two decades. This raises an important question. If we have no shortage of entrepreneurs, why do so few businesses make the journey from a small workshop to a factory, from a family business to a listed company?

The answer lies in what I call the US$100,000 problem.

Imagine an entrepreneur who started a small company making cooking oil. The business has survived its difficult early years. It has loyal customers, supermarkets are placing larger orders, and demand is growing. The owner does not need another US$5,000 from relatives to keep the business alive. What the business now needs is about US$100,000 to purchase modern equipment, expand production, hire more workers and improve packaging.

Ironically, this is where many Zimbabwean businesses stop growing.

Banks often require collateral that many growing businesses simply do not possess. Friends and family have already contributed what they can. Venture capital has traditionally focused on businesses in their infancy, while the Zimbabwe Stock Exchange has been designed primarily for much larger and more established companies.

The entrepreneur is left in an economic no-man’s-land. The business does not fail. It simply remains small.

This is not just a problem for entrepreneurs. It is a problem for Zimbabwe’s economy.

When economists talk about Gross Domestic Product (GDP), the discussion often revolves around percentages, forecasts and quarterly figures. That language can make GDP sound distant from everyday life. In reality, GDP is nothing more than the value of everything an economy produces. It grows when businesses produce more goods and services than they did yesterday.

Consider what happens if that cooking oil company finally secures the capital it needs. Production doubles. Twenty new employees are hired. Local farmers sell more sunflower seed. Transport companies make more deliveries. Packaging manufacturers receive larger orders. Supermarkets stock more locally produced products, while government collects more tax revenue from a growing formal business.

Nothing magical has happened.

One business simply became larger.

Now imagine that story repeated not once, but thousands of times across Zimbabwe. Suddenly, GDP is no longer an abstract economic statistic. It becomes the combined result of thousands of businesses expanding their productive capacity.

This is why the recent Memoranda of Understanding signed by the Zimbabwe Stock Exchange (ZSE) with the National Venture Capital Company of Zimbabwe (NVCCZ) and TN Asset Management deserve attention. Most commentary has focused on the agreements themselves. I believe that misses the more important story.

These partnerships are attempting to build something Zimbabwe’s economy has lacked for many years: a bridge.

NVCCZ can help identify businesses with genuine growth potential and provide early-stage capital. TN Asset Management can help those businesses strengthen their governance, improve financial reporting and become attractive to investors. Through the Zimbabwe Entrepreneurship Exchange (ZEEX), those same businesses may eventually gain access to a broader pool of investment capital that is previously out of reach.

Whether this model succeeds remains to be seen. Zimbabwe has signed many MOUs before, and good intentions alone do not create economic growth. Markets are built on trust, sound institutions and consistent execution—not announcements.

However, the significance of these partnerships lies in the economic problem they are trying to solve. Zimbabwe does not merely need more people starting businesses. It needs a financial system capable of helping successful businesses become larger, more productive and more competitive.

This distinction matters because there is a fundamental difference between an economy dominated by survival and one driven by growth. A country can have millions of entrepreneurs and still experience disappointing GDP growth if those businesses never expand beyond micro-enterprises. Prosperity is created when businesses invest, innovate, increase production and employ more people over time.

Perhaps we have been measuring success using the wrong yardstick. Every year we celebrate the number of SMEs that are registered or the number of businesses that are started. Those figures are encouraging, but they tell only half the story. The more important question is how many of those businesses become medium-sized firms, how many become national champions, and how many eventually compete beyond Zimbabwe’s borders.

That is the real test of an economy.

The recent partnerships between ZSE, NVCCZ and TN Asset Management will not be judged by the number of documents signed or photographs taken. They will be judged by something far more meaningful: whether they help shorten the journey from a promising business idea to a productive company that creates jobs, expands industries and contributes to national output.

Because, in the end, economic growth is not created by MOUs.

It is created when a business that needed US$100,000 finally finds it and uses it to build Zimbabwe’s next industry.

Tinotenda Bhunu is an economist by profession. LinkedIn: https://www.linkedin.com/in/tinotenda-bhunu-114645208?utm_source=share&utm_campaign=share_via&utm_content=profile&utm_medium=android_app