HARARE – The Zimbabwean government is set to introduce measures aimed at supporting the formal sector while ensuring compliance within the informal sector, Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube has announced.
The move comes in response to concerns raised by retailers over the unregulated informal sector, which they argue offers goods at lower prices due to non-compliance with statutory obligations such as registration, taxes, licensing fees, and labour laws.
Speaking in an interview in Harare, Prof Ncube attributed the pressure on formal retailers to increased informalisation of the economy and rampant smuggling.
“The informal sector is squeezing out the formal sector, and as Government, we are going to embark on an accelerated programme to ensure compliance. This includes licensing, tax payments, and selling goods at designated areas,” he stated.
Prof Ncube emphasised that formalising the informal sector is essential to ensure fair competition. In addition, he highlighted ongoing government efforts to curb smuggling at border posts, which has fuelled informal trade and made competition difficult for formal businesses.
“We are committed to supporting formal retailers in weathering this storm of fierce competition. Measures will soon be announced and implemented to bolster the formal sector while ensuring the informal sector abides by tax, licensing, and registration laws,” he said.
As part of these efforts, the Zimbabwe Revenue Authority (ZIMRA) has intensified a multi-agency operation targeting smuggling and unethical business practices. So far, goods valued at approximately US$2.4 million have been impounded, with dozens of vehicles, including cross-border buses and haulage trucks, seized alongside illicit goods such as foodstuffs and second-hand clothes.
Meanwhile, Zimbabwe National Chamber of Commerce (ZNCC) president Tapiwa Karoro echoed the government’s concerns, stating that addressing economic pressures and bridging disparities between the formal and informal sectors is crucial.
“The growth of the informal sector, where vendors sell groceries outside supermarkets and clothes outside retailers like Edgars, undermines formal businesses. These traders operate with fewer regulatory costs, placing formal retailers at a disadvantage,” Karoro said.
ZNCC has proposed key policy recommendations, including liberalising the goods market, introducing a more flexible exchange rate, reducing tax burdens and licensing costs for formal businesses, and providing incentives for informal traders to register. Additionally, improving access to affordable financing for businesses has been suggested to sustain operations and drive growth.
Karoro emphasised that constructive dialogue and coordinated action are needed to restore stability to the retail sector and the broader economy.
With the government poised to implement these measures, stakeholders are optimistic that fair competition and a level playing field will be restored across Zimbabwe’s economic landscape.
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