Staff Reporter

Government is set to roll out a series of policy measures aimed at supporting formal businesses while ensuring that the informal sector complies with legal requirements such as taxation, licensing, and labour laws, Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube has revealed.

This development comes amid growing concerns from formal retailers, who argue that informal traders are operating without statutory obligations like taxes and registration, allowing them to offer lower prices and gain an unfair competitive edge.

Speaking in an interview with the media, yesterday, Professor Ncube acknowledged the mounting pressure on formal businesses due to the expansion of the informal sector and rampant smuggling.

“The informal sector is really 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 designated trading areas. Compliance is a big issue, and we need to formalise the informal sector so that it operates under the same rules as formal businesses,” he said.

Apart from tackling informality, border control operations have been ramped up to curb smuggling, which has worsened the situation for formal businesses.

“We also stand ready as Government to support formal retailers in weathering this storm. Measures will be announced to support the formal sector while ensuring the informal sector complies with tax, licensing, and registration provisions,” Professor Ncube added.

So far, the Zimbabwe Revenue Authority (ZIMRA) has impounded smuggled goods worth approximately US$2.4 million in a multi-agency crackdown targeting importers and cross-border transporters engaging in illegal trade. This operation has resulted in the seizure of dozens of vehicles, including buses and haulage trucks, as well as the confiscation of 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 disparities between the formal and informal sectors was a step in the right direction.

“The growth of the informal sector, where vendors sell groceries in front of supermarkets and clothes outside established retailers like Edgars, undermines formal businesses. These traders face fewer regulatory and cost burdens, placing formal players at a disadvantage,” Karoro said.

Karoro stressed the need for a collaborative approach between businesses and the Government to address the growing challenges facing the retail sector. He highlighted several key policy recommendations aimed at creating a fair and competitive business environment.

“We need to liberalize the goods market and ensure a flexible exchange rate to promote fair competition. Additionally, streamlining taxes and licensing requirements will reduce operational costs for formal businesses. Creating incentives for informal traders to formalize while enforcing fair market practices is also crucial. Furthermore, improving access to affordable financing will help businesses sustain operations and expand,” he said.

Karoro emphasized that constructive dialogue and coordinated action between stakeholders would be essential in restoring stability to the retail sector and strengthening the broader economy.

With the Government moving to enforce compliance in the informal sector while supporting formal businesses, the economy is set for a more balanced playing field. These measures, coupled with efforts to curb smuggling and streamline regulations, could help restore stability, enhance revenue collection, and ensure sustainable growth in Zimbabwe’s business landscape.