Informal Trade Powers Zimbabwe’s Economy, But Formalisation Remains Elusive

Zimbabwe’s informal economy accounts for nearly two-thirds of national activity, yet formalisation efforts remain strained by mistrust, bureaucracy, and limited incentives for vendors and cross-border traders (image source)

HARARE – Zimbabwe’s informal economy continues to dominate the national economic landscape, accounting for an estimated 64.7% of total economic activity in 2025, according to World Economics and the Zimbabwe National Chamber of Commerce (ZNCC). Despite its scale, efforts to formalize the sector remain slow and fragmented.

From Mbare Musika’s bustling vegetable stalls to the cross-border traders at Beitbridge and Chirundu, informal commerce is the lifeblood of millions. With formal unemployment hovering above 80%, many Zimbabweans rely on vending, cross-border trading, and home-based enterprises to survive. “The informal sector is not just a fallback – it’s the primary economy for most Zimbabweans,” said Thabisani Dube, a researcher with the ZNCC.

Yet, the sector operates largely outside the tax net, depriving the government of much-needed revenue. ZIMRA has launched several campaigns to register informal traders, but uptake remains low due to mistrust, red tape, and lack of incentives. “Formalisation must come with benefits – access to credit, infrastructure, and protection,” said Dube. “Otherwise, it’s just another tax burden.” A 2025 policy brief by the Ministry of Women’s Affairs and SMEs revealed that over 70% of informal traders are women, many of whom operate without licenses or fixed premises. These traders face frequent harassment, confiscation of goods, and limited access to markets.

The government has piloted “Smart Markets” in Harare and Bulawayo – digitally managed vending spaces with sanitation, security, and mobile payment systems. However, rollout has been slow due to funding constraints and political interference. “We need to stop criminalizing survival,” said Rudo Mupfumira, a vendor at Mupedzanhamo Market. “Give us proper spaces and we’ll pay our dues.”

Cross-border trade, particularly with South Africa, Zambia, and Mozambique, remains a key pillar of the informal economy. Traders import groceries, clothing, and electronics, often using informal transport networks and parallel currency markets to navigate border bureaucracy. The African Continental Free Trade Area (AfCFTA) presents an opportunity to integrate informal traders into regional value chains. However, experts warn that without simplified customs procedures and financial inclusion, small traders will remain marginalized. “AfCFTA must work for the smallest players, not just big corporates,” said economist Dr. Gift Mugano.

Formalising the informal sector is a key pillar of Zimbabwe’s National Development Strategy 1 (NDS1), but progress has been uneven. Analysts say a coordinated approach involving local authorities, financial institutions, and civil society is essential to unlock the full economic potential of the majority.