HARARE, Zimbabwe – President Emmerson Mnangagwa interrupted his annual leave on Thursday to chair an urgent meeting with senior government officials, amid an accelerating collapse of Zimbabwe’s formal retail and wholesale sector.
The crisis meeting, attended by Vice Presidents Constantino Chiwenga and Kembo Mohadi as well as Economic Ministries, comes amid closures and downsizing by major players, including Spar Zimbabwe’s Queensdale outlet, Choppies Zimbabwe’s market withdrawal, and a 60% scale-back of Mahommed Mussa’s operations.
The N. Richards Group has closed several outlets, while OK Zimbabwe’s shelves remain bare, unable to pay suppliers after the Reserve Bank of Zimbabwe mandated pricing at the official exchange rate. TM Pick n Pay, owing suppliers over US$40 million, is also under pressure. OK Zimbabwe is reportedly now restocking and poised for a rebound after the government allowed the company to adjust its pricing to mid-market rates, which will allow the retailer to settle supplier debts and replenish its stock.
Finance Minister Mthuli Ncube, in a statement released after the Mnangagwa-chaired meeting, highlighted concerns over the growing informalisation of the economy and its effects on formal businesses.
“His Excellency, the President, Dr. E.D. Mnangagwa, yesterday took time off his annual leave to chair a session on developments in the economy designed to map the way forward,” Ncube said. “The session, which also included the two Vice Presidents and all Economic Ministries, deliberated on measures Government has taken on the Economy, and developments in specific economic sectors, including the retail subsector. This culminated in additional measures being proposed.”
Ncube said while Zimbabwe had seen economic growth averaging 5.5% annually since 2021, a slowdown of 2% in 2024—largely due to an El Niño-induced drought—had impacted agriculture, electricity generation, and the broader economy. He also admitted that the informalisation of the retail and wholesale sectors was a growing challenge.
“Research and consultations indicate that some of the reasons formal businesses are experiencing distress include competition from the informal sector, poor management and poor corporate governance which have resulted in business failure in some instances. The proliferation of smuggled imports—mostly in reserved sectors—sold exclusively in USD, and the high cost of doing business, among others, also contribute to the formal sector challenges,” he said.
To combat these issues, Ncube outlined several measures, including the mandatory use of point-of-sale machines by informal traders, discouraging manufacturers from directly supplying the informal market, and the establishment of a Domestic Interagency Enforcement Team.
“Government will embark on an exercise to streamline regulatory processes, fees and charges, as well as duplication of work by Government Agencies, in order to reduce the cost of doing business,” he added.
Further measures include enforcing compliance with the Indigenisation and Economic Empowerment Act, incentivizing industrialisation, and promoting local procurement.
“Government is committed to improving the business environment, in order to curb the informalisation of the economy, as we move towards Vision 2030,” Ncube concluded.
The meeting came after Confederation of Zimbabwe Retailers (CZR) raised alarm over the dire state of formal businesses, citing an unfavorable economic environment. CZR President Denford Mutashu highlighted challenges such as the dual currency system, regulatory burdens, and punitive taxes that have pushed consumers toward the informal sector.
The Financial Intelligence Unit (FIU) has penalized companies each time they deviated from the official exchange rate, despite suppliers insisting on cash payments at prevailing parallel market rates.
The crisis reflects broader economic challenges, though insiders suggest some recovery efforts are underway. As the government scrambles for solutions, the formal retail sector remains on the edge, posing a significant risk to Zimbabwe’s economic stability.
