The Confederation of Zimbabwe Retailers (CZR) has raised alarm over the continued collapse of the country’s formal retail and wholesale sector, blaming the crisis on an unforgiving economic environment and unfavorable regulatory policies.
Speaking to Great Dyke News, CZR President Denford Mutashu highlighted the recent closure of major retail outlets, including branches under the N. Richards Group, the shutdown of Queensdale Spar, and Choppies Zimbabwe’s exit from the market. Mahommed Mussa has also significantly reduced its shop space by 60 percent, further illustrating the growing struggles faced by formal businesses.
He expressed concern over the increasing dominance of the informal sector, which is thriving due to its ability to operate outside statutory obligations such as taxes, licensing fees, and labor laws.
This has created an uneven playing field, making it nearly impossible for formal businesses to compete effectively. At the same time, the dual currency system has exacerbated challenges, with retailers required to accept the ZiG while their key operational expenses, such as rent and fuel, remain pegged in US dollars.
The high cost of doing business is further compounded by punitive banking charges, including the Intermediated Money Transfer Tax (IMTT), which is discouraging electronic transactions and driving more consumer activity into the informal market.Mutashu also criticized the excessive regulatory burden placed on formal businesses, pointing out that retailers are subject to over 30 different licensing and compliance requirements.
According to CZR, this overload is eroding business viability and driving more players out of the formal economy.In response to the crisis, CZR has called on President Emmerson Mnangagwa’s administration to take urgent action to rescue the sector.
It has urged the government to prioritize the formalization of informal traders to ensure fair competition and tax compliance. The association is also advocating for the reduction of excessive licensing fees and regulatory requirements that are strangling formal businesses.
Additionally, it is pushing for financial relief measures to help businesses cope with the dual currency challenges and high operational costs.Mutashu emphasized that without immediate intervention, more retailers and wholesalers will be forced to shut down, leading to further job losses and economic instability.
A recent survey by the Zimbabwe Statistics Agency (ZimStat) for Q3 2024 reveals a bleak outlook for the retail sector, with over half (51%) of retailers reporting stock levels “below normal” and 57.4% describing the business environment as “bad.” Financially, 62.4% of retailers said their situation was “bad,” and the confidence index, reflecting factors like finances, orders, stock, and employment, fell to -6.9 from -5.6 in Q2, highlighting ongoing struggles within the sector amid tough economic conditions.
