90% of Zimbabwe adults in the informal sector

Millions of adult Zimbabweans have been driven into the informal business sector due to the declining formal market, according to a recent statement from the Coalition for Market and Liberal Solutions (Comaliso).

Data from the Zimbabwe National Statistics Agency reveals that nearly 86% of Zimbabwe's adult population now operates within the informal sector, largely as a result of severe economic challenges that have severely impacted formal industries.

Comaliso highlighted a significant shift in retail trends, with the rise of lettable partitioned mall retail units (LPMRUs) driven by disruptions in consumer preferences and the adaptation of central business district (CBD) real estate. Property owners are increasingly converting shops into smaller retail cubicles, typically less than 20 square meters each. This shift has seen around 600,000 young urban entrepreneurs occupy these spaces.

The think-tank criticized the notion that this trend is merely temporary and expressed skepticism about the revival of traditional department stores.

Comaliso's recent survey, which included 2,000 respondents from malls in Harare, Bulawayo, Mutare, Gweru, and Chinhoyi, found that nearly 60% of LPMRUs are run or employed by women. The survey also revealed widespread dissatisfaction with current shop licensing and tax return processes.

“Nearly 80% of respondents expressed frustration with the licensing system and tax regulations, suggesting that LPMRUs should be allowed to pay licensing fees quarterly instead of the current annual payment,” Comaliso stated. The survey also indicated issues with municipal police and ZRP officers demanding bribes from unlicensed LPMRUs, which Comaliso condemned.

Additionally, the survey highlighted concerns over the Zimbabwe Revenue Authority's presumptive tax system, which many LPMRUs find burdensome. Comaliso proposed that tax payments be made quarterly and that tax clearance procedures be streamlined to facilitate easier access to goods and public tenders.

Another key finding was that 90% of respondents struggled to access loans due to stringent collateral requirements, the need for financial records, and high interest rates. Comaliso called on the Reserve Bank of Zimbabwe, the Bankers Association of Zimbabwe, and other financial institutions to reform loan conditions to better align with the current economic realities.

The think-tank emphasized the need for financial institutions to adapt their criteria, noting that a significant portion of Zimbabwe's working population does not have traditional payslips.