Zimbabwe informal economy formalization efforts

The Zimbabwean government has initiated measures to regulate urban vending and formalize the nation’s informal economy.

Initially, Local Government and Public Works Minister Daniel Garwe targeted unauthorized individuals, described as ‘space barons,’ in Bulawayo. He ordered vendors to stop paying these individuals for access to vending bays, warning that the government would be ‘ruthless’ against those operating outside the law to prevent traders from being ‘fleeced.’

This effort expanded into a broader national strategy to restore order to Harare’s central business district. The government launched a 60-day drive to enhance tax compliance and formalize small enterprises. Economic measures include a 5% withholding tax on non-registered Micro and Small Enterprises and a reduction in the VAT registration threshold from US$40,000 to US$25,000. To manage illegal vending, the state approved a four-pillar plan—Legislate, Provide, Formalize, and Enforce—which includes developing infrastructure for 100 vending sites and constructing a modern satellite market to decongest the capital.