Zimbabwe's Informal Is The New Formal

"We must destroy the informal sector!"

This threat was issued at the recent CEO Africa Roundtable in Victoria Falls. It landed like an insult to the millions of Zimbabweans who wake before dawn to set up stalls, mend shoes, sell vegetables and ferry people to work. To propose destroying the informal economy is to engage in dangerous fantasy. It is to pretend that livelihoods, networks and ingenuity can be erased without consequence, and that the formal economy will somehow absorb everyone displaced.

We know this is not true. The informal economy is not an irritant on the margins but the central artery through which life flows. The data and lived realities point to the fact that the informal is, for now, our formal.

For many who wield the language of destruction, informality is a tidy abstraction, unregulated, untaxed, unfairly competitive. True in parts, but insufficient analysis. Context is the missing element.

Before colonial conquest, men and women delivered services, crafted goods and sold produce because communities required them to. A brewer, metalworker or mason supplied need without paperwork that later became legitimacy's marker. Colonial administrations criminalised this independent commerce to extract labour and protect settler markets. Political independence did not undo that architecture.

Over decades, the formal economy failed to expand at the pace needed for our growing, skilled population. Policy vacillation, economic shocks and misgovernance hollowed out pathways to stable employment. The result is not cultural regression but economic correction. When formal systems fail, people improvise. They create economies of survival, dignity and enterprise. To deride this as lawlessness is cruelly myopic.

There are two ways to read this reality. The pessimistic reading treats informality as a permanent defect, a pathology to be stamped out. The optimistic, and realistic, reading sees it as a reservoir of talent, adaptation and possibility. Today's stalls, workshops and minibuses can become tomorrow's factories, distribution networks and logistics companies if approached with respect rather than punitive intent.

The informal sector is not only Zimbabwe's economy today; it is the seedbed of the formal economy we hope to build tomorrow. This is not sentimentalism but basic economic history. Nations that industrialised did not begin with tidy corporates and compliant SMEs. They began with crowded markets, modest workshops, incremental capitalisation, informal apprenticeships and gradual aggregation of small operators into larger enterprises. Recognising this trajectory shifts the policy question from how to crush informality to how to shepherd and scale it.

If we intend to shepherd and scale, regulators must change how they see themselves. Tax authorities, licensing bodies and municipal enforcement have been, for too long, the face of state coercion. For traders who have watched clinics close, roads crumble, and electricity fail while being asked to pay the same levies as large firms, the motivation to formalise is understandably weak.

Good governance is not about punitive compliance but demonstrating value. If paying taxes results in tangible improvements, such as a repaired clinic, paved market street, and reliable water, then the calculus changes. Trust is earned when citizens can point to infrastructure and say their contribution helped create it. Regulatory agencies must reorient from purely extractive roles to facilitation. This includes simplifying registration, designing presumptive taxes reflecting micro-enterprise realities, deploying accessible digital tools and creating incentives that make formalisation beneficial and protective.

But regulators must first listen. Real listening means meeting traders in their markets, using mobile platforms for feedback, partnering with associations of informal workers and commissioning research that maps genuine flows of goods, credit and revenue. Only then can they design interventions that reduce real barriers rather than beating people into compliance.

This means peer-led registration drives, tax credits for micro-investment, temporary amnesty programmes and revenue-sharing pilots where local taxes finance visible municipal improvements. This is slow, patient work of rebuilding the social contract and turning compliance into conversation rather than confrontation.

We must also change our language. Informal should not be a slur. The persistent negative framing creates stigma that discourages entrepreneurs from seeking support, accessing markets and scaling enterprises. Many informal operators avoid the state not because they are lawless but because the state has been unreliable or indifferent. When salaried work vanishes in currency crises and policy failures, people diversify through necessity. These are survival strategies, not ideological rebellions. To imagine otherwise is to be willing to let people starve for theoretical order.

We must interrogate what we mean by development. If GDP increases while the majority cannot feed their children, development is cosmetic. The informal sector has sustained Zimbabwe through downturns, fed families during currency collapses and cushioned policy failures. It has incubated skills, entrepreneurial networks and intergenerational knowledge that formal institutions undervalue.

Turning this into inclusive growth requires deliberate design. It requires microfinance understanding irregular incomes, technical assistance improving production standards, market linkages connecting small producers to larger buyers and legal frameworks protecting property and contracts. It demands political will to invest in public goods so taxation returns become visible. Without this, calls for compliance ring hollow, appealing to trust institutions have not earned.

Formal businesses concerned about unfair competition have legitimate grievances, but their remedy should not be antagonism. If they want a level playing field, they must advocate for policies lowering formalisation costs, tax credits for transitioning enterprises, subsidised compliance assistance, co-operative models giving small producers bulk procurement access, and phased regulation permitting growth without punitive shocks. The informal and formal economies are not adversaries. They are interdependent. To treat one as an enemy is to risk collapse for both.

We must also discard romantic myths. Not every informal activity is a high-quality enterprise. Some practices are exploitative, unsafe or damaging. This does not justify demolition but selective regulation that improves conditions without destroying livelihoods. Standardised markets, health and safety support, fair dispute resolution and affordable insurance can raise the floor of informal work without erasing it.

Finally, the long arc requires humility. Too many interventions have been framed as grand designs or moral crusades. They fail because they lack an honest reading of where people actually are. Building a future where the informal economy integrates into a thriving formal structure will take time: policy pilots, transparent measurement, iterative learning and acceptance that the state must sometimes subsidise transition for the public good. This is not handwringing. This is strategy.

If we want a Zimbabwe whose economy is dignified, productive and inclusive, we must stop talking about destroying the informal sector and start speaking plainly about bringing it into the nation's life. That means accepting that the informal economy is our formal economy today. It means committing to policies that help it become the formal economy of tomorrow. It means reshaping how we think about people who work outside official structures to feed their families.

Only then will conversations about growth, taxation and opportunity be grounded in reality rather than rhetoric. Only then will we build something that feels like a nation. Only then will we stop pretending we can build a plane in flight and begin the patient, difficult, honest work of repairing it for the arduous journey ahead.

Cover Image Credit UNDP