Published: 24 July 2025

The Zimbabwean economy is overwhelmingly dominated by informal micro-businesses, according to a preliminary report of the 2023 Economic Census released yesterday by the Zimbabwe National Statistics Agency (ZimStat). Conducted between June 2024 and March 2025, the census identified 204,798 operational business establishments across the country, with the majority operating outside formal registration frameworks.

These latest statistics confirm the widespread presence and influence of unregistered enterprises, suggesting that Zimbabwe's real economy may be significantly larger than previously estimated. A substantial portion of the workforce is engaged in the informal sector, with estimates by the International Labour Organisation indicating that over 80 percent of the population depends on it for employment. The Zimbabwe National Chamber of Commerce, one of the country's leading business lobby groups, estimates the informal sector contributes about 64.1 percent of the country's gross domestic product (GDP), roughly equivalent to US$42 billion.

The government is actively encouraging the formalisation of this sector through various initiatives designed to increase tax compliance, improve access to formal financial services, and provide legal protections for small businesses. These efforts include promoting electronic transactions, implementing a Small to Medium Enterprises (SMEs) Formalisation Strategy, and streamlining the registration process.

ZimStat's director general, Mrs. Tafadzwa Bandama, described the economic census as the most comprehensive enumeration of business and economic activities in Zimbabwe, calling it a cornerstone for national planning and policymaking. She emphasized that the preliminary findings offer early insight into the country's economic structure, the distribution of business activities across provinces and districts, and the identification of growth opportunities critical to guiding investment and addressing structural economic challenges.

Of the business establishments surveyed, 76.1 percent were classified as informal, meaning they were not registered with any regulatory bodies such as the Registrar of Companies, Registrar of Cooperatives, Zimbabwe Revenue Authority, or National Social Security Authority, and did not keep consistent records. Formal businesses comprised the remaining share. The report further revealed that 87.9 percent of all establishments were micro-enterprises, with only 18.9 percent of these operating formally.

Mrs. Mationesa Phiri, director for production statistics at ZimStat, highlighted that the wholesale and retail trade sector dominated Zimbabwe's business landscape, accounting for 73.13 percent of establishments, followed by manufacturing at 8.24 percent. She noted that only 23.9 percent of all businesses were formally registered, with Bulawayo province having the highest proportion of formal establishments at 46.4 percent.

While all 2,031 large establishments identified were formal, only 18.9 percent of the 180,073 micro-establishments were registered, underscoring the prevalence of informality among smaller ventures. Within the manufacturing sector, only 19 percent of its 16,877 establishments were formal. Geographically, approximately 87 percent of businesses were located in urban areas compared to 13.3 percent in rural settings.

Provincial data revealed significant variation in formality rates. Bulawayo province stood out with 40.4 percent of its 15,840 establishments formally registered, a notably higher figure than other provinces. Most provinces recorded less than 30 percent formality, with Bulawayo (29.2 percent) and Matebeleland North (20.3 percent) being the only provinces with more than 20 percent of establishments registered with the Registrar of Companies. Overall, just 17.6 percent of manufacturing establishments were registered.

Regarding business structure, sole proprietorships accounted for the vast majority, representing 89.42 percent of all establishments nationally, while private limited companies made up 7.13 percent.

ZimStat board chairperson, Mr. John Mafararika, emphasized the significance of the census during the dissemination event in Harare, describing it as a landmark operation essential for producing reliable statistics that inform government policy, business strategies, research, and household decision-making.

To encourage formalisation, the government has mandated the use of Point of Sale (POS) machines for all transactions to reduce cash dealings and improve tax collection. The strategy aims to remove barriers such as excessive licensing costs and bureaucratic hurdles, while offering support for registration and operation in the formal sector. Additionally, workshops and training programs are being rolled out to equip informal traders, artists, and cultural professionals with the skills necessary to transition into the formal economy.

Infrastructure development remains a government priority, with investments targeting transport, communication, and utilities designed to lower business operating costs and further encourage formalisation.
- The Herald