By Itai Zimunya- an economist with TECa
There is a common line of reportage by people who travel to Zimbabwe. They highlight shock at what they see, often very different to the common global narratives of despair and hopelessness. One such is Sebastian Spio-Garbrah, former Chairman of the Canada-Africa Business Forum. When coming to Zimbabwe, he expected a horror show with poor people dying on the streets, 100% darkness and just poverty smelling everywhere. He was shocked. On the contrary, he saw the opposite, and said, when leaving, that “ … Zimbabwe has never been defined by the its challenges, but its potential. Success stories are too often not articulated, nor understood”. That observation inspires this article whose angle is to highlight the silent economic boom forming in Zimbabwe. It also raises crucial policy questions of why Zimbabwe needs to quickly integrate its economy by formalizing the informal sector.
Economic statistics and observation seem to highlight that Zimbabwe is experiencing some sporadic economic booms in some sectors. Zimbabwe sold 323 million kgs of tobacco in the 2025 marketing season, formally sold 36.5 tons of gold in the year ending 31 December 2024, and is witnessing a massive construction of houses, malls and roads across the country. Road construction is mainly the forte to Government. Our primary focus is the small but numerous investments by individuals, mainly those in the diaspora and those in the productive sectors.
Zimbabwe’s challenge is data collection because of a dual economy. Zimbabwe has two economies in one, a so-called formal economy and an informal economy. The formal economy includes firms listed on the stock exchange, tax paying and largely, with access to credit. This sector is wilting and facing serious operational challenges possible due to lack of innovation and disproportionately high overheads. The second sector, the informal one is now the biggest sector by volume and value of trade. It is growing astronomically. And because this sector has no data or measurement points, its boom is often not reported upon because of the historically defective economic policy which views the formal as the economy- and the informal as defective.
This informal sector is now the big driver in the economy contributing more than 65% of gold delivered in 2024, 65% of tobacco produced in 2025, more that 60% of maize delivered in 2025. The Zimbabwe National Chamber of Commerce (ZNCC) reports that almost 70% of economic transactions in the 2024 fiscal year were buoyed by the informal sector. When the formal banking sector report forex liquidity crunches, the informal sector parades massive liquidity, of course at a premium.
Our policy advise to the Minister of Finance and Economic Development is to quickly draft a pro-growth plan to formalize the informal sector. Millions of houses have, and are being built across Zimbabwe, especially in the smaller towns like Gwanda, Lupane, Guruve, Macheke, Gokwe, Nyazura, Chiredzi among others. Ordinary citizens, especially the Diaspora are building their stocks of properties quietly. The summation of this change cannot; and must not be ignored. However, sadly, Zimbabwe misses from this statistic because of lack of data.
The malls and urban renewals taking place in major urban centres is not usual. Someone must pay attention. The proliferation of imports, clothing and motor vehicles also reflect the rising of a new generation of fashion and technology savvy consumers that prime good life. The demographic statistic that 65% of Zimbabwe’s population is below 40 years must ring some noise to policy makers. The economy must be opened, now!
The Government is slow, and may, if not already, miss out on potential revenues. The Meikles Group of companies is sharp. Meikles is listed on the Zimbabwe Stock exchange and one of Zimbabwe’s leading firms. They noted and discussed this “boom in smaller mining towns” in their 2024 annual financial reports. Its response was to close some shops performing below par in the big cities of Harare and Bulawayo, and opening new shops in the smaller but growing towns. Their narrative confirms our assertion. There is a collapse of the formal sector, leading to falling employment and shrinking of wages in the formal sector.
The challenge with an error of omission is that it only grows and cause downstream challenges. Zimbabwe is losing millions of dollars in potential revenue by its narrow focus on the “formal sector”. That disease is called the Kodak disease in management- where one suffers for not doing anything wrong, but missing out on changes in the world.
Secondly, Zimbabwe must plot to formalize the informal sector not just for taxation and control purposes, but should prioritize their growth, liberty and innovation. In the advent of the Africa Continental Free Trade Area (AfCFTA), Zimbabwe can not continue to celebrate booms in the primary mining and agricultural sectors. Innovation and value addition are crucial. For capital to flow in these sectors, the Minister of Finance must press some policy buttons. These include:
a) reduce the cost of doing business by streamlining the numerous and often repetitive levies and taxes that slow down and complicate doing business in Zimbabwe,
b) reduce taxes and give more freedom to firms and workers, and
c) maintain policy clarity and consistence in allowing market forces the freedom to fix the forex rate among others.
d) Ensure policy certainty by priming rule of law and property rights
The National Competitiveness Commission (NCC) and the Zimbabwe Investment Development Agency (ZIDA) must work 24 hours a day to ensure Zimbabwe becomes competitive otherwise it will suffer as its people turn to consuming products and services from other polities. This includes the necessary unbundling and selling off of loss-making parastatals and allow fresh investment and technology to take over railways, air, energy and food marketing sectors. The inefficiencies of Government parastatals remain a threat to the potential towards achieving the $100 billion mark.
Over to the policy makers, to ignore this boom- or support it to further activate more investments!