Foreign Nationals Dominate Zimbabwe’s Informal Retail Sector Amid Concerns Over Illegal Operations

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HARARE – Zimbabwe’s retail sector is facing a major transformation as foreign nationals from countries such as China, the Democratic Republic of Congo, Rwanda, and Tanzania are reportedly dominating the market.

This has raised concerns about the survival of local retailers and the legality of foreign-owned businesses operating in the country.

Prominent retail chains, including OK Zimbabwe, Spar, and TM Pick n Pay, are struggling to compete with the proliferation of small, makeshift shops owned and operated by foreign nationals in Harare’s central business district and surrounding suburbs.

Critics accuse these foreign-owned shops of selling counterfeit products, operating without proper licenses, and using loopholes to circumvent regulations. Zimbabwe’s Constitution Amendment No. 20 of 2013 explicitly reserves the ownership and operation of retail outlets for Zimbabwean citizens, yet reports suggest widespread noncompliance.

Deputy Minister of Industry and Commerce Raji Modi expressed dismay over the situation, noting that many foreign nationals are bypassing legal restrictions by using Zimbabwean proxies to obtain licenses.

“We have a problem with foreign nationals from the region operating our local retail shops, and it’s not only them. There are also Chinese nationals in the retail sector, which is reserved for Zimbabwean citizens,” said Modi. “Unfortunately, they are using Zimbabwean names or workers’ names to obtain licenses illegally.”

Modi revealed that the Ministry has engaged the Zimbabwe Revenue Authority (ZIMRA) and other relevant authorities to address the issue, which has far-reaching consequences for the economy.

Former ZANU PF Harare Provincial Political Commissar and ex-Harare South MP Shadreck Mashayamombe raised alarm over the dominance of foreign-owned tuckshops.

“At least 90% of these tuckshops are owned by foreign nationals. They have destroyed all the big supermarkets in our country. OK Zimbabwe, as the biggest employer in the grocery retail business, is seriously struggling,” Mashayamombe said.

He also criticised the tax evasion practices of these businesses, which primarily conduct transactions in U.S. dollars, deliberately avoiding Zimbabwe’s local currency, the Zimbabwean dollar (ZWL).

“Our brothers and sisters are being used as loaders and for other menial tasks in these tuckshops. These people don’t pay tax, and the question is, who is protecting them? I am not xenophobic, but we cannot allow the destruction of our local businesses. Everyone must follow our laws,” he added.

A senior government official speaking anonymously claimed that many refugees, reportedly fleeing Tongogara Refugee Camp in Manicaland Province, are engaging in informal economic activities, including alleged money laundering, in Harare.

The influx of foreign nationals in the retail sector has sparked broader debates about Zimbabwe’s economic policies, unemployment, and the role of the informal sector. While some argue that these foreign-owned businesses fill gaps in the market, others view them as a threat to the livelihoods of local entrepreneurs and a strain on the already fragile economy.

The government is under increasing pressure to enforce regulations, clamp down on illegal operations, and protect the rights of local businesses to foster a sustainable economic environment. The future of Zimbabwe’s retail sector hangs in the balance as authorities and stakeholders seek solutions to these challenges.

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