Key topics
- Supermarkets close as Zimbabwe’s inflation hits 635%, deepening the crisis.
- Vendors disappear as the government enforces harsh tax measures.
- Informal traders blamed while government policies strangle the economy.
Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.
The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here.
If you prefer WhatsApp for updates, sign up for the BizNews channel here.
By Cathy Buckle
Dear Family and Friends,
As the news began hitting the papers of big supermarkets closing down, it was immediately clear we were entering a new period of deep crisis and someone was going to have to be blamed. Driving through my home town on Saturday morning I couldn’t believe what I was seeing, or rather what I wasn’t seeing. All the vendors were gone, just gone. No people selling at the big clothes market past the roundabout, no one selling shoes, hats, belts and jackets along the railway line, none of the ladies on the pavements selling socks, hats, fruit, none of the young guys with their bright trolleys selling cold drinks, snacks, biscuits. It was just a ghost town; the usually pulsing heart of my home town had disappeared.
Only a few days before the IMF had said Zimbabwe has the highest annual inflation in the world, recording a staggering 635% at the end of 2024. The crisis we all saw coming back in Aril 2024 when the Zimbabwe government introduced yet another new currency has arrived. The government dramatically limited the amount of bank notes in circulation, held the exchange rate to the US dollar at unsustainably low rates. They said they were trying to curtail black market currency dealers but it put a stranglehold on retailers and left them forced to sell their goods at prices too low to enable them to restock their shelves. The closures we are seeing now were inevitable.
Big giants began falling. Choppies and Queensdale Spar supermarkets closed, then branches of big wholesaler N Richards. Supermarket chain OK closed five branches and other businesses are downsizing including CBZ, Zimbabwe’s biggest bank, retrenching almost 350 workers. Multiple hundreds of jobs are being lost, the impact on their families is immeasurable.
It’s a double-edged sword though because just as retailers were struggling so were we. With less and less ZiGs in circulation we’ve had no option but to resort to buying everything in US dollars and so we took our money to the cheapest places we could find, the vendors in the informal market. This little example explains it all. A 2kg bag of laundry powder that costs US$3.70 in a South African shop, is a staggering US$9.40 in a Zimbabwean supermarket or US$5 under a tree from a vendor.
The CZR (Confederation of Zimbabwe Retailers) said the high cost of doing business and punitive banking charges, including the 2% Transfer Tax (IMTT) were ‘discouraging electronic transactions and driving more consumers to the informal market.’ They said that retailers are subject to over 30 different licensing and compliance requirements which are ‘strangling formal businesses.’ The CZR said there was an ‘increasing dominance of the informal sector which is thriving due to its ability to operate outside statutory obligations such as taxes, licensing fees, and labour laws.’ ‘It’s not fair,’ the big retailers said, ‘the vendors have an unfair advantage over us.’
So, there it was, the vendors were going to take the hit; not the Zig, not the government withholding local currency from circulation, not the government suppressing the exchange rate, not the governments price controls and not the government’s taxes which are sucking us all dry. The Minister of Finance has now announced the mandatory use of point-of-sale machines by informal traders to collect tax from vendors. This same Minister of Finance seems to have forgotten that in 2018 he introduced the punitive 2% IMTT tax on all electronic transactions saying that it was being done to ‘capture the informal sector that ordinarily didn’t pay any taxes.’ (Chronicle) Well, he captured them, and us and the whole retail sector and the whole country with this punishing tax which has held us in an iron grip ever since.
All week the tax wars have been in full swing on the streets here. The tax men are everywhere in their big cars and blue suits, chasing people. That’s why the vendors all suddenly disappeared, they’d gone into hiding. I contacted one lady I buy from to see if she was OK. My heart was sore at her response: “The market is closed down,” she said, “we are not working, it’s a stressing situation. Thanks for checking up, I really appreciate it.”
That’s the voice of the real Zimbabwe and I end this letter with a message of support for the informal traders. They have kept us alive and we see their struggle. Everyone knows where the blame really lies.
There is no charge for these Letters but if you would like to donate please visit my website.
Until next time, thanks for reading this Letter From Zimbabwe now in its 24th year, and my books about life in Zimbabwe, a country in waiting. My new evocative photobook ‘Zimbabwe’s Timeless Beauty The 2024 Collection” and my Beautiful Zimbabwe 2025 Calendar are now available. Visit my website or follow the links below.
Ndini shamwari yenyu (I am your friend)
Copyright © Cathy Buckle https://cathybuckle.co.zw/
Read also:
