Business Leaders Urge Government to Rescue Struggling Companies

Zimbabwe industry and commerce sectors are calling for urgent intervention as more than companies shut down due to the country’s struggling economy.

The retail sector is under pressure from high inflation, foreign currency shortages and growing competition from informal traders. These challenges have made it difficult for formal business to survive leading to job losses and reduced economic activity.

Lately, Zimbabwe’s retail sector has been struggling with several major chains closing multiple stores across the country. Ok mart has shut down five branches, including Chitungwiza Town Center, Mbare, and Entumbane in Bulawayo. Spar has also closed it’s Queensdale branch, while Chippies has left the market completely due to economic difficulties. Wholesalers like N.Richards group have also been affected recently shutting down their Hatcliff and Tynwald outlets in Harare. These closures highlight the serious challenges facing Zimbabwe’s retail industry.

By Ruvarashe Gora

Zimbabwe National Chamber of Commerce president Tapiwa Karoro mentioned that informality remains a major issue, with over 72% of the economy operating outside the formal sector.

“The dominance of the informal sector has led to challenges such as law tax compliance, decreased productivity, limited investment opportunities and restricted access to government welfare programs”, said Karoro.

He noted that while the government introduced a 5% withholding tax on unregistered micro, small and medium enterprises (MSMEs) to improve tax compliance, the measure has had unintended consequences. ” It has discouraged informal wholesalers pushing more transactions into the underground market”, explained Karoro.

Business leaders continue to push for policy adjustments that will create a more stable economic formal sector growth.