• Excessive Licenses: Over 25 licenses and permits are required to operate a single supermarket
  • Unfair Competition: Informal sectors gain a competitive advantage by evading taxes
  • Economic Consequences: The unsustainable situation may lead to company closures, exacerbating foreign currency shortages and unemployment

Harare- Operating a single supermarket in Zimbabwe requires over 25 licenses and permits, making it challenging for businesses to operate.

This is despite the mantra, Zimbabwe is open for business.

“A major investor in any of Zimbabwe’s towns and cities where various local government permits and licences are paid for exorbitant fees.

“To operate a single supermarket in Zimbabwe, one needs more than 25 licences and permits a tall ordr for some of our members who operate over 50 branches each,”RAZ said in a statement. 

These licenses come with hefty fees, affecting large-scale retailers like OK Zimbabwe and TM Pick n Pay, which have over 50 branches nationwide.

The Retailers Association of Zimbabwe (RAZ), comprising esteemed retailers, petitioned the Finance Ministry, highlighting the complexity of conducting business due to these excessive licenses.

RAZ members, including TM, Truworths, Edgars, SPAR, and others, face exorbitant fees for local government permits and licenses.

Formal retailers contribute significantly to the national fiscus through various taxes, employing nearly 20,000 Zimbabweans.

However, the numerous taxes and pegged exchange rates hinder business navigation. The informal sector gains a competitive advantage, as they don't pay these taxes.

With the forced use of pegged exchange rates, retailers adjust prices in US dollars, making products expensive and driving customers to the informal sector.

The foreign currency shortage worsens, as suppliers quote products using the parallel market rate (ZiG32 per dollar), unlike retailers (ZiG14.8). This disparity leads to significant losses.

For instance, a 2-litre Mazoe drink costs US$2-2.50 in informal markets versus US$4.50 in retail stores.

Customers opt for cheaper informal market prices.

RAZ warns that without government intervention, this unsustainable situation may lead to company closures.

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