How Foreigners Are Using Legal Loopholes To Flood Zimbabwe’s Retail Sector Reserved For Locals

Foreign entrepreneurs are increasingly dominating Zimbabwe’s retail market, using various strategies to sidestep government regulations that reserve the sector for local citizens.

Dr. Denford Mutashu, president of the Confederation of Zimbabwe Retailers (CZR), expressed concern over reports of foreign investors entering the country under false pretenses and diverting into retail instead of sectors like manufacturing or mining.

A report highlighted how entrepreneurs from Nigeria, Ghana, the DRC, Rwanda, India, China, and Tanzania have set up retail outlets in Harare, often operating without proper licenses or under the guise of local individuals. Some foreign nationals even manage multiple units without displaying required permits.

Local supermarkets like TM Pick n Pay and OK Zimbabwe have seen a decline in sales due to competition from informal shops selling goods at lower prices. Concerns have been raised about tax evasion, smuggling, and unfair trade practices resulting from this trend.

Dr. Thomas Utete Wushe from the Ministry of Industry and Commerce stressed the need for foreign investors to seek approval before participating in reserved sectors, as part of the country’s indigenization and economic empowerment efforts.

The Finance Act No. 2 of 2024 expanded the list of reserved sectors to include haulage, pharmaceutical retail, customs, shipping, and borehole drilling, in addition to traditional retail and wholesale sectors. Efforts are underway to assess the sector and address the challenges posed by unchecked foreign traders with the help of corrupt officials.

Local traders are urging the government to enforce laws, close loopholes, and ensure fair competition to safeguard opportunities for Zimbabweans in the retail market.