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Business Reporter
Zimbabwe’s economic recovery is being hampered by the twin evils of counterfeit products and rampant smuggling, according to Government officials and industry leaders.
Permanent Secretary in the Ministry of Industry and Commerce, Dr Thomas Utete Wushe, emphasised the urgent need to address these issues, calling on both the public and private sectors to play their part.
“Those two evils are so threatening to our well-being that we need to be serious about it,” Dr Utete warned.
Speaking at the CEO of the Year Awards ceremony hosted by the CEO Africa Roundtable, Dr Wushe urged businesses to refrain from smuggling and informal activities, highlighting the negative impact on the formal economy and Government revenue.
“First, by stopping smuggling yourselves. That’s the first thing I want you to do. Please, stop smuggling,” Dr Wushe pleaded.
He also stressed the importance of local production and reducing reliance on imports.
“We should manufacture. We should produce our own food. We should make our own shoes. We should buy locally,” he said.
Delta Corporation chief executive, Mr Matts Valela, echoed these sentiments, emphasising the detrimental effects of informality on national development.
“National development cannot happen at a scale we want when we are informalising at this level,” Mr Valela said.
He pointed out that international and local capital is hesitant to invest in an environment plagued by informality and poor governance.
“There is no more evidence of that holding back than demonstrating that financial markets are dynamic,” Mr Valela added.
“They respond to the marketplace, they respond to the emerging places, they always change. And so something needs to be done if we must get a stable financial market space.”
Speaking at the Capital Markets Awards ceremony where he was the guest of honour Mr Valela called for improved asset quality, transparency, and strong governance practices among listed companies to attract investment.
“I think the quality of assets that we bring to the marketplace must improve.
“We that seek to be listed must be honest and demonstrate that regulation and governance is the most important thing in the future,” he said.
Economists also weighed in on the issue.
Dr Cornelius Dube, chief economist at the Confederation of Zimbabwe Industries, highlighted the declining profitability of businesses due to increased compliance costs and competition from informal sector players.
“Why is profitability falling while economic activity is still high?” Dr Dube asked rhetorically.
Presenting at the 2025 post-budget breakfast meeting hosted by Business Weekly, Dube attributed this to falling profitability as a result of compliance eroding profits, high informality eroding market shares while at the same time, displacing local products by imports.
Speaking at the same meeting economist Mr James Wadi, proposed a more strategic approach to addressing informality.
He suggested incentivizing informal businesses to formalise by providing access to resources, information, and social security benefits.
“Policymakers must provide greater access to resources and information, pension schemes, social insurance, or other incentives—conditioned on registration as some of the incentives,” Mr Wadi said.
He suggested using intermediaries such as business associations, non-governmental organisations, or local community groups.
The Zimbabwean market is reportedly flooded with counterfeit and smuggled goods.
The Consumer Protection Commission (CPC) recently took part in market surveillance and intelligence gathering ahead of an anticipated anti-smuggling blitz.
Responding to questions from our sister publication The Sunday Mail recently, CPC research and public affairs manager Mr Kudakwashe Mudereri said: “The commission took part in market surveillance and intelligence gathering ahead of an anticipated anti-smuggling blitz.
“The commission focused on the proliferation of smuggled, counterfeits and substandard products in the market. It was noted that the market is flooded with products from Zambia, South Africa and Mozambique.
“The products included soft drinks, sugar, flour, infant formula, detergents . . . The commission has also noted that there is an increase in the availability of smuggled, counterfeit and substandard electrical gadgets, gas tanks and solar panels in the market.”
However, market analyst Walter Mandeya of Trigrams Investment said while the Government’s acknowledgment of the devastating impact of counterfeits and smuggling is a positive step, the real challenge lies in effective enforcement.
He said the Zimbabwe Revenue Authority (ZIMRA) was failing to effectively monitor and intercept smuggled goods while at the same time, corruption within the customs and border control system can facilitate the entry of counterfeit and smuggled products into the market.
“Stricter penalties should be imposed on individuals and businesses involved in smuggling and counterfeiting to deter future offences.
“Furthermore, greater cooperation between ZIMRA and other relevant agencies, such as the police and the Consumer Protection Commission, is essential to coordinate efforts and share intelligence.
“By strengthening enforcement and promoting transparency, Zimbabwe can protect its domestic industries, safeguard consumer rights, and boost its economic growth,” Mr Mandeya said.
