As Zimbabwe grapples with the challenges of its new currency, traditional retail stores are struggling to survive, prompting many shoppers to flock to informal night bazaars and Messina Shops that offer significantly lower prices.
A shopper at one such bazaar, filled his plastic bag with detergents, toothpaste, snacks, and pasta, all displayed out from a boot of a car parked near the Fife street market illuminated by cellphone flashlights and fluorescent lamps.
“It’s my first time shopping here. My friend told me that it’s much cheaper than the supermarkets,” the shopper said, visibly relieved after spending just $20.
“I decided to give it a try, and I really enjoyed it.”
The introduction of the new gold-backed currency, known as Zimbabwe Gold (ZiG), has led to rising prices in traditional stores, pushing consumers towards these unregulated markets that spring up at night to evade authorities.
“From dusk, sidewalks and parking spaces burst into open-air bazaars, offering everything from groceries to electronics,” noted a local vendor.
The informal traders, often unfettered by the rising costs of energy and taxes, are able to offer better deals. For instance, a box of juice that retails for $3 in supermarkets can be found for half that price on the streets.
“In every transaction, businesses in the formal setup are incurring exchange rate losses that cannot be compensated,” explained an economics professor who cannot be name.
“The major issue here is a currency crisis.”
The ZiG was introduced in April 2024 to replace a previous currency that had suffered severe depreciation. However, just seven months later, the new currency appears to be faltering, with the gap between official and black market exchange rates widening. Many people, including informal traders, are reverting to the more stable U.S. dollar for transactions.
Traditional retailers are feeling the pinch. The Retailers Association of Zimbabwe warned in September that the situation is “clearly untenable,” with some stores facing potential closures. Pick n Pay, a major grocery chain, recently reported that it had “impaired” its investment in Zimbabwe to a book value of zero due to deteriorating economic conditions.
Another vendor who operates at night, shared his perspective:
“Business is booming. I only work at night when the police leave.” the vendor, who supports six children and four nephews, relies on the night trade for his livelihood.
“I have no hope of finding formal employment in a country where industrial sites are being turned into warehouses for imported goods,” he lamented.
With over 80% of Zimbabwe’s employable population working in the informal sector, many like this shopper find shopping at night bazaars to be less confusing and more affordable.
“I got everything I was looking for, and the pricing is really affordable,” he said. “I think I will do this more often.”
The government has turned a deaf ear towards reason and advice. RAZ’s warning has not been heeded, instead, the government responded by bashing the formal sector, from whence government funding is gotten, with more taxes.
The formal sector happen forced to be the ‘dumping ground’ of the near useless ZiG. It is known by all and sundry that the informal markets will not trade in the ZiG. At the same time, the informal market which happen allowed to dominate trade by the very same government does not remit any taxes.
The recent clampdown on goods that were smuggled into the country have not affected the informal sector, instead t very same sector which feeds government coffers is being targeted.
Lately, th…