Informal Traders and Urban Economic Development in Zimbabwe: A Pathway Toward Inclusive Growth

Tonderai James Nyagwaya¹, Rodney Mudyahoto², Masline Zinyama³, Pardon Muzondo⁴, Precious Kuziva Hove⁵, Edmore Ganyiwa⁶

^1,6 Lecturer, Department of Marketing, Faculty of Agribusiness and Entrepreneurship, Marondera University of Agricultural Science and Technology, Zimbabwe.

² Lecturer, Department of Management and Hospitality, Munhumutapa School of Commerce, Great Zimbabwe University, Zimbabwe.

³ Lecturer, Department of Agribusiness, Faculty of Agribusiness and Entrepreneurship, Marondera University of Agricultural Science and Technology, Zimbabwe.

⁴ Lecturer, Department of Supply Chain Management, Faculty of Agribusiness and Entrepreneurship, Marondera University of Agricultural Science and Technology, Zimbabwe.

⁵ Faculty Dean of Management and Entrepreneurial Sciences, Women’s University in Africa, Zimbabwe 

Abstract

The informal economy is a defining pillar of Zimbabwe’s socio-economic landscape, absorbing over 80% of the labour force amid prolonged formal-sector decline. Despite its central role in livelihoods and urban resilience, it remains undervalued in policy and weakly integrated into national planning. This study underscores the significance of informal traders as indispensable development actors and highlights the urgent need for inclusive policy and practice. Using a qualitative case study of Harare, the research draws on semi-structured interviews with 20 participants and a review of national policies such as NDS1 and the MSME Policy (2019). Anchored in Dualist, Structuralist, and Legalist theories of informality, the analysis reveals that informal traders substantially contribute to employment creation, income generation, market stability, and local value chains, particularly during crises like hyperinflation and COVID-19. However, their potential is constrained by poor infrastructure, financial exclusion, regulatory harassment, institutional fragmentation, and limited policy participation. While national frameworks acknowledge MSMEs, implementation remains weak due to bureaucratic complexity and poor coordination. The study concludes that integrating informal traders into national economic planning requires a shift from punitive regulation to facilitative governance. It recommends simplified formalisation pathways, coordinated institutional support, participatory urban governance, and tailored financial services to unlock the sector’s developmental potential.    

Keywords: Informal economy, Informal traders, Urban livelihoods, Inclusive development, Employment creation

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