Zimbabwe’s informal sector – more carrots than sticks are needed

Walk through any bustling street in Harare or any other Zimbabwean city and you’ll see it: the vibrant hum of informal businesses—hair salons, food vendors, taxi drivers, clothing stalls, and more. These are not just side hustles or temporary gigs. For many, they are the backbone of survival. Yet, when it comes to taxation, Zimbabwe’s informal sector is often treated with suspicion, pressure, and punitive measures. A recent study makes it clear that policymakers need to use more carrots than sticks when engaging with informal traders.