THE Confederation of Zimbabwe Retailers (CZR) has added its voice to the struggles facing the sector, appealing to President Emmerson Mnangagwa to urgently intervene to rescue what remains of the formalised retail and wholesale sector.
The appeal comes amid a bloodbath in the retail sector that has seen some retailers close stores and others teeter on the precipice.
According to the umbrella body of retailers and wholesalers, the recent closure of several outlets under the N Richards Group, coupled with Spar Zimbabwe’s decision to shut down Queensdale Spar, Choppies Zimbabwe’s exit from the market and Mahommed Mussa’s significant reduction of shop space by 60% underscores the growing crisis.
This paints a gloomy picture for thousands of employees who are taxpayers.
The ripple effect will be felt by suppliers.
The formal retailers have been leading the charge in promoting local products with 70% of products on their shelves being local.
CZR said the closure of various formal retail and wholesale businesses was a direct consequence of the prevailing turbulent economic environment that has “consistently failed to support formalised sector players”.
The dual currency regime takes much of the flax amid an overvalued exchange rate which has distorted pricing in the formal sector, thereby promoting rent-seeking behaviour.
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According to the umbrella body of retailers and wholesalers, government appears not to be doing enough to nurture the goose that lays the golden egg — pays taxes.
This comes amid increased informalisation which pro-government analysts equate to empowerment.
However, increased informalisation is tricky in an economy that has been struggling to access its pound of flesh from the informal sector through taxation.
The growing sector is enjoying a free ride in an economy where formal retailers are burdened by a punishing regulatory regime with over 30 separate licensing costs.
When government claims to have a conducive investment environment in place, it will be referring to foreign investors that enjoy the lion's share of incentives such as tax breaks.
Local investors have been pushing for a level playing field, but their pleas have fallen on deaf ears if the latest SOS by CZR is anything to go by.
Government will soon harvest the fruits of neglecting the formal sector as the unintended effects begin to bite.
Tax heads such as value added tax will underperform as many will resort to the informal sector where cash is king and tax authorities have no mechanism of enforcing the “give Caesar what belongs to Caesar” rule.
Instead, government has resorted to squeezing those that are compliant.
A pro-business administration must put in place a conducive environment for businesses to operate.
Government’s role is to put in place an environment in which business thrives.
The appeal by CZR has left unanswered questions.
What does it take for the government to address the concerns of formal retailers?
Is it so preoccupied with the ED2030 agenda such that it has no time to address the concerns of retailers?
Is it an inability to intervene or is it sheer arrogance on the part of the government?
The latter could be true as it watches while a sector with over 20 000 employees is being ravaged.
Government will soon pay the price of such obduracy when inflows into its coffers plummet.
