Online Reporter
In April, Cabinet approved the National Formalisation Strategy and the National Employment Policy (2026-2030). The National Formalisation Strategy seeks to integrate informal workers and enterprises into the formal economy by improving access to social security, labour rights and financial services. The National Employment Policy (2026-2030), which updates the 2010 policy framework, seeks to respond to socio-economic changes, including the impact of the Covid-19 pandemic, while strengthening coordination among key stakeholders. Our reporter NYORE MADZIANIKE interviewed Women Affairs, Community, Small and Medium Enterprises Development Minister Monica Mutsvangwa to gain an insight into how the two policy frameworks are being implemented.
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Q: What specific measures is the ministry putting in place to implement the National Formalisation Strategy and integrate informal enterprises into the mainstream economy?
A: In the second quarter of this year (April to June), Cabinet approved the National Formalisation Strategy, which seeks to promote inclusive economic growth by improving the regulatory and business environment, enhancing productivity and enterprise development and expanding access to markets, finance and other business support services for micro, small and medium enterprises (MSMEs) and informal enterprises. As one of the key implementing actors, the Ministry of Women Affairs, Community, Small and Medium Enterprises Development has put in place a number of measures to facilitate the transition of informal enterprises into the mainstream economy, which include the following:
Policy and legislative framework
The ministry is currently reviewing the SMEs (Small and Medium Enterprises) Act to ensure that it responds to the prevailing business environment and supports measures that make formalisation simpler, more accessible and beneficial to enterprises.
We are also reviewing the MSME Policy Framework (2020-2024) to address identified formalisation gaps and put in place an appropriate policy framework to support the sustainable growth and graduation of enterprises from informality to formality.
Access to information
The ministry is rolling out information dissemination campaigns with a view to increasing access to information on formalisation pathways.
Many informal businesses remain outside the formal economy because entrepreneurs lack clear information on registration requirements, licensing procedures, taxation obligations and the benefits associated with formalisation.
The ministry is, therefore, strengthening outreach and awareness programmes to provide entrepreneurs with practical information on the processes and requirements for formalising their businesses.
Technical support and coordination
The ministry is facilitating technical support and coordination with relevant Government agencies. Formalisation involves a number of institutions, and the ministry is working with agencies such as the Zimbabwe Revenue Authority (ZIMRA), Standards Association of Zimbabwe, the Registrar of Companies, the Procurement Regulatory Authority of Zimbabwe (PRAZ), local authorities and other relevant institutions to make the formalisation process more coordinated and accessible to MSMEs. The objective is to ensure that entrepreneurs can obtain the technical assistance they need to navigate the various formalisation requirements.
Business development and support services
The ministry, as part of its mandate, is implementing programmes that target expanding access to business development and support services. This is against the background that formalisation should be a means to business viability, sustainability and ultimately graduation to productive large-scale enterprises.
A wide range of business support services are offered to MSMEs, which include business management and technical training, access to funding and markets, digitalisation and other services that enable the sector to improve productivity and competitiveness.
Furthermore, the ministry is facilitating the development of appropriate and formal workspaces across the country.
Access to safe, affordable, modern and adequate workspaces is an important enabler of formalisation, particularly for informal traders and small businesses operating in unsuitable environments.
The ministry is working with local authorities, development partners and the private sector to develop and improve SME workspaces across the country.
The Chiredzi SME Centre, for example, is one of the ministry’s flagship initiatives in this area and demonstrates our approach of creating an enabling physical environment in which small businesses can operate, formalise and grow.
Q: What is the implementation timeline for these measures?
A: The National Formalisation Strategy will be implemented during the tenure of NDS2 (National Development Strategy 2) (2026-2030) and will adopt a gradual process, rather than a big-bang approach. The implementation will also take into account the dynamic nature of the sector characterised by new enterprises constantly entering the economy while existing informal businesses progressively graduate into the formal sector.
The ministry is, therefore, implementing the measures under the National Formalisation Strategy through its annual programmes and workplans.
By 2027, the ministry is expecting to have finalised the establishment of a comprehensive MSME database.
Each year, the ministry assesses the effectiveness of these measures, identifies gaps and challenges and applies the lessons learned to make continuous improvements to the implementation approach.
This ensures that Government remains responsive to the evolving needs of MSMEs and continuously strengthens the pathway from informality to productive, sustainable and resilient formal enterprises.
Q: The Government has identified regulatory red tape as one of the barriers to formalisation. What specific licences, registration requirements and fees do you plan on removing to make it easier for informal enterprises to formalise.
A: The Government recognises that formalisation will only succeed if it is easier, more affordable and more beneficial to operate formally than informally.
In line with NDS2, Government is implementing ease-of-doing-business reforms aimed at reducing the cost and complexity of compliance, streamlining business registration and licensing, eliminating duplication and providing appropriate incentives and support services for enterprises to enter and remain in the formal economy. A major reform programme is the comprehensive review of licences, permits, levies and fees across 12 sectors — health, agriculture, retail, tourism, transport, energy, manufacturing, broadcasting, telecommunications, liquor, construction and financial services. The review responds to the problem of businesses having to obtain multiple, fragmented licences and permits from different regulatory authorities, often at significant cost and through lengthy procedures.
There are already concrete examples of these reforms. In the retail and wholesale sector, the liquor licence application fee has been reduced, the local authority bakery licence fee has been removed.
In manufacturing, the Government has reduced the import licence fee for most items, capped NSSA (National Social Security Authority) boiler registration, reduced factory approval plan fees by 50 percent, capped business and shop licences, reduced local authority factory licence approval fees by half and abolished rural district council timber transportation permits.
In financial services, Government has introduced zero-cost bank accounts for MSMEs, reduced cash withdrawal charges for both US dollar and ZiG (Zimbabwe Gold) transactions, and reduced mobile-money transaction charges.
These reforms are particularly important for formalisation because they reduce the cost of entering and participating in the formal financial system.
For informal enterprises, the message is, therefore, clear: Formalisation is not about adding more bureaucracy; it is about removing unnecessary bureaucracy and making the formal economy more accessible.
Q: How will the ministry ensure that the formalisation process does not impose additional financial and administrative burdens on small informal businesses, particularly those with limited capital?
A: Government is conscious that many informal businesses, particularly micro enterprises, operate with very limited capital and cannot absorb high registration costs, multiple licences or complex compliance requirements.
Our approach is, therefore, to make formalisation simple, affordable, proportionate and beneficial.
This includes streamlining registration and licensing requirements, rationalising and reducing fees where possible, eliminating unnecessary duplication, simplifying administrative procedures and expanding digital and one-stop services.
Importantly, Government is continuously engaging MSME associations, informal sector representatives, local authorities, regulatory agencies and other industry stakeholders throughout the reform process. This ensures that the costs and practical challenges of formalisation are identified from the perspective of businesses themselves and addressed in the design and implementation of reforms.
Furthermore, Government is developing a framework of both fiscal and non-fiscal incentives which will be implemented to support transitioning, that way creating a conducive environment that makes the transition to formality profitable and sustainable for enterprises. We will also continue to monitor the impact of these measures and make adjustments where necessary.
Q: The National Employment Policy (2026-2030), which was also adopted by Cabinet recently, seeks to expand social protection. What incentives is the Government offering to encourage informal enterprises to voluntarily formalise, including access to finance, markets, training, infrastructure and Government procurement opportunities?
A: The National Employment Policy (2026-2030), which was also approved this year, provides an important framework for strengthening labour rights, promoting inclusive growth, improving employment services and ensuring safe and decent working conditions.
Government has put in place numerous incentives to encourage formalisation. One of the key strategies is the ease-of-doing-business reforms, which entail streamlining business registration processes, rationalising and, where appropriate, abolishing permits, fees and other costs that had any adverse impact on the cost of businesses formalisation.
Government targets provision of a conducive environment to promote mobilisation of private sector capital to finance the MSMEs.
In addition, resources will also be channelled through the Small and Medium Enterprises Development Corporation (SMEDCO), the Zimbabwe Women’s Microfinance Bank and Empower Bank, Government financing arms which target MSMEs and women entrepreneurs.
The ministry is also lobbying banks to offer funding to SMEs, and it is pleasing to note that a number of banks have established SMEs desks to offer customised products and services to the sector.
The ministry is also improving access to markets and business development support by assisting MSMEs improve on product quality and standards, as well as facilitating their participation in both domestic and international markets, including through digital market platforms. Government is also promoting formalisation by providing opportunities for formalised MSMEs to participate in public procurement.
The Public Procurement and Disposal of Public Assets Act is currently under review, with greater attention being given to expanding procurement opportunities for MSMEs and ensuring that smaller enterprises can participate more effectively in public tenders.
Furthermore, Government continues to collaborate with local authorities in the development of appropriate infrastructure and MSMEs workspaces with a number of local authorities, with Gweru Municipality, Chirundu Local Board already partnering with the ministry to develop targeted, safe and suitable workspaces for MSMEs.
Q: What mechanisms will the ministry use to measure the success of the formalisation programme.
A: Cabinet approved the National Formalisation Strategy, whose implementation is guided by a clear action with the defined monitoring and evaluation framework, which enable Government to track progress against defined targets and outcomes.
The ministry monitors key indicators such as the number of enterprises formalised, access to formal channels of finance, markets access, uptake of business development services and the graduation of informal enterprises into productive and sustainable formal businesses. Progress will be reviewed periodically, including through annual assessments, to identify gaps, challenges and lessons learnt. The findings will inform continuous improvement of policies, programmes and implementation measures, ensuring that formalisation remains responsive, measurable and focused on tangible improvements in the livelihoods and productivity of MSMEs.
In addition, the MSMEs sector’s contribution to the fiscus will also demonstrate and measure the success of the formalisation strategy.
Q: What targets has the Government set for the number of informal enterprises to be formalised under the National Formalisation Strategy and National Employment Policies?
A: Guided by the statistical evidence that 86 percent of MSMEs are not formalised, the target is to significantly reduce the proportion of informal enterprises and support them to transition into the formal economy and generate formal employment. In line with the ministry’s 2026-2030 Strategic Plan, upwards of one million MSMEs will be exposed to regulatory requirements by 2030.
