HARARE, Zimbabwe — Batsirai Pabwe navigated the bustling informal night market in Harare, where vendors sell groceries, electronics, and other goods under the glow of cellphone flashlights. This underground bazaar has become a lifeline for many Zimbabweans who can no longer afford the inflated prices at traditional retail stores, which have been hit hard by the country’s economic instability and a volatile new currency.
Zimbabwe’s economy has long been plagued by hyperinflation, and the recent introduction of the ZiG (Zimbabwe Gold), a gold-backed currency, has not been able to stabilize the situation. Instead, it has further strained the formal retail sector, driving many consumers to seek cheaper alternatives in the informal market, which operates with far fewer overhead costs and regulatory constraints. In the absence of stable pricing, many Zimbabweans have shifted to night markets that offer goods at lower prices, bypassing the official exchange rate system.
Pabwe, a 30-year-old Harare resident, shared his first experience shopping at one of these nighttime bazaars. “It’s much cheaper than the supermarkets,” he said, filling his bag with detergent, snacks, and pasta for just $20. A similar amount spent at a supermarket would barely cover a few basic items. This dramatic difference in pricing has led to the informal market becoming the primary shopping option for many.
In April 2024, Zimbabwe introduced the ZiG currency with hopes of stabilizing the economy and reducing the country’s reliance on foreign currencies like the U.S. dollar. However, the value of the ZiG has continued to fluctuate wildly, creating a widening gap between the official exchange rate and the parallel market rate. This disparity has made it more attractive for Zimbabweans to use the U.S. dollar or transact in informal markets.
Retailers, required by law to accept the local currency, have been forced to increase their prices in response to the economic pressures. However, they have become less competitive compared to informal traders who operate without the constraints of high overhead costs, taxes, and official exchange rate controls. The Zimbabwe Retailers Association warned that many stores could face closure if these conditions persist.
In response to the situation, some businesses, like the grocery chain Pick n Pay, have reduced their investment in Zimbabwe, citing the deteriorating economic conditions. Experts suggest that this shift to informal trade highlights the extent to which the economy has become dependent on the informal sector. According to the International Labour Organization (ILO), over 80% of Zimbabwe’s employable population now works in the informal economy.
Despite the challenges faced by the formal retail sector, the informal market thrives, with vendors like Oswald Gari working through the night to provide for their families. “Business is booming,” Gari said, noting that the lack of formal employment opportunities in Zimbabwe has pushed many to rely on this underground economy. The night markets have become crucial to survival in a country where traditional businesses are struggling to adapt to the rapid devaluation of the currency.
For many consumers like Pabwe, these markets offer a more accessible, if unofficial, alternative to the escalating costs of formal stores. As the economy continues to grapple with currency instability, informal night bazaars are expected to play an even larger role in Zimbabwe’s economy.
For more information on the challenges of informal economies in emerging markets, explore the World Bank’s take on informal sector dynamics or read up on the broader impacts of currency crises in global economies at the International Monetary Fund.
