New research presented by Injecta Analytics at the Real Estate Institute of Zimbabwe’s Winter School in Kigali makes a striking claim: roughly three in every four operating businesses in the country now sit outside the formal economy. That figure alone would be notable. What makes it consequential is what it implies for anyone trying to understand how Zimbabwean cities grow, how property gets priced, where capital actually moves, and why so many conventional investment models keep getting the country wrong.
By Trevor Rusere
The scale is not really in dispute. The IMF has long ranked Zimbabwe among the countries with the largest informal sectors in the world relative to GDP, putting the shadow economy’s contribution at over 60 percent of output, with the informal sector absorbing more than 85 percent of the national workforce, according to the U.S. State Department’s 2025 investment climate assessment of the country. Zimbabwe’s own private-sector body, the Confederation of Zimbabwe Industries, has put the figure even higher, estimating that 80 percent of economic activity now sits under informal control. Whichever number is used, Zimbabwe sits at the extreme end of a global spectrum, comparable to Bolivia as one of the two most informalised economies tracked in a widely cited 2018 IMF working paper on shadow economies worldwide.
The Injecta Analytics presentation argues that treating this as a governance failure or a symptom of decline misses the more interesting story. Zimbabwe, it suggests, has effectively grown a second economy alongside the official one — with its own pricing signals, rental markets, investment returns, retail networks and property dynamics. That parallel system is now reshaping urban geography in ways that conventional planning models were never built to explain.
Informality as Infrastructure, Not Disorder
The presentation pushes back on a familiar image of informality — the street vendor, the unregistered kiosk, the cash-in-hand transaction conducted just out of sight of the taxman. It argues instead that Zimbabwe is living through a deeper structural process, one in which housing, retail, transport, land use and even investment itself are steadily migrating out of formal planning and financing systems altogether. Over time, this hollows out the reach of official regulation across entire cities, replacing it with a set of internal rules that the market enforces on itself.
“Informality is not chaos,” the presentation states bluntly. “It is a parallel urban operating system.”
That reframing matters economically because official statistics are built to measure registered activity, not actual activity. A shop that never registers, a landlord who never declares rental income, a trader who deals only in cash — none of this shows up in GDP as conventionally measured, yet all of it generates real employment, real prices and real capital allocation. This is a well-established problem in development economics: cross-country estimates suggest informal activity can account for more than 40 percent of output in developing economies, against roughly 15 percent even across the OECD. Zimbabwe’s case is simply an extreme version of a pattern found, to varying degrees, almost everywhere.
A Currency History That Manufactured Informality
Zimbabwe’s drift into informality cannot be separated from its extraordinary monetary history. Since 1980 the country has cycled through six different currencies, endured hyperinflation that at its 2008 peak exceeded a million percent, and spent more than a decade running almost entirely on the US dollar after abandoning its own currency in 2009.
The latest attempt at monetary sovereignty, the gold-backed Zimbabwe Gold (ZiG), was introduced in April 2024 and has fared better than its predecessors on paper — official inflation had slowed to a monthly rate of 0.3 percent by mid-2025, with the exchange rate broadly stable since a sharp 43 percent devaluation in late 2024. But stability on the central bank’s books has not translated into trust on the ground. The informal sector, which operates almost entirely in US dollars, has continued to shun the ZiG, and the parallel exchange rate has at times traded at double the official rate, according to research from the Institute for Security Studies. Even government services — fuel, passports, licences — are still effectively priced and settled in foreign currency. The central bank has now pushed back its de-dollarisation target from 2026 to 2030, and the IMF’s Article IV mission concluded in 2025 that the transition plan remained, in its own words, unclear.
This is the deeper context for Injecta Analytics’ argument. When a currency repeatedly fails to hold its value, rational households and firms stop treating it as a store of wealth and start looking for assets that will. Zimbabwe illustrates this shift about as clearly as any economy can. Rather than expanding factories, formal retail chains or industrial capacity, households have funnelled savings into houses, backyard rental units and informal commercial structures — assets that hold value and generate income simultaneously. A house, in this environment, stops being simply shelter. It becomes a shop, a warehouse, a rental business, a workshop, sometimes all four in the same building. Seen this way, informalisation looks less like institutional collapse and more like a logical, if suboptimal, adaptation to decades of monetary unreliability.
Harare South: A Case Study in Uncontrolled Growth
Nowhere illustrates the pattern more vividly than Harare South, on the capital’s southern fringe. Injecta Analytics estimates that more than 10,000 houses are being built there every year, despite chronic shortages of water infrastructure, sewer connections, paved roads and formal title. Between 2022 and 2025 alone, the area reportedly added more than 31,500 new structures, while its population grew by over 215 percent across the preceding decade. Roughly 69 percent of the resulting housing stock is classified as temporary brick-and-mortar construction — solid enough to live in, but built without the legal or infrastructural backbone that would normally accompany growth at this pace.
Viewed through a conventional planning lens, this looks like uncontrolled sprawl. Viewed as a market response to acute housing demand, it looks like one of the fastest-growing residential markets anywhere on the continent. The problem is that investment has run far ahead of the infrastructure needed to support it. Without title deeds, residents cannot use their homes as collateral for formal bank financing. Without reliable water and power, larger commercial tenants stay away. And without any enforceable planning framework, there is no reliable way to benchmark the actual value of this property — which is precisely the kind of question that keeps institutional investors on the sidelines.
When the Supermarkets Leave but the Market Stays
Perhaps the most telling evidence of this shift comes from the heart of Harare itself. Over the past two years, at least eleven major supermarket branches operated by chains including OK Zimbabwe, TM Pick n Pay, Food World, Choppies and Zapalala have closed their central business district outlets.
Injecta Analytics argues these were not isolated corporate failures but a symptom of changing urban economics. Spatial mapping conducted before the closures found thousands of informal vendors selling near-identical products directly outside supermarket entrances, effectively splintering grocery retail into a mass of smaller, hyper-local transactions that undercut the anchor stores on their own doorstep. At the same time, the surrounding retail mix had already begun tilting toward auto parts, hardware and clothing, eroding the supermarkets’ traditional pull as destination retailers. The chains, in other words, stayed anchored to a location strategy built for a commercial geography that had already moved on without them.
This pattern is not unique to Zimbabwe. It echoes what economists studying Lagos and Nairobi have described as informal commercial clusters increasingly dictating where formal retail investment can and cannot succeed — a dynamic in which informality is not competing at the margins of the formal market but actively redrawing its centre of gravity.
Formal Demand Has Not Vanished — It Has Been Rationed
One of the study’s more counterintuitive findings is that Zimbabweans have not turned their backs on formal property markets by choice. What they lack is credible formal supply. Injecta Analytics points to the rapid sell-out of the first phase of Northgate, a master-planned 7,000-stand mixed-use development offering serviced land, proper infrastructure, enforceable planning standards and — critically — secure title deeds, all attributes largely absent from the informal housing stock expanding elsewhere in the city.
The implication is significant: where legally certain, a well-planned product reaches the market, and demand for it remains strong. Informality, on this reading, looks less like a cultural or consumer preference and more like the default outcome of constrained formal supply. Give buyers a credible formal alternative, and many will still choose it.
What the Rest of Africa — and the World — Shows
Zimbabwe’s predicament sits within a much wider pattern of rapid urban informalisation across the developing world, though the trajectories diverge sharply depending on policy choices made early.
In Kenya, informal settlements such as Kibera continue to coexist alongside a rapidly expanding formal mixed-use property sector in Nairobi. In South Africa, township economies have matured into markets sophisticated enough to capture billions of rand in annual consumer spending, almost entirely outside conventional retail infrastructure. Rwanda, by contrast, offers something closer to a counter-model: heavy investment in integrated urban planning and digital land registration has allowed Kigali to absorb much of its population growth formally, before informal settlement patterns could take hold at scale.
Further afield, China and Vietnam both experienced extensive informal urbanisation during their own periods of rapid economic transition, but sustained investment in transport links, utilities, land titling and industrial capacity gradually converted much of that informal growth into productive, formally recognised neighbourhoods. MedellÃn, in Colombia, is often cited as a similar case — a city that used infrastructure investment paired with secure land tenure to draw previously informal districts back into the formal property market over roughly two decades.
The lesson that emerges from these comparisons is that informality is neither inevitable nor irreversible. It is substantially a function of policy: how land is administered, how much infrastructure gets built ahead of demand rather than after it, and whether planning institutions have the capacity to keep pace with urban growth. Zimbabwe, in this sense, faces a genuine strategic choice rather than a fixed condition. Attempting to suppress informality purely through enforcement risks destroying the livelihoods that have grown up around it without offering any viable formal alternative. Recognising informal demand as real economic signal, while steadily expanding the formal infrastructure needed to absorb it, is the path several of these comparator cities suggest is more durable.
Reading Property Markets Through an Informal Lens
The presentation’s central message for investors is a reframing of how informality itself should be read. Rather than treating informal commercial activity purely as a regulatory risk to be priced out, Injecta Analytics argues it should increasingly be read as an early signal of where future formal demand will land. Areas experiencing rapid informal commercial growth today, in this view, often preview where tomorrow’s retail centres, logistics hubs and office developments are likely to emerge — informal traders, in effect, doing the market research that formal developers have not yet caught up with.
The same logic cuts the other way. Left unmanaged, informalisation can just as easily erode an established commercial district — through congestion, declining accessibility, and a steady dilution of tenant quality, much as happened around Harare’s CBD supermarkets. The practical challenge for investors, then, is no longer whether informality will shape Zimbabwe’s property markets — it clearly already does — but learning to distinguish where informal growth reflects genuine, durable economic demand from where it signals a market in the process of deteriorating.
Zimbabwe’s Broader Economic Backdrop
None of this is unfolding in isolation from Zimbabwe’s wider macroeconomic story. The World Bank has flagged Zimbabwe as one of the faster-growing economies in Southern Africa in recent years, with growth of 6.1 percent in 2022 and 5.3 percent in 2023, driven substantially by agriculture, mining and remittance inflows from the diaspora. The IMF has projected a further rebound to around 6 percent growth for 2025, aided by improved rainfall and elevated gold prices. Diaspora remittances alone are expected to approach US$5 billion annually in the near term — a flow so large that even a modest 3–5 percent levy on it has been floated by health-financing researchers as a way of raising US$150–250 million a year for domestic programmes, an idea that underscores just how central informal and semi-formal financial flows have become to the country’s fiscal imagination.
At the same time, independent estimates of Zimbabwe’s true economic size continue to diverge sharply from official figures. World Economics, a UK-based research firm, put Zimbabwe’s 2025 GDP at roughly US$152 billion in purchasing-power-parity terms once informal activity and outdated GDP base-year adjustments are factored in — around 65 percent higher than the figure implied by official World Bank data. That gap is itself a data point: it suggests that a meaningful share of the value informality research is trying to capture already sits outside what conventional statistics can see, whichever specific multiplier turns out to be right.
The Strategic Choice Ahead
Injecta Analytics’ conclusion is not that Zimbabwe should try to legislate informality out of existence. That approach, the evidence from comparable markets suggests, tends to destroy livelihoods faster than it builds formal alternatives to replace them. The more promising path, in this reading, is integration rather than suppression: secure land tenure that lets informally built assets be financed rather than merely occupied; targeted infrastructure investment that follows population growth instead of trailing years behind it; better spatial data so planners and investors can actually see where informal demand is concentrating; stronger planning institutions with the capacity to act on that data; and financial products explicitly designed for transitional, semi-formal markets rather than assuming every borrower fits a conventional formal-sector profile.
If that integration happens, Zimbabwe’s informal economy may end up functioning not as a barrier to formal investment but as its foundation — a vast, decentralised laboratory of real demand, pricing signals and entrepreneurial activity that the next generation of developers, financiers and policymakers could build on rather than build around.
The country’s central economic challenge, then, is not really informality itself. Zimbabwe has already shown, city by city and house by house, that it knows how to generate economic activity even when the formal system fails to keep up. The harder question is whether policymakers, financiers and developers can find a way to convert the markets that already exist, informally, into the investable cities of tomorrow.
