The Sunday Mail
‘MAN OF THE MOMENT’ . . . The informal sector is largely ignored yet it is employing the bulk of the country’s productive population
Edwin Mwase
The general distress in the economy mainly as a result of punitive sanctions imposed on the country by the West, forced many companies to downsize their businesses in a bid to survive.
With recapitalisation funds hard to come by, some companies closed shop leaving many people jobless. As a result, the country found itself with high unemployment statistics with different figures being tossed around.
Economists pegged the unemployment rate at 70 percent, but the ZimStat Census 2012 National report pegged the rate at 11 percent. The discomfort in the formal sector, extended to upstream and downstream sectors which subsequently led to the shrinkage of revenue collection bases.
However, analysts argue that there is an anomaly in the given statistics since most of the data is being collected only from the formal employment sector.
The informal sector is largely ignored yet the truth of the matter is that the informal sector was and still is arguably the “man-of-the-moment”, employing the bulk of the country’s productive population.
A Finscope Micro and Small Medium Enterprises (MSMEs) survey carried out in 2012 indicated that the informal sector has managed to create a total of 5,7 million jobs in the country. The survey also indicated that there are close to 2,8 million small business owners and 3,5 million small businesses around the country. The discomfort in the formal sector has actually became a blessing in disguise as this has led to the growth of the informal sector.
Social commentator, Mr Kudzai Mavheneka, said Zimbabweans have strayed from the culturally entrenched sentiment of waiting for industries to create employment opportunities for them.
“The philosophy way back, was that people would wait for industries and Government to absorb them into mainstream employment,” he said.
“But the mentality has changed, with many people opting to create work opportunities for themselves, due to the difficulties faced by many as a result of economic challenges the country faced a few years ago.”
Mr Mavheneka, however, applauded the Government for availing an enabling environment for the flourishing of the informal sector, but he said more was needed to be done in terms of policy direction for the sector to be able to reach optimum levels.
An informal worker at Siyaso Magaba Market in Mbare, George Padzarimwa, who says he has never had any form of formal employment due to lack of education, a pre-requisite of formal employment, said he has managed to lead a decent life despite not acquiring the former.
“I have managed to school my three kids at decent schools, with a good life coming as an additive, despite not being employed formally all my life,” he argued.
Another street vendor who operates in downtown Harare, Mrs Mary Hwenenga, said she has been able to look after her family despite the hard-hat terrain of street vending.
“Although it is not easy, I have been able to eke out a decent living through street vending business and fending for a family of five,” she said.
However, most vendors who spoke to the Sunday Mail Extra bemoaned what they termed as lack of clear policy clarity in the sector which has exposed most vendors to abuse by local authorities and law enforcement agencies.
They argue that laws dealing with the small enterprises are still archaic, the licensing fees exorbitant which negates positives gained by the informal sector.
“There is a clear lack of informal worker representation at trade union level, which has led to the abuse and non-recognition of such a critical sector in the country at the moment,” Padzarimwa said.
So, what are the worker representation bodies such as Zimbabwe Congress of Trade Union (ZCTU) and the Zimbabwe Federation of Trade Unions (ZFTU) doing to aid the plight of the informal worker? ZCTU secretary-general, Mr Japhet Moyo, said his organisation was working in tandem with an organisation called the Zimbabwe Chamber of Informal Economy Association (ZCIEA) formed 10 years ago to deal specifically with issues related to the informal sector.
“We train members of this organisation, who are the informal sector on how to deal with institutions like Zimra, and also on how they can bring more people into the sector,” he said.
“ZCTU doesn’t only represent people in the formal sector but also in the informal sector. Now that the majority of people are self-employed we also cater for the interests of these people and they are catered in our constitution.”
The Ministry of Small and Medium Enterprises and Co-operative Development said the formalisation of the informal sector which is said to have $7,4 billion circulating within its boundaries is at an advanced stage.
Among a raft of proposals from the policy document from the Ministry, is the registration and classification of entities in the sector into private limited companies, co-operatives, sole traders or as partnerships.
The First Lady Amai Grace Mugabe is on record, urging the law enforcement agencies and local authorities not to confiscate goods belonging to vendors.
Concerns have however been raised that there is need to find proper space where informal traders can conduct their business as at the present moment, some of them are operating at undesignated areas creating chaos within the city of Harare.
In Nigeria, besides it being an oil economy, the informal sector has played a significant role which has since resulted in it toppling South Africa to become the largest economy in Africa. Its informal sector contributes significantly to national economy in terms of output and employment creation.
