Clearly, the home industries employ a significant amount of the population, in a country whose unemployment rate is estimated at more than 80 percent. According to United States Central Intelligence Agency World Fact book, Zimbabwe’s unemployment rate increased from 50 percent in 1999 to 95 percent in 2009.
The figure, however, went down from 2009 after the formation of a government of national unity that helped revitalise the economy.
Transforming lives
There is no doubt that with the economy working below average capacity, quite a number of people have resorted to the informal sector where more money is now circulating. Despite the economic stabilisation due to introduction of multicurrencies, the country’s mainstream industries are yet to recover.
A snap survey by The Zimbabwean revealed that informal traders at home industries such as Siyaso, Mbare Musika, Mupedzanhamo and Glen View Complex are managing to earn a living from their small businesses, with some saying the businesses have transformed their lives. Tapfumaneyi Mapfumo, a carpenter at the Glen View home industry, said he took home at least $50 a day, while during weekends, month ends and Christmas holidays the profit doubled.
“I make doors, pushing trays, room dividers, wardrobes and other furniture,” he said. “Sometimes I get orders from furniture outlets across the country.”
A welder at Siyaso named Sibongile Mangena, who makes water tank stands, windows and door frames said: “I used to teach Metal Work at secondary schools but have since left the job because of low wages. I now earn $600 to $1000 per month after paying my rentals and salaries for my two workers,” he said.
Zimbabwe Cross Border Traders Association Secretary General, Tawanda Augustine, said in an interview that the informal sector had the capacity to contribute directly to the economy but lack of political will was hindering progress.
Take it seriously
Augustine said his organisation was lobbying for government to put in place systems that synergise the informal and formal sectors.
“We engaged the Ministry of Finance and other relevant ministries to take seriously the informal sector as it is part of the economy. Most home industries and big firms rely on border traders for inputs and identifying local and foreign markets,” said Augustine.
A Harare-based economic consultant, John Robertson, said even though it was difficult to measure informal sector contributions to the economy because most of the businesses entities were unregistered and lack traceable records, they had managed to sustain millions of lives in Zimbabwe in the face of economic hardships.
He added that due to the lack of friendly policies most informal operators were reluctant to formalise their businesses.
“The procedures and requirements for one to start a business or legalise it are so difficult, laborious and expensive,” he said.
Keeping its character
Robertson urged government to put in place favourable policies that allow economic players in the informal sector to regularise their businesses and contribute to fiscus through payment of tax and rentals to the local authorities.
Minister of Industry and Commerce, Welshman Ncube described home industries as small and medium entrepreneurs that operate outside regulated frameworks.
He said the informal sector by its nature could not be formalised and the moment it was regulated it would lose its character.
“The idea is to create an ideal situation that promotes the sector as it plays a critical role in providing jobs for those unemployed,” he said. “The government recently adopted a proposal by the Ministry of Small and Medium Enterprises and Co-operative Development to create light industries where they operate from and create a bank specifically for SMEs to get credit loans.”
Ncube said the only way for government to benefit from the informal sector was by funding it so that small businesses could graduate into big companies.
“It takes time for SMEs to grow as it requires a lot of funding but the sector plays a critical role in socio-economic terms,” he said.
Post published in: Business