Experts say 80 per cent of Zimbabweans have no jobs – yet the country is a beehive of activity. The huge informal sector allows people to survive, but leaves them without social or job security and the cash-strapped government without tax income.
Harare (dpa) – Officially, hardly anyone in Zimbabwe has a job. Yet in the bustling streets of the capital Harare and nearby towns, there is hardly an idle person in sight.
Hawkers offer vegetables, soft drinks, clothes or tyres. Shops and bars operate in shacks. Prefabricated housing and plushy furniture is sold on roadsides. Concrete houses are being built.
The informal sector that dominates the southern African country’s economy ranges from small-time hawkers to transport operators running minibus fleets.
“Politically connected people who can ask police to look the other way control marketplaces with hundreds of vendors,” said Promise Mkwananzi from the Zimbabwe Informal Sector’s Organization.
The informal entrepreneurs are not registered and do not pay taxes – officially, they do not exist.
Fortune Munyonga, 35, makes snooker tables – a trade he learned from a friend.
“We started off using cheap materials, such as sticks from broom makers and home-made tokens for coin machines. Our business started to grow, until police came with bulldozers and destroyed our shed and others in the area.”
Munyonga started all over again and a decade later, he proudly shows two snooker tables he is building with his brother on the ochre-coloured earth yard of their father’s brick house in a low-income Harare neighbourhood.
“We have made enough money to start using electronic tools and industrially made materials. We received a large order from another informal entrepreneur, and clients have come from as far as Malawi and Mozambique. We employ casual workers, when the going is good.”
The proliferation of informal companies reflects the resilience of Zimbabweans in an economy which is still struggling to recover from the 1999-2008 recession.
The crisis, caused partly by President Robert Mugabe’s land reform that expropriated experienced white farmers, cut the economy by half and forced the country to replace its inflated currency with the US dollar in 2009.
Less than 700,000 people are formally employed, said Gideon Shoko, deputy secretary general of the Zimbabwe Congress of Trade Unions.
About 500,000 of them are employed by the massive public sector and include thousands of “ghost workers” getting paid for posts they obtained through political connections and which they do not actually occupy, Shoko said.
In 2011, a government survey estimated that 84 per cent of the 5.4-million workforce were in informal employment.
The informal sector acts as a lifeline even for low-paid police officers selling lunch packs and soldiers doubling as taxi drivers. “Some government officials go out during their working hours to sell cell phones,” Mkwananzi said.
For 244 informal entrepreneurs who were interviewed for a 2014 study by the economic think tank Zeparu and the Bankers’ Association of Zimbabwe, the monthly earnings ranged from 120 dollars to 24,000 dollars.
High earnings, however, are rare. In the second-largest city Bulawayo, half of 20 interviewees did not earn enough to make ends meet, according to a 2014 study by a local university.
The lack of tax income leaves the government with little money to run the country, with the health and education sectors largely dependent on donor funding.
The existence of a vast informal sector also keeps millions of people working in precarious conditions.
“The system allows people to survive, but they lack any kind of security. Some female vendors have given birth on the street, because they could not afford maternity leave,” Mkwananzi said.
“Street vendors also suffer police harassment, with some of them bribing policemen with money and even sex,” he added.
The High Court sided with the vendors in June, ruling that the government could not use the army to remove hawkers, whom politicians had accused of smuggling their wares into the country and of taking business away from registered companies.
About 90 per cent of people in informal employment lack formal qualifications, according to the government survey. They also face formidable obstacles in obtaining financing from banks, with 76 per cent of them not even having bank accounts, according to the Zeparu study.
The government, however, is increasingly realizing the potential of the informal sector. Talks are underway on how the sector can access government support and contracts, Mkwananzi said.
“We are in the process of identifying how we can fit in all the youths who are roaming the streets in the various sectors of our economy in line with our economic blueprint,” Small to Medium Enterprises Development Minister Sithembiso Nyoni said.
“We are also encouraging our people to come with their project proposals so that as government we can see how best we can help … finance them,” she said by e-mail.
“We have asked several municipalities to allocate vending sites … to enable people to sell their wares,” the minister added.
For Fortune Munyonga, meanwhile, the sky is the limit. “My ambition is that by the end of next year, we’ll have a workshop with 12 employees,” he said.