Don’t criminalise the informal sector: ZCIEA

RYAN CHIGOCHE

The Zimbabwe Chamber of Informal Economy Associations (ZCIEA) says the demolition of structures of informal businesses is destroying livelihoods and has left a number of operators drowning in debt.

Demolitions are underway in Harare Metropolitan province targeting informal business activities that range from construction, communication, tailoring, agriculture, vending, and retail.

“The current demolitions taking place in the Harare Metropolitan province are not welcome at all as the approach is too harsh as they are many alternatives ways that could have been taken to manage the situation. The demolitions are destroying livelihoods for many families in the country and working against the development of the country,” ZCIEA secretary-general Wisdom Balaya told Business Times.

He also revealed that the demolitions are leaving most of these informal businesses owners in massive debt as some have borrowed money from microfinance institutions to start these businesses.

Another concern he raised is that the demolitions seem to be elitist as they are targeting informal traders located in the high-density suburbs only while turning a blind eye to those operating in the low-density areas hence the poor getting poorer.

In Zimbabwe, for the past two decades, formal businesses have failed to create business opportunities or to create employment for the growing population.

Over the years many people have lost their jobs in the formal sector as more companies are embracing new technologies.

Some have lost their jobs through retrenchment as companies battle to stay afloat and fight the negative impacts posed by the Covid-19 pandemic.

Having lost their jobs many people have taken the opportunities presented by the informal sector.

According to the 2019 ZimStats Labour Survey, about 84.5% of employed people in the country are involved in the informal sector.

Balaya said authorities should assist the  businesses to formalise their operations.

“Zimbabwe should highly consider regularising and formalising the informal sector rather than destroying their structures as this will strengthen the capacity to monitor and control all their activities. This can be done through harnessing all their activities, improve their operating conditions and the structures they operate from, and also come up with a policy or frame work that recognises their activities as this will build the economy,” he said.

“The informal businesses should also be given an opportunity to graduate through mechanisms put in place that eradicate demolition of their structures as the main option as the sector is facing a second demolition in less than a year.”

Other countries, for example, Japan have put policy framework that integrates the informal sector as it contributes about 45% of their GDP.

Zimbabwe should follow suit considering that the sector is a source of livelihood for many vulnerable groups in the country including the disabled, women, and young people, experts say.