Enhancing Zimbabwe’s global competitiveness through fair market charges

In the wake of a devastating fire on October 8, 2024, which destroyed Zimbabwe’s renowned Mbare Musika market, Harare City Council initiated an ambitious project to rebuild the historic market.

Today, the refurbished Mbare Musika stands ready for occupation.

However, the proposed rental fees, issued by the Council, have sparked concern among traders and economic observers, as they risk undermining the market’s role as a vital source of livelihood for thousands in Zimbabwe’s informal sector.

A New Era for Mbare Musika with Steep CostsThe Council’s fee proposal includes a deposit of US$150, a weekly rental fee of US$50 (amounting to US$200 monthly), a US$1 charge per toilet visit, and a monthly car parking fee of US$240. Compared to the modest US$25 per month that traders paid before the fire, the newly proposed rental fee represents an increase of nearly 700%.

Moreover, the additional cost of US$1 per toilet visit, which can total approximately US$120 per month if used four times daily, further escalates the operating costs.

Combined with the vehicle parking fee, traders are now expected to shell out an upfront cost of around US$710, with recurring monthly fees of about US$560 even before accounting for their inventory expenses.

Implications on Competitiveness and the Local EconomyThe financial burden imposed by these fees carries significant negative implications for the competitiveness of both the market and the broader urban economy.

First and foremost, the higher fees compress traders’ profit margins. With limited capital, small-scale vendors may find it challenging to reinvest in their businesses, resulting in slower growth and diminished potential for competition.

This strain on financial resources could eventually translate into higher retail prices, affecting consumers and threatening food security nationally.Another major concern is the potential push towards increased informality. Faced with burdensome costs, traders might opt to operate outside the designated Council premises to evade the fees.

This shift to informal setups not only diminishes official revenue streams for the city but also complicates efforts to improve urban management and infrastructure.

There is also the risk that new entrants, especially young entrepreneurs—will be discouraged from establishing businesses in the market due to these prohibitive costs.

The long-term result could be a less vibrant trading ecosystem, marked by reduced innovation and limited diversification of goods and services.Additionally, traders who are forced to pass on these additional costs to their customers may inadvertently contribute to a broader socio-economic challenge.

The rise in prices for everyday goods can reduce affordability for low-income households, exacerbating poverty and potentially igniting social tensions.

The high fee for basic amenities, such as toilet facilities, may even lead to unsanitary practices if traders or customers are compelled to find alternatives outside regulated facilities, creating public health risks.

Conversely, the Council argues that the higher fees may boost short-term revenue, which could be reinvested into improving market infrastructure, security, and sanitation. This revenue stream might help modernize the market, creating a more appealing trading environment that could, over time, attract more buyers and elevate the market’s overall stature. Additionally, a filtering effect could occur where only well-capitalized or committed traders remain, potentially leading to a more organized and competitive commercial space. Nevertheless, such benefits remain speculative if the fees discourage new participation and restrict the traditional base of traders who have long contributed to Mbare Musika’s character and success.

Pathways to a Balanced ApproachConsidering these concerns, the document strongly recommends a series of reforms to strike a balance between revenue generation and maintaining competitiveness.

One key recommendation is the removal of the toilet fee, a charge viewed by many as unnecessarily punitive. Furthermore, the paper advocates for a comprehensive review and audit of the fee structure to ensure that charges align with the actual service delivery levels.

Engaging trade representatives in the decision-making process is also proposed, which would help tailor the market’s policies to the needs and realities of those who depend on it.

Ultimately, this analysis reminds policymakers that urban competitiveness relies on a vibrant, inclusive market that accommodates both established traders and new entrants.

While increased fees might deliver short-term fiscal benefits to Harare City Council, a cautious and context-sensitive approach is essential to avoid undermining the socio-economic stability and competitive vibrancy that Mbare Musika has long represented.

For a detailed view of the analysis, visit our NCC Publications on our website (www.ncc-zim.co.zw) or get in touch with us directly at info@ncc.co.zw.