Expedite formalisation of informal traders
SITHENI NLEYA AND CLOUDINE MATOLA
Government should expedite formalization of the informal sector to obtain an accurate Gross Domestic Product (GDP) since informal traders are not taken into account in GDP calculations, the permanet secretary Presidential Affairs in the Office of the President, Tafadzwa Muguti has said.
Zimbabwe is a highly informal country, with over 80% of the labor force estimated to be employed in the informal sector.
Speaking at the Stakeholder Consultation workshop in Harare, Muguti said: “Currently Zimbabwe Revenue Authority (ZIMRA) and Zimbabwe National Statistics Agency (ZIMSTAT) simply look at what we call high counters, so they go to Delta Corporations, Econet, Zimplats, Edgars, the high top counters which are about the top 100 companies and we actually calculate our GDP based on high counters.
“So my argument up to today is that our GDP is not accurate because 70-80% of our economy is now informal so where are we calculating those statistics?
Are we saying they are no Small to Medium Enterprises exporting?
No they are there but because they are operating within a vacuum and as central government we never saw their numbers to be adequate enough to be computed, we have left up a chunk of our economy which is unaccounted for so we are trying to address it with you,” Muguti said.
Furthermore, according to Muguti, the government should placed economists in each province to collaborate with local authorities in assessing the province’s economy in an attempt to obtain complete economic data.
According to Muguti, it’s critical that every province recognizes its natural resources and endowments and promotes their marketing. For instance, the black granite found in Mutoko and the timber in Manicaland are examples of resources that could significantly establish a community. These provinces also need to take advantage of their comparative advantages.
The government is not into business; rather, it is responsible for policy, but with the help of the blue prints, he said, “we will be able to attract investment.” The blue prints, he claimed, will provide guidance to the government on how this industry can be financed.
When an industry is developed, according to Muguti, it creates a pool of capital for additional investment, acts as a pull factor for housing, schools, hospitals, and other direct or indirect businesses, and inevitably leads to the emergence of other logistics firms in the provinces. According to him, the seminar is creating blueprints that will dictate how the provinces develop.
