Informal economy is a dead economy

Movement for Democratic Change secretary-general Tendai Biti, who was Finance Minister just seven ago, today said the informal economy is a dead economy and it was a tragedy that the government was celebrating the creation of such an economy. According to a statement released by the party after his press conference in Harare, Biti said 84 percent of the formal sector had collapsed and the government seemed not to have a clue about what to do.
“84 percent of the formal sector has collapsed. Day to day, we are seeing the deindustrialisation of the formal sector. The problem of the informal economy is that it is a dead economy that does not pay taxes and it is a tragedy that this clueless government of the day is celebrating the creation of the informal market,” he said. As Finance Minister Tendai Biti said on 7 June last year the informal sector employed 3.7 million people and generated US$1.7 billion a year. He argued that unemployed in the country was only 9 percent and nowhere near the 85 percent often touted. “We have always had this argument about what is the percentage of people that are employed or unemployed in Zimbabwe. Textbook economists will say 85 percent but that is not true. If we had a population like that most people in Zimbabwe would have died, it is not possible,” he said at the launch of the Poverty Income Consumption and Expenditure Survey by the Zimbabwe National Statistics Agency. “One is either a farmer, selling juice cards (airtime vouchers), driving an emergency taxi or you are working as a hair dresser. The fact of the matter is most people are economically active.”

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