Tough times force government to speed up recognition of informal sector.


Faced with the bitter realisation that gains expected from the economic structural adjustment programme and trade liberalisation like increased investment and employment creation are not forthcoming, the government seems to have been forced to move faster to recognise the informal sector – a sector long advocated by the World Bank, one of the major architects and sponsors of ESAPS.

While the government’s economic reform bible : A framework’s for economic reform 1991 -1995 gives emphasis to the creation and recognition of the informal sector as well as the small business operator, it appears that the government has been ignoring this sector giving priority to large-scale investors who unfortunately have not been forthcoming.

The framework clearly states: “there is now recognition that the zoning regulations and licensing of small business, shops, hawkers and vendors, which have been in force since pre-independence, inhibit the growth of informal employment.

“A commission will be established by April 1991 to review, over the following two years, the objectives and effectiveness of the local council bye-laws and other regulations on economic activity, balancing growth objectives with enforcing acceptable public health standards and orderly development of towns and cities.”

The Insider is not aware of this commission ever being set up.

“Some relaxation of rules has already occurred, for example, the Harare City Council has relaxed the very strict conditions regarding provision of sanitary facilities before a market can be established, ” the framework says.

“However, the licensing requirements still cause delays and harassment to ordinary people wanting to earn a livelihood through informal economic activities. Therefore the licensing restrictions on hawking and street vending will be relaxed to promote employment.”

“Establishments which employ mechanical power presently require a licence under the Factories and Works Act irrespective of the number of persons employed. Such a wide coverage inhibits small business activity. A review will be undertaken of the possibility of amending the Factories and Works Act, for example, by exempting establishments which employ less than 10 persons even if mechanical power is used. Consideration will be given to simplifying local council bye-laws and other regulations for areas declared as growth points, as a first step towards general simplification for all areas,” the document says.

This document was released at the beginning of last year having been prepared years before but it was only in June this year that the government showed it wanted these by-laws relaxed when Finance Minister Bernard Chidzero and Local Government Minister Joseph Msika called on local authorities at their annual general meeting in Kariba to amend these by-laws.

All along vendors have been having running battles with police who confiscate their products and fine them for illegally selling these products.

As a result while normally it would be the more mature men and women who would be hawking fruits and vegetables, the game has now been passed over to the younger folk since they are the ones who are able to outrun the police. Unfortunately some of these youths are of school-going age, and indeed, some go to school and spend the afternoon in this cat-and-mouse game as they try to fend for their own school fees.

Though belated, calls by Chidzero and Msika that local authorities should relax their by-laws to allow open trade are most welcome but it appears that local authorities, still using the pretext of sound town planning, will not give in easily as they claim such a move would result in environmental and health hazards too ghastly to contemplate.

Harare city council chief health inspector, Dombo Chibanda, argued at the same meeting that relaxing the by-laws was a short-term solution which could be unsustainable, expensive and disastrous.

“It is our conviction that after close analysis of some of these laws they need not be thrown out of the window as they are for the orderly management and control of activities in our cities” he said.

“It is common knowledge that one country had to relocate its capital city to a new planned city at an enormous expense after the first capital city had become unsustainable because of bad planning and management,” he went on without naming the country.

Chidzero’s reply was most encouraging and apparently reflects government thinking as even in the framework the government recognises the need to maintain sound environment and health standards.

“While we all recognise the need for environmental protection and improvement of health standards to guard against disease outbreaks and also the need for orderly planning of our cities, all this should be balanced with the need for enterprise and development,” he said.

He added that Zimbabweans should not be prisoners of the colonial legacy and challenged councillors to visit any of the capitals of their former “colonial masters” to see how the informal sector was flourishing there without any adverse effects or the deterioration of health and planning standards.

“This is what we should be emulating, rather than guarding jealously or blindly our orderly clean cities whose unemployment is rising to uncontrollable levels,” Chidzero said.

Although deregulation is part of the government’s economic structural adjustment programme there is now an urgent need to move faster because economic hardships brought about both by ESAP and the current drought are forcing people to do anything for survival. Rigid regulations will therefore not serve any purpose except only to make the government more unpopular as it has failed to deliver the goods promised under ESAP, namely increased investment and jobs.

With most people, including those currently employed, failing to make ends meet, there has been a sudden increase in thefts and robberies. Local shops now report an average of six cases of shoplifting a day. Armed robberies, which only a few years ago were mostly attributed either to so-called “terrorists” during the liberation war and later to so-called “dissidents” during the internal civil strife, are now becoming a common occurrence with financial institutions or persons known to transport or carry huge sums of cash as the main targets.

Two men from the drought stricken district of Mberengwa even went to the extent of tampering with the railway signals to stop a goods train so that they could steal some maize from one of the wagons after the train had stopped.

When schools opened in mid-May nearly 90 percent of the pupils were sent back home because they had not paid their fees. Although parents were given until the end of the month to pay up at some schools as many as 70 percent of the pupils had not paid their fees.

In Bulawayo alone some 25 000 households had failed to pay their rents for January and February and owed the council more than $9 million. Most of them still cannot afford to and the residents association has come to the rescue.

According to the Confederation of Zimbabwe Industries (CZI) business optimism in all sectors fell by 58 percent in the first three months of this year. Employment prospects declined by a staggering 53 percent. This, therefore, leaves self-employment, through vending, as the only salvation for most enterprising people.


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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