Why should the informal sector remain informal?

Gokwe Member of Parliament Dorothy Mangami has welcomed plans to amend the Companies Act announced by President Robert Mugabe in his speech to officially open the current session of Parliament saying maybe this could enable informal businesses to turn into companies.

She said she believed most informal business had remained informal because of the difficult in registering companies.

“I think if the Company’s Act is looked at and most of the things are amended; it will improve the ease of doing business because as it is, you will find that most people are unable to access it especially the informal sector,” Mangami said.

“I also looked at it and said, why should they remain informal if they are able to use the Company’s Act? Maybe, they decided to be informal because of the measures involved when one wants to register a company. Since our informal sector is the one that is actually responsible for most of the income that we have to run our economy at the moment, it is important that the Company’s Act is looked at with urgency.”

She said that although the informal sector did not pay much in taxes, it contributed significantly to the economy and had to be recognised.

Mangami said the informal sector or the small and medium enterprises should also be allowed to tender for bigger jobs which she said were currently reserved for bigger companies because they could also do the job.

Full contribution:

MS. MANGAMI: May I take this opportunity to thank the movers of this motion, Hon. Mutomba and yourself, Madam Speaker. Secondly, I want to applaud the Presidential Speech that was presented by His Excellency, the President of the Republic of Zimbabwe. It was a brilliant speech and the most important thing that I thought I should talk about first is the Company’s Act.

I think if the Company’s Act is looked at and most of the things are amended; it will improve the ease of doing business because as it is, you will find that most people are unable to access it especially the informal sector. I also looked at it and said, why should they remain informal if they are able to use the Company’s Act? Maybe, they decided to be informal because of the measures involved when one wants to register a company. Since our informal sector is the one that is actually responsible for most of the income that we have to run our economy at the moment, it is important that the Company’s Act is looked at with urgency.

Madam Speaker, it is important that we also recognise the informal sector because in their small capacity, they are contributing that little to sustain a living for themselves and also, as a country to earn some revenue, even if the revenue realised is not much. This means a lot because even if they are small and quite a number of people are in the informal sector, then their monies are actually being utilised by our economy.

Madam Speaker, looking at the Company’s Act alone and without looking at the taxes that are being charged by the different ministries, it may not make much sense because it will not improve the ease of doing business. I would like to ask the ministries that are responsible to harmonise these taxes so that they speak to one thing. For example, one would be surprised that some of the taxes which are being charged by other ministries, ZIMRA is not aware of them. For example, the departure tax being charged by Air Zimbabwe….

THE TEMPORARY SPEAKER: Order hon. member, can those who are moving in and out move silently?

MS. MANGAMI: I was actually saying there is need to harmonise the taxes that are charged by different Ministries. I gave an example of the departure tax charged by Air Zimbabwe which is not known by ZIMRA. One wonders what form of tax could be charged without the umbrella department knowing. It is causing inconveniences to the foreigners who would have come to Zimbabwe to do business. On top of overhauling the Company Act, they should also harmonise the taxes that are charged and fares charged by other ministries for that same person to do business with us.

Madam Speaker, I also would want to look at the second issue which our President talked about in his speech, the issue of the Procurement Amendment Bill. Our President talked about the decentralisation of this. I think this is a good idea because when done, it will improve the ease of doing business. When people tender, at times it takes time to know who has won the tender and who has not. In most cases when one actually wins the tender, the problem also with the procurement board is that they do not announce in time but they do it secretly. I think within these amendments, such things should be taken care of. When our small businesses tender, they are not given adequate attention. Attention is only given to those company that have already grown and one wonders how these small companies are going to grow if they are not given a chance. The SMEs stand a chance if the decentralisation…

THE TEMPORARY SPEAKER: Order, there is a cell phone that is ringing, can the hon. member leave the House with the cell phone?

MS. MANGAMI: Thank you Madam Speaker, in the Procurement Bill it will be important also to include a clause where one would be paid promptly so as not to go out of business. We have seen that those who would have won the tenders go for a long time without being paid. Big companies have closed down because of not being paid on time especially by Government. I think by decentralisation, this will improve the ease of doing business.

I also would want to look at the Cooperative Society Act which will be brought to this House by the Ministry of Small and Medium Enterprises. I think there is need for this Corporative Act to be improved so that it gives the Ministry teeth. At the moment those that go against the law cannot be dealt with effectively because the Corporative Act does not have teeth. I was looking at the issue of the Hebert Chitepo Cooperative which is in Harare. They have been going against the Cooperative Act by not holding general meetings and have been like that for about 10 years, with no change of leadership. If the Cooperative Act is reviewed and the ministry is given some teeth, the problems within these cooperatives will improved.

Lastly, I want to look at the issue that the President raised in terms of those that are raping our children. The mandatory sentence which I am suggesting for such people is 20 years for each account. If people are given a prohibitive sentence then there will be less people who will be indulging in rapping children. Madam Speaker may I thank you again for the opportunity which you have given me.

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