Monday, May 13, 2024

It Is Not Yet Dawn For Zimbabwe’s Informal Economies As Government Extends Lockdown ‘Indefinitely’

Economists warn prolonged lockdown will suffocate the already struggling economy given it largely relies on the informal sector.

Mutare, May 23 — A medium build 35-year old Blaster Chemugaira is seated in a chair just outside the gate of a house he rents in Chikanga, a high-density suburb in Mutare—the fourth largest city in Zimbabwe.

A wooden placard nailed onto the durawall to his left side written ‘Carpenter available’ is visibly seen from a distance.

This is after sunrise and Chemugaira is hoping to get a part-time carpentry job from cash strapped Zimbabweans.

The father of four has been sitting on this spot daily since the week Zimbabwe eased restrictions on its lockdown which started in late March to curb the possible spread of global pandemic Coronavirus that has infected more than 55 people and claimed the lives of four in the country. 

His workshop is in Mutare show grounds but there is no activity as these traders are adhering to lock down regulations.

“I always sit here looking for a part-time job. Most people are not comfortable inviting us to work in their homes in the wake of Coronavirus. So, it is hard to get one,” Chemugaira told Ubuntu Times. 

“At my workshop, there is furniture that we had done before lockdown. At times we sell that. We cannot have new furniture at the moment as there is no material. This lockdown is interrupting the supply and delivery chain of our raw materials.” 

In mid-May, President Emmerson Mnangagwa extended lockdown ‘indefinitely’ with review every two weeks and the informal sector remains closed. 

Blaster Chemugaira's work place.
On a normal day at Blaster Chemugaira’s workplace saw dust from wood working machinery and tools would have been all over the place. Credit: Farai Shawn Matiashe / Ubuntu Times

It is estimated that around 90 percent of Zimbabwe’s working population is employed in the informal sector, according to Supporting Economic Transformation, a program aimed at promoting economic transformation and job creation in low and middle-income countries. 

Most of these people survive on a hand to mouth basis and not in operation for over a month puts their families at the brink of starvation. 

“Part-time jobs and little money from my savings have taken my family this far. Only God knows our next meal,” said Chemugaira. 

34-year old Selina Chapfotsoka, a vendor in Mbare, a densely populated suburb in Harare—the capital of Zimbabwe, said she is having hard times under lockdown. 

“Harare is expensive to live in, worse when one is not going to work. It is tough, I am struggling to feed my family,” she said. 

Wisborn Malaya, Secretary-General of Zimbabwe Chamber of Informal Economy Association (ZCIEA) said people in the informal economy are now vulnerable and hopeless as lockdown continues.

“These people are no longer able to sustain their families,” he said. 

The southern African nation’s informal economy is the largest in Africa and second only to Bolivia in the world, according to the 2018 International Monetary Fund report. 

Zimbabwe’s economy is largely dominated by the informal sector which takes 60 percent of its economic activity based on the 2018 International Monetary Fund report.

Informal sectors were closed due to COVID-19.
These young boys are selling sugar cane near a closed tuck shop in Mutare recently. Credit: Farai Shawn Matiashe / Ubuntu Times

Victor Bhoroma, an economist based in Harare, said Zimbabwe’s informal economy now has tentacles in every sector due to economic hardships and collapse of mainstream producers. 

“The informal sector and small to medium enterprises (SMEs) sector employ (about) 7 million Zimbabweans while contributing over 65 percent to Gross Domestic Product so the extended lockdown will have disastrous consequences on employment and consumer spending,” he said. 

Millions of livelihoods who depend on the informal sector for income, said Bhoroma, are sliding into poverty at the moment. 

Prosper Chitambara, a Harare-based economist, told Ubuntu Times that the informal economy is largely survivalist in nature.

“What the lockdown does is that it drives many into poverty and hunger through loss of incomes,” he said.

ZCIEA is projecting that the percentage of the people working in the informal economy is going to increase further since companies in the formal sector have started retrenching workers as Coronavirus bites. 

Local authorities, since last month, have been taking advantage of the lockdown to demolish structures used by people in the informal sector. 

Booker Machingaidze, who operates a tuck shop in Chikanga, said he is not operating waiting for a time City of Mutare officials will come to demolish his tuck shop. 

“I do not even know when they will come. I will just wait but in some areas, their structures were destroyed,” he said. 

Closed tuck shop.
Tuck shop owners in some parts of the country are worried that City Council officials might arrive at any time to demolish their structures. Credit: Farai Shawn Matiashe / Ubuntu Times

William Muraicho, a sole trader based in Dangamvura, a high-density suburb in Mutare told Ubuntu Times his working place was not yet demolished but his worry was that any time City of Mutare officials might descend towards it. 

“I do not know what the future holds for me. I am not even comfortable because informal sector structures in some places have already been destroyed. I am sure it is only a matter of time,” he said. 

Hopes for some of these traders to get back to work after lockdown, said Malaya, were shattered as City Councils went on rampage destroying their marketing stalls across the country. 

He said no alternative workplaces have been allocated to most of their members throughout the country. 

In a letter addressed to Local Authorities in early April, Zvinechimwe Churu, a Permanent Secretary in the Ministry of Local Government said Local Authorities “should take advantage of the lockdown to clean up and renovate SMEs and informal traders’ workplaces so that the areas will be more conducive to operate when business reopens.” 

Flea market structures in Zimbabwe.
Local authorities are taking down informal sectors’ marketing stalls throughout the country in their latest campaign to bring sanity into the cities. Credit: Farai Shawn Matiashe / Ubuntu Times

Spren Mutiwi, a City of Mutare spokesperson, told Ubuntu Times that trading will continue but this time they shall require them to use smart modern and mobile wares. 

“This is an ongoing program and we want to ensure that we come up with better markets that are of modern standards and that are environmentally friendly,” he said. 

City of Mutare has designated vending sites across the city, said Mutiwi adding that the focus is to upgrade the available facilities. 

Malaya said the welfare of their members have been worsened by the absence of a support relief allocated to informal traders. 

In a televised address last month, Mnangagwa said he had set aside 500 million Zimbabwean dollars ($8 million) as a rescue package for SMEs.

But that package is yet to be distributed to these SMEs. 

Bhoroma said the absence of social safety nets and a stimulus package aimed at SMEs means that most are finding the going tough.

Malaya said in some cities they were forging alliances with City Councils to provide sanitizers, masks, and disinfectants at informal sector’s trading places. 

He said they were still pushing the government to reopen the informal sector considering that it is the chief player in the economic development and sustainability in Zimbabwe.

While the government, local authorities, and informal traders associations are in a dialogue to come up with solutions to Zimbabwe’s informal economy, Chemugaira will continue sitting outside their house hoping to get part-time jobs. 

“I will wait. If they say we should reopen on condition of having personal protective equipment and other essentials in fighting Coronavirus at our workplaces; I am ready,” he said.