HomeLocal NewsMarket shrinks for traders in the worst year since multi-currency

Market shrinks for traders in the worst year since multi-currency

A clear sign that this was the most difficult year since the multi-currency, 29-year-old banana vendor Samuel Zikhali has nothing to show for his toiling as 2015 comes to an end.

Fidelity Mhlanga

Pulling his cart and depressed, Zikhali has been a vendor since 2004 and feels the current year was spent chasing the wind, struggling to fend for his family of four.

Clad in an off the peg blue shirt and pair of black trousers, Zikhali bemoaned the deteriorating living standards worsened by liquidity crunch, as the brunt of the failing economy renders his banana business worthless.

“Last year was better than this year in terms of access to cash. This year was the worst ever. I never made a profit in my business. The way we live now is very difficult,” Zikhali said.

“There is no money to talk about the whole year. I am living from hand to mouth, in poverty. Right now I don’t know what I will do on Christmas day because I don’t have money to buy food and clothes for my family.”

Like many other Zimbabweans, Zikhali has never been in formal employment since leaving school due de-industrialisation, which started at the turn of the millennium following the chaotic land reform exercise which affected agricultural output and downstream industry.

The saturation of the thriving informal sector, a new form of employment that grew rapidly in terms of numbers, has made the cake smaller for traders. According to the national statistics agency, about 30% of registered companies in Zimbabwe are generating less than US$5 000 annually, a figure that mirrors how the country has become a nation of vendors as its manufacturing base and capacity collapsed.

The Zimbabwe National Statistics Agency (Zimstat) conducted the first Central Business Register (CBR) inquiry between August, 2013 and June, 2014 which showed that only 3% of registered companies in the country had an annual turnover of over US$1 million.

Zikhali, together with hundreds of other vendors in the capital, have been playing cat and mouse games with button stick-wielding municipal police seeking to de-congest the central business district by driving out the ever growing multitude of vendors. Zikhali is a victim of economic implosion and de-industrialisation that forced thousands of employees out of formal employment.

His misery this year was compounded by numerous ordeals as the municipal police who consistently confiscated his bananas.

“I lost my stuff four times to the municipal police when I was doing my business in town. We are struggling. When I was selling bananas in town I could get better money the situation is worse because I am selling in locations where there is no money,” he said.

Government had given vendors up to June 26 this year to vacate illegal spaces from which they were selling their wares in the CBD.

After the announcement of the deadline, vendors staged a massive demonstration where they handed over a petition to parliament seeking a reversal of the government order.

Vendors trading illegal pharmaceutical products, fish and meat have invaded the city pavements, raising health concerns as the municipality is failing to contain the situation.

Although the Zanu PF government promised to create 2,2 million jobs by 2018 during election campaigns prior to the 2013 polls, company closures and job losses are increasing at an alarming rate.

Paradoxically, the Supreme Court on July 17 this year delivered the contentious judgment whose aftermath has caused carnage in the employment sector, with over 30 000 private and public sector employees losing jobs on three months’ notices with no compensation.

Forced by joblessness, many desperate Zimbabweans have turned to the informal sector, setting up small businesses to make a living.

Selling of second-hand clothes has now become big business for many desperate Zimbabweans. Cairo Bhaudhi, a mother of three, aged 21, fends for her family by selling second-hand clothes at a make-shift market on Shawasha grounds in Mbare. Bhaudhi is a victim of the economic failure that has resulted in job losses which didn’t spare her husband, who was retrenched in May this year.

“I started vending in May this year when my husband was retrenched by a security company after going for several months without pay. My husband was a security guard for many years but was retrenched even if the company says they had no money to pay him terminal benefits. He is also now doing casual jobs,” she lamented.

Selling second-hands clothes, mainly smuggled from Beira, Mozambique, which shares the border with Zimbabwe’s Eastern Highlands city of Mutare, have become a source of livelihoods for Bhaudhi and many struggling Zimbabweans.

Bhaudhi was with her three kids aged six, four and two when she spoke to the Zimbabwe independent.

“I don’t have plans for Christmas. After a day’s work, I take home US$4, which is too little to cater for my welfare. This year was difficult. I would have loved to visit my rural Mutoko home, but I don’t have money. We are living from hand to mouth,” she said.

Irresistibly, she sobs as she ponders on where to get school fees for her eldest child who starts first grade next coming year. Bhaudhi, who resides in Epworth, described her US$30 accommodation as a death trap saying it was unsuitable for habitation, especially during the rainy season.

The poor performing economy has prompted the proliferation of the informal sector and the subsequent increase of poverty levels.

It is estimated that 16% of Zimbabweans are living in extreme poverty, while the overall poverty rate stands at 63%, according to the Zimstat. The United Nations estimates that about 1,3 million people face starvation this year.

For former cross border driver Samuel Gavhumende — a casual welder at Magaba informal industry life is challenging as informal jobs do not guarantee social security.

“I don’t have medical aid, funeral assurance because I don’t have a steady monthly income. To make matters worse, I did not get any package from my former employer,” he said.

Gavhumende said he was lucky he left his job after 17 years after building a decent house and is rearing cattle at his rural home, which he sells to send his children to school.

Economist Kipson Gundani said the rapid growth of the informal sector shows that Zimbabwe has exported employment by having a huge import bill for basics.

Exports are projected to increase to US$3,7 billion in 2016 from US$3,4 billion in 2015, while imports are seen marginally declining to US$6,2 billion from US$6,3 billion.

South Africa accounts for 65% of Zimbabwe’s annual import bill. “What we are seeing is more and more people joining the informal sector not because there are incremental returns but to share the shrinking cake in that sector. If you look at the so-called informal sector it’s buying and selling (vending) and that’s the sign of economic underperformance,” Gundani said.

He said the economy was no longer generating same level demand because the real economy was shrinking, hence the decrease in aggregate expenditure. “If you pick vendors and ask their daily, weekly or monthly incomes since 2012 to 2015 you will see a decreasing trend in their incomes. This tells you that the informal sector is saturated. More people are entering it because there are no barriers to entry.”

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