Zimbabwe: Economy slowdown turns country into one massive marketplace
By Michelle Chifamba, Harare – Thirty- five year old Teclar Chakoma, a single mother of three, lost her job in 2009 and turned to hawking vegetables and carrier bags at shop exits, managing to cater for her family’s needs.
“The company I was working for unfairly dismissed me without any terminal package,” Chakoma said. “I tried to fight them but realized I could use up all of my savings on a lost battle so I started cross boarder trading but the proceeds could not sustain me as I had to send my three children to school and pay the bills.”
As the country’s economy continues on a slowdown and companies disgorge workers, most to eke out a living as petty traders, the largest fruit and vegetable market in Mbare is slowly becoming too small as daily, redundant workers and jobless school leavers join stallholders at the bustling marketplace.
With formal marketplaces like Mbare full to capacity, suburbs across Zimbabwe are slowly turning into massive flea markets with various kinds of businesses – from small makeshift vegetable stalls at nearly every house, mobile traders with carts laden with various merchandise and hawkers on foot – competing for customers.
In cities, vendors desperate to earn a living, are improvising makeshift stalls on pavements sometimes overlapping into streets and parking bays.
It’s a tough life for Chakoma these days as she has to fight off competition from the fellow traders whose numbers are swelling by the day as well play cat-and-mouse with municipal police.
“It is a daily fight for survival in these streets. Sometimes I feel like giving up and look for something else,” Chakoma said. “Both the municipal police and Zimbabwe Republic Police often harass us and sometimes extort our daily income while at times the wares are confiscated.”
Fifty- three year old Tadiwa Mangisi runs a stall at Mbare Musika selling sweets, floor wax and drinks but her meagre takings are often not enough to feed her three grandchildren.
“I do not raise enough money to even to pay an electricity bill, food and send my grandchildren to school,” said Mangisi.
“My water bill is over $500 and I don’t know if I will ever be able to pay that huge bill from my meagre earnings in the streets.”
With most companies operating below capacity, some closed and many still closing, the resultant hardships have spawned new phenomena of graduates who will have never known formal employment as well as child vendors.
Meanwhile, children bear the brunt as they grow without the parental care of their mothers who are often too busy trying to earn a living as vendors to pay attention to their children’s well-being.
Some children also end up dropping out of school and wind up as vendors and street hawkers.
“The implications remain severe because morality of any society is judged by the way we treat our children,” said Philip Bhowasi, the chairperson of Social Workers Association.
“The influx of the working population on the streets scratching out meagre earnings will cause the future of the young children to be compromised as they will be forced out of school when their parents fail to pay their fees because it is apparent that the proceeds from the vending is not adequate to sustain a normal household.”
The July 2013 National Social Security Authority (NSSA), Harare Regional Employer Closures and Registrations Report for the period July 2011 to July 2013 shows 711 companies in Harare closed down, rendering 8 336 individuals jobless.
Statistics in the NSSA report tally with findings by the Zimbabwe Congress of Trade Unions (ZCTU) which also revealed that about 9 500 workers were retrenched last year.
Zimbabwe’s unemployment levels are estimated at between 80 and 94 percent contrary to Zimbabwe National Statistics Agency indications that only 11% of the population is unemployed.
Economist Godfrey Kanyenze said the government has no capacity and has not shown real determination to mend the economy. The poverty levels will continue to rise as a result of government policies which are pro-poor.
“The recent plans by the government to tax the informal sector will further in- formalize the economy, while the same time punishing the few people working will not create a boost to the economy,” said Kanyenze.
“After paying for all the tax, one does not feel that the government is taking care of its people.”
Zimbabwe a signatory to the 2015 Millennium Development Goals (MDGs), in which goal number one is to half the levels of poverty- yet according to a 2014 publication by the World Bank, Zimbabwe has grown into a high cost economy and as a result has failed to attract investors.
“Zimbabwe is no longer competitive,” Kanyenze said. “Globally high interest rates are below 2 percent while in Zimbabwe the interest rates are 16 percent. Clearly that chases away investors, at the same time the Zimbabwe government is hiding behind the ZimAsset document which it uses as a propaganda document ignoring the problems facing the economy.”
When the economy was in a healthy state, the bulk of government revenue came from tax collected from companies but over the years industries remittances to the national coffers are dwindling as companies close and policies such as Indigenization and Economic Empowerment Act scare away potential investors.
Continued company closures have forced the government to resort to taxing the informal sector- which is believed to be circulating close to USD7 billion although no research has been undertaken to ascertain this.
“Heavy taxing by government can have a boomerang effect on the economy as the people being burdened by the taxes will devise ways to evade taxes, increasing the chances of smuggling of goods into the country,” Kanyenze said. “Over taxation further informalize the economy, while the same time punishing the few people working will not create a boost to the economy.”
An analysis of the history of social safety nets in Zimbabwe indicates that they have failed to provide basic financial security, protect vulnerable groups including people with disabilities, and promote equality of opportunity.
“For the poor to participate and benefit from economic growth, they need skills and ownership of asserts such as land, access to education and health, capital and infrastructure.” Kanyenze said, “Therefore the government needs to improve labour productivity and reduce costs for the poor to access sectors where growth is taking place.”
