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IT has become a reality that Zimbabwe has an emerging economy dominated by the small to medium enterprises and the informal businesses. While this has been described by some critics as a sign of a collapsing economy, what the critics fail to explain is that what has died is the inherited Rhodesian economy and what has risen in its place is a truly Zimbabwean economy being driven by a resource-owning, wealth creating middle-class.

The nascent industries are promoting inclusive growth as the previously marginalised people can now participate and benefit from diverse economic activities. We have heard stories about countries, particularly in Africa celebrating double digit economic growth on the back of foreign-owned multi-national corporations that repatriate the profits to their home countries without improving the livelihoods of the people in the host countries.

Indeed, economies are growing, but the inequality gap continues widening. In Zimbabwe, the new economy dominated by small to medium enterprises and informal business, has created a new revolutionary economic and social paradigm.

We urge the Government to come up with an inclusive policy mechanism that integrates economic activities in both formal and informal sectors. At this juncture, we applaud plans by the country’s biggest insurance firm Old Mutual to acquire a micro-finance business to support the informal sector and small scale enterprises.

The company says it recognises the shift that has happened in Zimbabwe’s economy where the informal sector now accounts for a significant part of the economy. Old Mutual believes it can play a role in supporting the informal sector and as part of its strategy and plans to acquire a micro- finance institution to support the informal sector.

The group believes that partnering a micro-finance company would provide a good platform for funding the informal sector.

Old Mutual’s plans dovetail with developments in Zimbabwe’s economic landscape that has witnessed the emergence of a new economy.

There is also need for some reform in the financial sector to come up with a new model of banking which complies with the requirements of economy.

The culture of being an employee for big business has been replaced by an empowerment mentality in which most Zimbabweans have literally become their own bosses. The assertion that Zimbabwe’s economy is dead rings true only to the extent this relates to the old economy, characterised by large foreign corporates, which have since been replaced by a new breed of small and nimble mostly indigenous owned enterprises.

Whereas the informal sector, dominated by large corporations played the key role in the economy, income generating projects by SMEs and the informal sector has become an integral part of the economy, especially when it comes to employment.

In this regard, the demise of the old economy controlled by multi-national corporations was a boon for micro-small and medium enterprises and the informal sector, which now employ the bulk of economically active Zimbabweans.

As such, an inclusive policy should be formulated to extract the economic potential of these sectors.

Statistics show that the informal sector is thriving and continues to grow withstanding the liquidity challenges which have undermined big traditional businesses. Therefore the realisation by large corporates of the importance of the informal sector on the economy is plausible.

Apart from access to financing, the informal sector requires assistance to organise them into formal taxpaying businesses. They require training and coaching in income management, accounting, tax management and labour related issues.

Capacity building for the informal sector is critical. The Zimbabwe Revenue Authority commissioner general Mr Gershem Pasi once said that the size of the business should not be synonymous with informality. All businesses whatever the size can be capacitated to an extent where they can play a key role in the economy.

Therefore the entrance of experienced corporates such as Old Mutual into the sector will no doubt improve the way they do business.

Last year’s FinScope Consumer Survey showed that 53 percent of adults in Zimbabwe do not save (decreased significantly, 37 percent in 2011) while 12 percent keep all their savings at home, that is, they do not have/use formal or informal savings products or mechanisms.

The unbanked population will sign up to micro-finance products, having confidence in the solid business such as Old Mutual guaranteeing investments.

We therefore call on the business community to join Old Mutual and come up with strategies and products to capacitate the informal sector. These products should also be extended to the rural areas where over 70 percent of the population lives.