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Sanderson Abel
It is not debatable that the informal sector complements Government initiatives in various ways. The informal sector provides employment and incomes to millions of people who otherwise would have no other means of survival. The sector has become the breeding ground of entrepreneurship with the families passing on the practical skills from one generation to the other. The ability of the sector to play these important roles invokes the question that: Is the sector garnering enough support from the authorities in the jurisdictions they are operating from.

Who controls the  informal sector jurisdictions?

The perception of the local authorities is very important in shaping the destination of the informal sector in Zimbabwe.  If they perceive them positively then there is great scope for the sector to support the government vision as enunciated in the Zimbabwe Programme for Sustainable Social and Economic transformation (ZimAsset). The programme has identified that the economy has undergone

tremendous transformation where the informal sector has become the new dominant force replacing the yester-year industries which were driving the economy. Currently the vast majority of the output produced in the country is being produced from this sector.

This would also provide opportunities for Banks; insurance companies and other service providers to provide the other critical ingredients for the operations of these players. A participatory, multi-sectoral and multi-stakeholder approach is vital in the whole equation for the successful contribution of the informal sector to local authority development.

Do local authorities benefit?

From laundry services and fresh vegetables, to fresh cut flowers and providing haircuts, informal enterprises (whether a one-man enterprise or a family enterprise) respond very quickly to market needs and consumer demands, much more so than formal enterprises. In most circumstances these products and services cannot be provided by the formal sector players.

Do local policies and regulations support informal sector growth?

One area that have been identified as weak link point of the nexus between local authorities and informal sector is the local authority by laws which does not recognise the role played by the later.

There is general need to revisit some of the by laws in light of the country’s new dispensation. These laws and regulations should be must not hamper the potential of the sector for economic growth.

A consultative approach to the development of the by laws must be the rule and not exception.

If the by laws and regulations are developed in a participatory manner, the common sight of running battles between the municipal police and the informal sector traders will become a thing of the past.

It is in light of the potential of the informal sector to expand employment opportunities in an environment where the formal sector is shrinking and thereby condemning thousands of people to destitution, the sector needs to be promoted.

What other mechanisms  can local authorities use?
Local authorities should develop mechanisms that help the informal sector to increase their contribution to local authority development.

The local authorities should play a role in assisting this sector to blossom through removing the challenges of:

◆ Lack of premises to operate from;
◆ Negative by-laws which lead to harassment of operators;
◆  Poor marketing facilities
◆ Spiraling prices (and sometimes unavailability) of raw materials;
◆ Inadequate skills and lack of facilities to upgrade skills; and
◆ Lack of tools and machinery.

These challenges does not only limit the economic success of the informal sector, but also perpetuate informality by increasing the cost of entering into formal sector activities.

It is therefore important that as local authorities discuss issues of PPPs and twinning arrangements with foreign cities should actually put the informal sector development as agenda item.

◆ Sanderson Abel is an Economist. He writes in his capacity as Senior Economist for the Bankers Association of Zimbabwe. For your valuable feedback and comments related to this article, he can be contacted on [email protected] or on numbers 04-744686 and 0772463008