adminProfessor Ncube, however, said that informal traders should adopt a 75 percent local content quota in respect of the goods that they trade in.
“The informal sector is an important sector of our economy and is not a negation of the country’s industrial sector. We should encourage it.
“The problem is not an increase in informal vending, but rather in the basket of what they are trading. Ideally at least 75 percent of what they sell should be local products,” he said.
Informal trade is part of the “informal economy”, which is generally described as the diversified set of economic activities, enterprises and workers that are not regulated or protected by the state.
To this extent, the Government will have to legislate to impose such a quota system, which basically constitutes the sector’s formalisation.
The country has been suffering from high levels of importation, which has affected local productive industries.
Compelling informal traders to predominantly sell locally-produced goods can help in boosting local demand for such products as such providing impetus for the manufacturing sector.
This would be in line with the key aim of the Industrial Development Policy (IDP), which along with the National Trade Policy (NTP) was launched in Harare.
The overall objective of the IDP and the NTP is to restore the manufacturing sector’s contribution to the country’s Gross Domestic Product from the current 15 percent to 30 percent and its contribution to exports from 26 percent to 50 percent by 2016.
Industrial development and trade policies are typically interventionist.
“Protectionism per se is not sustainable, but as Government we have already been taking measures to ensure that local industries become viable and there is balance in trade,” said Professor Ncube.
Meanwhile, there are concerns that the manufacturing sector is not just facing a challenge of constrained funding, but also one of lack of “institutional uptake capacity”.
Professor Ncube partly attributed the slow uptake of availed funding windows to this lack of capacity.
“The low uptake of facilities such as Distressed and Marginalised Areas Fund (Dimaf) and the Zimbabwe Economic and Trade Revival Facility (Zetref) is a point of concern. For instance, the Zetref has been operating for over two years now yet the bulk of it was taken up just recently.
“I would ascribe it to two factors: firstly the rules and conditions for accessing these funds which we attach are not suitable in our current economic state.
“Secondly, it may be that the institutional uptake capacity of our manufacturing businesses may be very limited,” said Professor Ncube.
He also said the Government had “faint hope” of accessing the Botswana credit facility.
“We have faint hope of accessing those funds, but as long as they say the funds remain available we will continue pursuing by addressing the issues that need to be addressed,” said Professor Ncube.
Online Reporter