adminmillennium, it seems business ethics have been thrown out of the window and replaced by rampant opaque activities which have been prejudicing the city treasury of enormous amounts of money.
The emergence of boutiques in Harare is turning into a business anomaly as they are not adding any value to the city.
They have become a negative externality, which is not contributing whatsoever to the growth and development of our city, as some are not paying rates.
In its last budget allocation for 2012, Chicago city in Illinois, United States, received a sum of US$4 billion which eclipses Zimbabwe’s National Budget.
Despite the fact that Harare has potential to meet the world-class standards, the paltry sum that the Harare Municipality is receiving from rate payments will not change the face of the city.
In the next few years, the headaches of poor sanitation, lack of infrastructure investment, power outages and a burgeoning housing backlog will eventually reach breaking point.
Government should come up with a plan to ration and utilise the scarce space within the CBD the same way they had refurbished the roads network system by introducing one-way streets.
For a nation to continue announcing a budget that is below US$4 billion and expect private sector investment to be complemented by such a unprofessional model of business is asking for too much.
These businesses, most of which are owned by foreigners, are not even remitting taxes to Zimra, which means they are illegal structures.
It should be condition that no foreigner will open a shop in the retail sector until the economy gets to a certain stage of development.
Ironically, it’s so hurtful to realise that a nation ravaged by sanctions is a nightmare for local businessmen but a paradise for foreigners.
It’s unfortunate that residents of Abuja, Beijing, Kinshasa or New Delhi are being allowed to crowd out locals in businesses such as internet cafes, restaurants, spares, clothing and electrical shops that are not contributing to the growth of our cities.
In addition, most of the shops operating in the city are not innovative in their approach and they tend to sell homogeneous products, which do not add value to economic development.
Government should ensure that local authorities adhere to the provision of the Indigenisation and Economic Empowerment Act when it comes to issuing shop licences.
The empowerment law clearly specifies that the retail sector should be reserved for locals.
In addition, it should also ensure that these foreigners abide with the labour laws in the country as most of their labour practices are designed to oppress employees, most of whom are locals.
Almost 98 percent of employees in the sector do not have pensions or medical aid, that they are mostly in the late 20s to late 30s, a factor that shows little promise for Zimbabwe’s public finance system.
Faced with such a situation it was disappointing that Finance Minister Tendai Biti failed to address this worrying situation in his voluminous 2013 National Budget.
The minister was so worried that the bank charges were impoverishing the people but at the same time he could not connect the dots on the implications of a dysfunctional pension system to the economy.
Incidentally, the CBD has been portioned into the completely informal segment, which ranges from Julius Nyerere Way to Rotten Row, and the quasi-formal zone from Julius Nyerere Way to Fourth Street.
The chances of curtailing the stratospheric unemployment rates given such an economic structure are almost non-existent.
Christopher Takunda Mugaga is an economist and Head of Research at Econometer Global Capital. He can be contacted on 0772340353 / 0776266062 or [email protected]
Online Reporter