adminNgoni Dapira Business Correspondent
MURAHWA Green Market in Mutare is a one-stop-shop where any service is guaranteed from metal work, carpentry, motor mechanics and tin smiting to mention a few.
The place has been home to most of the local entrepreneurs since the 1980s to-date, housing over 500 entrepreneurs, both formal and informal.
Since dollarisation in 2009, large scale-manufacturing companies in the formal sector have been struggling to recapitalise and the informal sector has become the backbone of most livelihoods in the country.
It is estimated that over 80 percent of the country’s existing businesses are SMEs and the bulk of them are operating as unregistered entities with the parent Ministry claiming that $7,5 billion is circulating in the informal sector.
In an interview, Murahwa Green Market chairman, Mr Earnest Muchakuya who runs his own metal workshop said formalisation of SMEs was very important.
Economists have argued that for the formalisation of SMEs to be successful, Government should focus on five key areas, sectoral registration, labour formality, financial inclusion, market linkages and pricing as well as formalisation of their work-spaces (informal traders).
Mr Muchakuya, however, said the first critical step to achieve in the formalisation drive was formalisation of work places.
“The problem is that Government and its stakeholders are prioritising registration with focus on increasing its tax bracket. But what they should think of first is the operating environment of most SMEs. We all want to contribute towards the fiscus and grow our economy, but it should be a win-win situation,” said Mr Muchakuya.
A recent tour of the Murahwa Green Market showed that the place was an eye-soar as most of the work stations are now rundown, the roads are badly potholed with no visible demarcations and it is now more or less a ‘free for all zone’ where informal traders are just setting up unauthorised operations wherever they want.
There are 74 authorised workstations in dire need of renovations, while the toilet amenities are deplorable for a public market place that houses many people.
Regardless of the fact that the local authority rakes in tens of thousands of dollars every month from shop licences and rentals, little has been done to improve on the infrastructure and the business interests of the entrepreneurs at Murahwa Green Market.
“As much as we might want to support the idea of formalisation, the most important factor that attracts buy-in from the informal traders is clearly being overlooked. Government may talk about $7,5 billion being lost to the informal sector, but on the ground we are saying we are not making that much. We are actually losing a lot of money because of the poor operating environment which makes potential investors and up-market customers shun our products,” said Mr Muchakuya.
Manicaland Chamber of SMEs chairman, Mr Andrew Ngondonga, who is also into metal work, running a thriving trailer manufacturing business, concurred that little was being done to develop the workplaces of informal traders.
“For Government to gain full support it should be a give and take. How can a parent expects money from his or her child without investing in education and all the necessary preparations for a child’s proper upbringing? This is our dilemma in the formalisation drive. We need enablers to elevate our business before Government thinks of taxing us,” said Mr Ngondonga.
In the wake of soaring unemployment levels in the country and increasing number of graduates joining the informal sector to earn a living, Murahwa Green Market is turning into a lawless free zone and an awaiting time bomb.
When you enter the premises, informal traders with no authorised stations are now the marshals who steal customers. The operators who pay shop licences to the council are now losing business from the illegal operators.
Mr Ngondonga said this would eventually force people not to pay rentals because the municipal officers just leave the lawlessness to continue unabated.
“We need to get value for our money, but this has not been the case. It is a time bomb that will soon explode. Formalisation is very important, but Government needs to look seriously into the essentials and not bookish theories by people in workshops for its success,” said Mr Ngondonga.
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