Time ripe to formalise Zim’s informal sector

Libya, which has influenced oil prices to shoot through the roof.
While the civil strife back in Egypt continues to rage on back home focus this week was on the mining sector.
The week began with prediction that the sector might expand by an average of 44 percent this year.
This coupled with rising capacity utilisation in most sectors of the economy is definitely expected to ease the inflationary pressure inspite of gloomy news emanating almost every corner of Africa.
Most of Zimbabwe’s retail shops are improving in both their stocking levels and quality.
What used to be tissue shelves are turning into shelves for high value commodities.
Spar outlets are dominating the market, followed by OK’s plethora of different brands, Bon Marche, OK Zimbabwe and OK Express, TM Supermarkets, Afrofood and Food World.
The bad news, however, is that most of Spar’s products are purely South African whilst the good news is their dominance has been exerting a downward pressure on food inflation.
As the first quarter gives way to the second quarter an opportunity is availing itself to the Zimbabwean Government to consider formalising the so-called informal sector since it is a real threat to economic growth with almost 100 percent of its activities not contributing to the fiscus whatsoever.
Month-on-month unemployment remains highly unattractive with less than 2 000 people joining the formal sector every month.
Consumer confidence is relatively mild with only one in four residents being aware of the policy implications and direction the economy may follow.
The words empowerment and indigenisation have since January been mentioned more regularly than at any other point in the history of the nation.
A snap survey points out that the words are mentioned at least thrice in every daily publication coming out of Zimbabwe per week, and at least twice in the electronic media.
This could be an opportunity for Zimbabwe to substantiate on its policy pronouncements whilst at the same time allowing reason to take precedence over emotions.
We consider the local economy to be one of the most fragile as witnessed during the past decade.
This is the opportune time to define what we want to see come year-end without having to cow ourselves into superfluous policy committees which would amount to nothing but mere talk.
The second quarter should give us the room to know what needs to be rectified starting with the symptom or the sickness itself.
Indigenisation is purely indispensable but let it trail the privatisation agenda so that we would not be seen holding onto dead capital, which will dump the growth potential since the initiating factors necessary for an economy to take off would have been curtailed.
It is more feasible and applaudable to privatise Air Zimbabwe before we put our hands on RioZim even though we need to be in the mining company eventually.
We need to look at our parastatals first and their capabilities. In my view, even if Zesa was to be given a chance to supply electricity to Harare province only, there would still be power cuts.
So what could be the way forward? The solution lies in having management contracts, which have to be reviewed regularly.
Last week I touched on the decay within the Harare’s CBD due to illegal vending activities and early this week I had an opportunity to travel to Vereneking, a mining town about 150 km outside Johannesburg.
The trip was an eye-opener for me because the small town was so clean that throwing even a banana peel on the ground could be so embarrassing.
This does not mean there are no vendors in the small town but rather its accountability, which makes a difference.
I believe that our local authorities can learn a thing or two from such cities and towns.
Let the second quarter be an opportunity to remind the next generation that in the midst of both economic and travel sanctions, Zimbabwe is not doomed.
We need to redefine our pace as a nation if we are to be counted. We need to find activities that further boost our morale as a nation.
Despite the catastrophic effects of a tsunami and earthquake that rocked Japan, the Japanese leadership is already bidding for the 2022 Olympics knowing well that the world does not stop moving due to catastrophes that befall a nation.
They believe it is an opportune moment for them to offer hope for their tsunami and earthquake-stricken citizens.
Let us also heal the nation and not remind our kindergarten kid that his academic experience will count to nothing unless sanctions are lifted.
No one will carry our values as a nation except ourselves, the capture of Laurent Gbabgo in Cote d’lvoire might not bring much needed results even though he seemed to be a nuisance to his country.
The removal of Muammar Gaddafi might not make fuel affordable in this part of the world just as the coming of Obama to White House did not bring relief to Africa even though he is African-American, so let’s do away with naivety as a nation.
Let us utilise the current economic quarter and make Zimbabwe a better and safer nation for investment by both locals and foreigners.
Thank you and God bless you.
Quote of the Week: “He who slaughters his cattle today shall thirst for milk tomorrow.”
Christopher Takunda Mugaga
Head of Research
Econometer Global Capital
[email protected]