GOVERNMENT should put more designated places for vendors as the constituency is a critical player in the economy, experts have said.
BY TATIRA ZWINOIRA
The call comes at a time President Robert Mugabe has lambasted street vendors for making Harare filthy and implored Local Government, Rural Development and National Housing minister Saviour Kasukuwere to bring order to the capital’s streets.
National Vendors’ Union of Zimbabwe (Navuz) leader Stern Zvorwadza told NewsDay on Monday that street vendors were a major part of the economy in not only creating wealth, but employment as well.
“I am sure you would agree with me that the informal economy work is driving the economy of Zimbabwe and we have seen over the years that if it was not doing as it is now, then government would be in a very difficult position. We know by-laws, statutes, and spirit of the Constitution that if people are struggling in the country they have to be supported by social welfare,” he said.
“The informal economy workers are marginalised and earning very little and if driven off the streets through the President’s proclamation, it means that these people will be subjected to serious poverty and financial challenges. If they are pushed off the streets; government must start paying them every month.”
He said, vendors know government is bankrupt and are questioning why government would want to get an additional cost in looking after their welfare, instead of seeking ways to formalise their trade.
Navuz has a membership of 100 000 vendors. It is estimated that there were 2,2 million hawkers in Zimbabwe as at the end of April, a number that has since grown.
Basing on their average daily takings local street vendors generate an average $3,96 billion annually.
In August, Reserve Bank of Zimbabwe governor John Mangudya recognised the large amount of cash generated by informal traders and called for their formalisation.
Even manufacturers of fast-moving consumer goods are now preferring street vendors to retailers due to their ability to pay them in cash, not caring about bypassing supermarkets and wholesalers.
Notable companies engaging in the practice are Cairns and Dairibord.
Government has failed to come up with proper legislation to govern vendors.
In 2014, Parliament of Zimbabwe held consultative meetings with Navuz that saw them draw up the “Street Vendors (Protection of Livelihoods) Bill” which has been gathering dust since then.
If such legislation were to pass, for an economy whose budget averages $4 billion year on year, vendors would be willing to pay 10% tax deductible, which would translate into $396 million in extra government annual revenue.
Such a Bill would also see them getting social security, where at another preferred five percent monthly contribution towards the security would see the National Social Security Authority earn $16,5 million a month for an annual $198 million.
Government has a Social Welfare Fund which is supposed to care for families, disabled children, and the health sector, which would be a major cost for the government though this fund is supported by the Constitution of Zimbabwe.
Such a fund would drain Treasury billions of dollars if the 2,2 million street vendors are pushed off the streets.
Despite the revenue generation and recognition of street vendors, government seems settled to get presumptive taxes of 35% per dollar earned and $30 from paying monthly rental fees at designated areas.
Zvorwadza said vendors were on the streets due to a shortage of designated vending areas.
“If we are talking about designated areas, we are talking about places that are habitable, places that people can sell their produce where customers can come and buy. They are talking about designated areas which are fictitious and out of this world. If you look at it from 1980, only 1 185 designated vending stalls or places have been created,” Zvorwadza said.
This has seen the majority of vendors taking shifts in using the “designated” vending stalls.
The shifts see vendors rotating in the use of these stalls, one for morning, another for the afternoon and the last person for the evening up till midnight.
This means that already street vendors can only make up to business to a certain point, with the evening vendors benefitting the most from the fact that consumers would now be heading home from work.
The major tactic being used by vendors to move their wares is selling a higher quantity of goods at a cheaper price especially low-end goods.
For example, Pascal chocolate bars are being sold for $1 for four against the market price of $0,50 each and three small packets of Lays potato crisps for $1 for three against a market price of $0,50 per packet.
One street vendor, who operates along Julius Nyerere Way in the central business district, Winnet Winnet, said she could not leave the streets as she did not have any job opportunities despite having qualifications.
“We do not have a lot to do. We are being told to go but where to? Right, now 95% of people are all vendors,” she said.
From her wares, Winnet can make $10, half of that amount going to repurchasing stock, leaving the other half as profit.
Winnet sells textiles and vegetables every day to fend for her four children.
“We are surprised that the President has said we must get away because we do not have anywhere to start or begin. This is our livelihood and even this is not enough as we are struggling to eke a living,” she said.
Buy Zimbabwe chief economist, Kipson Gundani said there was a need to examine why vendors were on the streets instead of focusing on the contribution of street vendors.
“I do not think that these people are on the streets because they chose to be on the streets. They are there because there are limited opportunities in the formal economy. This economics matter, if you move them from the streets, they will go somewhere where they will get returns so that is not necessarily dealing with the problem,” he said.
“Try to understand if there is any value addition of street vendors in terms of economic growth. You will discover that street vendors are not involved in any production except selling consumable goods.”
Gundani said the majority of products sold on the streets were from local manufacturers showing the contribution that these street vendors make.
“Local manufacturers themselves are looking for money from the streets because the formal sector is no longer liquid as it should. So this whole entire thing shows that there is an economic misnomer which will not necessarily be dealt with by displacing street vendors,” Gundani said.