MPs push for relief for informal sector

Source: MPs push for relief for informal sector – The Standard


Legislators are pushing for full support to be given to informal traders in the country through flexible banking terms.

Zimbabwe’s informal sector has grown tremendously due to de-industrialisation and job losses that ravaged the economy over the past decades.

The informal sector is now estimated to be constituting about 60% to gross domestic product, raising the need for authorities to come up with deliberate policies to formalise it to achieve economic development.

Legislator Mathias Tongofa, the chairperson of the parliamentary portfolio committee on youth told an informal sector workshop last week that government and the private sector must remove barriers and formalise the sector by providing market access.

“We cannot go outside the country to look for a market. It is more difficult to build a market in Mozambique when you cannot build a market here.

“Charity should begin at home.

“We can make sure there is a law that compels the private sector and government to buy from those small companies,” Tongofa said.

“If they have a problem of quality, there should be a deliberate effort to make sure the quality goes to the desired levels.

“That alone will make sure they formalise and will also make sure that they get money from banks and after that they can sell products to private companies and to government.

“Otherwise without connecting them to financial support and the local markets for a start (they will struggle to grow).”

Another legislator Elia Musakwa took a swipe at the country’s banking system that discourages informal traders from banking.

“We hear a lot of stories that informal traders have lost money at Mbare Musika and they would be carrying US$2 000.

“How do you explain to an informal trader to bank money where every month they are supposed to be charged a US$50 management fee?

“Already that US$50 is a livelihood to them,” Musakwa said.

“On top of that when they bank it as cash, 20% is already converted to RTGS at a ruling exchange rate and they are given Zimbabwe dollars. May be their profit was only 10%.

“When you take the 20% you are already taking the profit and part of the capital. So, they are broke before they go anywhere.

“I think the Ministry of Finance must explain how they expect people to bring money from their pillows to the bank.”

Legislator Edwin Mushoriwa highlighted that Zimbabwe needed to take a leaf from Rwanda where motor cycles used for public transport, commonly known as Boda Boda in that country, were formalised to contribute taxes to the economy.

The legislators’ contributions came at a time when the Zimbabwe Chamber of Informal Economy Associations has been pushing for an Informal Economy Bill to be adopted by Parliament.

The Informal Economy Bill seeks to create awareness among legislators and all government agencies about the role and importance of the informal economy in Zimbabwe and provide a proposed legal framework to the sector.

The draft Bill will lay the groundwork for creating an environment that respects and supports those in the informal economy, enabling them to have a livelihood and grow their businesses.