Vending not part of the economy

via Vending not part of the economy – The Zimbabwe Independent July 17, 2015 by Christopher Mugaga

A NEW phenomenon, city centre vending, is fast spreading at every corner of Zimbabwe’s urban centres most notably in the central business districts’ pavements.

The vending culture is so prevalent that unconfirmed statistics are putting the number of vendors in Harare alone at 100 000. A look-back at the same time last year does give a contrasting picture as they were just isolated cases of vending with the business only appearing brisk after working hours.

Last month witnessed the emergency of new theories on how to handle the issue of vendors, surprising many as “commentators” chronicled what could have triggered the spread of vendors over a five-month period from February to June. It is a fact that the level of economic activity has been slowing down but not to the extent of shipping out such a large volume of vendors over a five-month period. This leaves us to speculate on what could have attracted more people to vending of late.

The conflicting pronouncements by leading opinion makers on issues relating to vendors is a crystal clear source of discomfort on finding a sustainable way of dealing with such a phenomenon. Naturally, this leaves cracks which allow the continued survival of such an illegal economy.

Even if the products and services of vendors are to undergo a typical make-up, wearing a mascara cannot make a chimpanzee look much more beautiful. This is an unwanted economy which should not be allowed to last beyond a day in the undesignated sites of Zimbabwean cities. In the late 1980s, Mupedzanhamo or Siyaso in Mbare came into existence, it was the buyers who always had to find ways to go and promote such an industry. Therefore arguing that vendors cannot move because they have to operate close to their market is a loose statement.

With the Zimbabwe Revenue Authority struggling to raise enough tax and foreign direct investment low, it is quite risky to continue allowing vending in the CBD. It had decimated the prospects of bona fide retailers by crowding out their potential market through setting up stalls on their door-steps. What makes it ugly is the industry has spread to commuter vehicles known as mushikashika, music promotion stores with open air speakers blasting music at high volumes, car wash touts at many points in the city and middle-aged women selling concoctions which they claim enhance sexual activity.

All these shenanigans need to be nipped in the bud if a modicum of order is to return.

The vending business in Zimbabwe is much more underground than the conventional underground or shadow economy. Its prospects for meaningful growth is nonexistent as it can only help worsen the operating environment of honest businesspeople. It is not an activity which deserves classifying as informal employment and there is no intention to complement the already depressed capacity utilisation levels in our strategic sectors.

It is also disheartening for Zimbabweans to embrace such a worrisome development as part of the new economy, for vending is not really part of any economy. A dominant informal economy implies stifling of room for innovation and creativity, a higher propensity for smuggling different commodities, a depressed savings ratio as fewer citizens will be willing to be part of the formal banking system, an eyesore to the tourism products and services and last, but not least, a haven for ancient diseases related to hygiene.

We must enquire whether the long term consequences of a dollarised economy can be directly linked to the emergence of vending business. By nature, vending is more underground and shadowy than an ordinary blackmarket which normally arises as a result of government intervention in the operations of general pricing mechanism. A black-market inspires market shortages which force government to act whilst vending does not disrupt the product supply, resulting in government to treat such a development as a less urgent matter.

The ease of doing business in Zimbabwe remains low, with a 2014 ranking of 172 out of 189 countries which marks a 14- point decline in five years. The prevalence of vending sites in every city of Zimbabwe can only worsen the ranking status leaving Zimbabwe as an even more unattractive investment destination.

The duty is for the Zimbabwe National Chamber of Commerce, alongside the Confederation of Zimbabwean Industries to come up with a policy proposal on finding a long term solution to the problem. No rational investor would want to bring their business ideas to a nation where he is expected to compete with an unregistered trader whose only obligation is to create a market without adhering to rules and regulations relating to ethical business practices.

It is my fervent hope that the government will treat the issue of vending with the urgency it deserves without being swayed by any interests outside socio-economic justifications. It is worrisome that vending has even hit the land sector with a number of land barons implicated in scams operating under cover of vending. They embrace parcelling out land without following the due process to do with title deeds registration, transparent allocation and land development before setting up proper structures.

If Bulawayo and Victoria Falls can afford to co-exist with small traders without facing unacceptable challenges which Harare and Gweru are facing, it means it is highly possible that these towns can be brought back to orderliness. Honestly, one cannot claim that poverty levels are higher in Harare than Bulawayo and that is the reason why vendors have masked almost every sphere of activity in Zimbabwe’s main city.

The spread of vending activities is a symptom of a working class populace migrating from the production biased continuum to a consumer facing kind of economic activity. A culture which is growing in Zimbabwe is that of citizens who want to sell tomatoes, cellphones or vehicles as opposed to going to the farm or factory to produce.

Christopher Takunda Mugaga is the Chief Executive Officer of the Zimbabwe National Chamber of Commerce.