via $7bn circulates in informal sector | The Herald April 4, 2014 by Zvamaida Murwira
At least US$7,4 billion is circulating in the informal sector and Government has taken a deliberate move to formalise operations in that market in fulfilment of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation provisions, a Cabinet Minister has said.
Small and Medium Enterprise and Co-operative Development Minister Sithembiso Nyoni said the fiscus was losing substantial amounts of money from this untapped sector and formalising such activities would go a long way in achieving this objective.
She said this in the National Assembly while delivering a ministerial statement to update the House on what her ministry was doing to formalise the sector.
She said 5,7 million jobs have been created from 2,8 million small businesses, while 800 000 small business had employed 2,9 million people, according to an SME survey conducted in 2012.
“At least US$7,4 billion is circulating in this sector. Just imagine if the 2,8 million people were to pay US$1 per month, what that would contribute to our fiscus.
“The informal sector comprises unregistered and unregulated people who chose to avoid registration and therefore taxation,” said Minister Nyoni.
She said registering the informal sector would allow them to enjoy some benefits which they had not been getting.
Formalising the sector, she said, entailed registering, licensing of their economic activities, ensuring that they have addresses, registering them as private limited companies and sole traders or partnerships.
This, she said, would also mean they pay statutory obligations such as National Social Security Authority and the Zimbabwe Manpower Development Fund, among others.
Minister Nyoni said all these efforts were consistent with a major Key Result Area of Zim Asset.
A national steering committee comprising all relevant Government ministries had since been set up.
In response legislators, while commending the Minister, expressed concern on issues of corruption, absence of inclusivity of the process and how the rural population would benefit.
Southerton MP Mr Gift Chimanikire (MDC-T) said there was need to stem corruption and gave an example of Zanu PF youth leader, Cde Jim Kunaka whom he said was ripping off SME operators in Mbare.
Acting Speaker of National Assembly, Cde Reuben Marumahoko asked Minister Nyoni to respond to allegations that Cde Kunaka was ripping off SME operators in Mbare and she said she had she had not received any complains to that effect but would investigate should there be a formal report.
Cde Chimanikire said SMEs were at times handled in a partisan way.
But Minister Nyoni said her ministry was there to help SMEs regardless of their political affiliation.
Hurungwe West MP, Cde Temba Mliswa (Zanu-PF) said the ministry should consider taping into agriculture particularly on the rural folk who make the bulk of agricultural output.
Non-Constituency MP, Ms Thokozani Khupe said there was need for a women’s bank using the US$100 million that was set aside for the 2014 national budget.
Minister Nyoni said they would be grateful if her ministry was to receive the US$100 million as the tendency was to have an allocation in the budget which would not be disbursed.