Informal sector thrives as unemployment grows

via Informal sector thrives as unemployment grows | The Zimbabwean by Nelson Sibanda 25.09.13

After Rodwell Muyendesi (45) and Silas Mwafa Tapomwa (42) of Chitungwiza were retrenched in 2004, they joined the informal sector, setting up a shoe manufacturing shop in their Chitungwiza backyard.

Today, they make an average 10 pairs of shoes every day. “The industry is lucrative and we have managed to provide for our families ever since we decided to venture into the trade,” said Tapomwa. From $10 kg of leather, they make four pairs of adult shoes.

He said their products were stronger than imported Chinese footwear, giving them an edge on the market. Following the shutting down of major shoe manufacturing companies and the Zanu (PF) look East policy, the Zimbabwe shoe market was flooded with Chinese footwear.

Nearly four million Zimbabweans now depend on the informal sector, which contributes about 20 percent of the Gross Domestic Product, an equivalent of some estimated $1. 73 billion, according to the Zimbabwe National Statistics Agency survey conducted in 2012.

With unemployed estimated at between 85 and 95 percent, a collapsed agriculture sector and an ailing manufacturing industry, the need to survive has pushed most former workers into the informal sector.

“Government should help boost the industry by removing import tax duties on raw materials,” said Economic analyst, Eric Bloch. He also called on government to introduce export incentives for the shoe manufacturing sector, in order to earn the country foreign currency and create more job opportunities.

According to the African Development Bank limited access to capital was one of the major reasons why the informal sector flourishes.