TODAY Zimbabwe’s emasculated trade unions will in some cities lead low-key events to mark Workers Day, fully aware that the formal sector from which they drew their clout is an endangered species, driven to near-extinction by the informalisation of the economy.
Were it not for the entertainment activities they line up to woo crowds, most of the unionists would speechify to virtually empty venues for nothing they say can lift the pervasive gloom brought by job losses.
Quickening company closures, wrought by a hostile economic climate typified by the liquidity crunch, have thrown thousands of workers onto the streets.
With the falling number of formal sector workers trade unions find themselves increasingly impotent as the scarcity of formal employment renders workers at the mercy of the employer.
The retrenchments have fed the informal sector, now threatening to effectively take over Harare’s CBD which has become a chaotic work station to ubiquitous vendors.
Such informalisation is much in evidence even at the Zimbabwe International Trade Fair, officially opened yesterday. Far from being “a platform for bringing together multi-sectoral interests across all business sectors while showcasing vast investment opportunities in Zimbabwe”, the fair has mutated into a large flea market.
Hardly surprising, for the informal economy in Zimbabwe has been growing fast on the back of declining formal economic activity, becoming the largest employer as company after company closes shop, in what in some cases is a tragic domino effect.
According to data quoted in a Zimbabwe Economic Policy Analysis and Research Unit (Zeparu) study titled “Harnessing Resources from the Informal Sector for Economic Development”, 84% of the currently employed population aged 15 years and above is in informal employment.
While lauding the growth of the informal sector as emblematic of the “new economy”, government has in the past in fact clamped down on the sector, as noted by Zeparu. As informal traders increased and became more aggressive in tandem with a deteriorating economy government in 2003 enacted the Hawkers Act which mandated e police to clear all unlicensed street vendors operating in urban areas.
This partly informed the infamous Operation Murambatsvina which chased vendors off the streets and closed flea markets, with bulldozers razing down illegal structures.
How things have changed with the enactment of the Indigenisation Act to, among other aims, promote growth of indigenous entrepreneurs. According to the FinScope 2012 survey on Small to Medium Enterprises, there are over two million individual entrepreneurs and 800 000 SMEs with employees, and these are estimated to be employing over 2,9 million people.
The informalisation has spawned grave financial problems for government, itself due to retrench, with the recent bonus-suspension clash a clear testimony.
Economist John Robertson could not have put it any better: “Very lucky employees now have to look after their employers, because chances that they will get another job if they lose the one they have are slim to none!”