via Retailers lead in job creation | The Herald August 25, 2014
RETAILERS, wholesalers and commodity brokers have emerged as Zimbabwe’s biggest formal employers, accounting for nearly one third on new jobs in the past 18 months.
Latest statistics obtained from the National Social Security Authority on new business registration over the last 18 months show that 52 050 new jobs were registered.
NSSA registered 5 771 new businesses with retail, wholesale, stockbroking, agriculture and construction accounting for about 50 percent of the new employers.
However, the numbers do not necessarily always represent new firms and jobs created during the period as some existing businesses might have regularised their operations.
Early this year, it emerged that 90 percent of retailers had no bank accounts, raising suspicion that they may also not have filed employer registrations with NSSA.
Zimbabwe has a compulsory national social security pension scheme for employees, which is administered by the authority to provide security for pensioners. As such, new businesses and jobs are required to be registered with NSSA.
Since the country adopted a multi-currency regime made up of South Africa’s rand, United States dollar, British pound and Botswana pula in January 2009, the move attracted retail businesses to Zimbabwe, as this is seen as a good source of stable currency.
The collapse of the manufacturing sector has also accelerated the growth of the retail business.
In the absence of a competitive manufacturing industry, which should be producing for the local market, retail business has become highly viable as evidenced by growing number of foreigners, particularly Chinese and Nigerians, who dominate the sector.
Most retailers are into clothing, mobile accessories, household electrical goods, food, auto spares and hair products. The informal sector is also dominated by traders.
The statistics show that 1 724 new companies in retail, wholesale and commodity broking were registered last year while 621 were registered in the six months to June this year.
Economists say while jobs created in the retail sector were welcome in the sense that this sustains livelihoods, it also signals that the country is not getting adequate investments into productive sectors such as mining, agriculture and manufacturing.
Analysts said investments without improvements in macro-economic fundamentals such as liquidity situation in the economy should be treated as a “further hole in our economy as this would accelerate the wiping off of the scarce foreign currency.”
Thirty new businesses were registered in mining and refinery industry, creating 278 jobs in the past 18 months.
Agriculture, farming and milling had 7 500 new registered jobs with 360 new employers during the same period while the education sector had 1 853 new registered jobs.
However, new company registrations and jobs have slowed since the beginning of the year, particularly in the retail, signalling tight liquidity, which is eroding consumer spending.
In the six months to June, the retail, wholesale and stockbroking registered 3 000 new jobs. Eight-four new jobs were registered in foundry, steel and welding. The sector registered 2 000 new jobs last year.
Banking, finance and insurance registered 752 new jobs in the first half. Over 2 000 new jobs were registered in the full year to 2013.
Agriculture, farming and milling had 2 321 new jobs registered and there is potential for more registrations in view of the forthcoming 2014/ 15 agricultural season.
With Micro Small and Medium Enterprises becoming the new order of business, there was need for Government to put in place measures to account for their contribution.
More importantly, the MSMEs require Government support to operate at full capacity and grow.
Speaking at the commemorations of the Heroes day last week President Mugabe said Government is committed to further develop this sector, which makes a huge contribution to the country’s economy through employment creation and income generation.
“The Micro Small and Medium Enterprises Policy and the Small and Medium Enterprises Act are intended to create a conducive and enabling operating environment for sustainable development and growth of the MSMEs sector,” he said.
The Ministry of Small and Medium Enterprises and Co-operative Development is working on initiatives to strengthen the SME sector’s participation in the economy.
The Government through the ministry of SMEs is working with small businesses especially the marginalised sectors of the society to try and strengthen the sector’s participation towards economic growth and development in Zimbabwe.
The Zimbabwe Revenue Authority is in the process of developing initiatives for MSMEs, which will help them formalise their businesses.
Zimra commissioner general Mr Gershem Pasi said that MSMEs should be registered for ease of assisting them and to make it possible for the tax collector to raise taxes.