‘Informal and formal sectors intricately linked’

By Wellington Zimbowa
UNDER the current Phase 2 lockdown regulations, the formal sector was given the green light to open, while the highly concentrated informal sector remained closed with government but repercussions on the formal sector have been noted.
Some observers say the reported low business performance environment points to the intricate link between the symbiotic link between the formal and informal sectors.
Leading economist and immediate past president of the Zimbabwe Economics Society Lovemore Kadenge noted how the two sectors are intertwined.
“In Zimbabwe it seems they are a bit intertwined, because some of the needs which the formal sector want comes from the informal sectors as suppliers. The unemployed who work from hand to mouth in the informal sector help the formal through buying the products that are produced in the formal sector.
So if we’re to look at now why the demand is low for goods and services being produced in the formal sector. It’s because the people who’re supposed to consume the products are not working in their daily informal occupations,” said the economist.
The Zimbabwe Congress of Trade Unions (ZCTU) has also been arguing that some of the workers who are its members have been relying on vending among other informal initiatives to supplement their incomes.
“My job salary is not enough to sustain my family, from paying rentals which is US$25 that my landlord charged for the two rooms I am using. l also have to travel to and from work and transport fares keep rising and yet I currently earn an equivalence of US$18.
“ To sustain my family we agreed to run a vending enterprise and I therefore took a small loan to stock up the products with my wife running the market.
“This lockdown has put our livelihoods on hard times since as my wife cannot carry on with her vending and my salary is not even enough to sustain food for two weeks let alone pay rent,” said one employee who preferred anonymity.
A though economist Kadenge said the demand for food products is high, a survey by The BusinessConnect around retail shops in the C.B.D revealed that business is down for most retailers.
Agro business expert Mr. Charles Dehwa is on record arguing that there is a symbiotic relationship between the informal sector and the country’s core production sectors such as agriculture.
He notes that the disruption of vending at green markets such as Harare’s Mbare Musika has led to huge losses by farmers due to increased perishables on their products due to unavailability of customers.

Related posts

Leave a Comment