ZIMBABWE CHAMBER OF INFORMAL ECONOMY ASSOCIATIONS - INFORMAL ECONOMY POLICY POSITIONS LAUNCHED 8 DECEMBER 2017
Informal economy in Zimbabwe evolved and has been in existance since the colonisation period. This economy was small and not recognised as a performing sector that contributes to the national GDP. It continued to grow as the unemployed mostly youths and women had to find means of surviving and alleviating poverty. At attainment of independence in 1980 the Informal Economy accounted for less than 10% of the labour force. It immensely grew from the period when the Government adopted and implemented the neo-liberal economic system of the Economic Structural Adjustment Programme (ESAP) from 1991. In more than two decades that followed, the rate of expansion of the informal economy has continued grow to reach 94.5% in 2014 as indicated in the Labour Force Survey of 2014. This has been exacerbated by the effects of the countries’ economic down turn that resulted from:
• Company closures and massive retrenchments that occurred without considering cushioning the retrenches nor rehabilitating them for future and alternative production and employment.
• Lack of stable and sustainable investment in the productive sectors.
• Absence of sustainable employment creation to absorb the retrenches as well as annual school and colleges graduands.
• Lack of development of key production sectors such as agriculture, mining, manufacturing and financial.
• Influx of imported finished goods.
• Lack of recognition of informal economy, its contribution to the national GDP and a conducive business operation environment.
• Non-payment of wages and salaries for those still in formal employment.
• The economic development policies and programmes have maintained a bias in favour of the formal economy which has been shrinking.
All the affected workers had very limited options for employment opportunities thus had to settle for informal activities that were and are still not recognised or regulated. Some settled for employment in home industries while others who possessed skills struggled to start own small businesses. This means that the majority of people are locked in the informal economy where activities have remained of survival nature. This is evidenced by the World Bank report of 1995 that revealed the number of house-holds in poverty to have increased from 40.4% in 1990/91 to 63.3% in 1995/96. The same World Bank report prescribes that “unless the economic programme is seen to generate benefits for everybody in Zimbabwe, it might not be possible to follow through with maintaining the momentum of many of recent changes. This will require more effectively dealing with poverty and the social dimensions of adjustment.”
Zimbabwe has a dual and enclave economic structure which is characterised by the existence of a shrunken formal economy that accounts for about 4.5% of the total labour force (2014 Labour Force Survey) while the informal economy accounts for the majority of the labour force (94.5%). This economy has remained dual in the sense that both formal and informal economy are coexisting although economic performance recognition is only given to the formal economy. It is also enclave because a large segment of the labour force is engaged in low productivity activities which imply that effective demand is low and there is limited expansion of the market and sustainable growth of the economy. This deficiency renders the formal economy to rely on external market and demand which reinforces (Labour Force and Child Labour Survey 2014) dependency. It is also evident that informal economy jobs are low income jobs without prescribed wages. The conditions of work are very poor with long and unregulated long working hours, unsafe working environment and underemployment.
Structure of the economy of Zimbabwe by 2011
Source: LEDRIZ 2011
Contributions of the Informal Economy to the National Economic Development
The informal economy contribution to national development is quite significant ranging to 19.5% of the Gross Domestic Product (GDP) (Poverty Income Consumption and Expenditure Survey of 2011/12). Its contribution to national treasury is through payment of presumptive tax; value added tax; customs duties; excise duty and municipal tariffs.
The informal economy contributes to backward and forward linkages as it buys from and supply to the formal economy businesses such as the Glen View Home Industry which is popular for furniture manufacturing and supply to established retail outlets. On the other hand they buy the raw material from the timber and cloths retailers or factories.
The facts given above prove beyond reasonable doubt that the informal economy is now the biggest economy and has the largest employment employing more than 5.3 million of the total labour force of 7.1 million (LFCLS, 2014). As dual economy exists, the informal economy presently provides the livelihood to vast Zimbabweans but there are decent work deficits.
Challenges in the Informal Economy
The informal economy is faced by a multitude of challenges with major one being lack of recognition and support towards viable transformation of the informal economy to formal economy.
The informal economy is faced by a multitude of challenges with major one being lack of recognition and support towards viable transformation of the informal economy to formal economy. This has caused the challenges of:
Absence of a clear definition of ‘Informal Economy’: There is no clear definition of Informal Economy developed for Zimbabwe except the ILO definition which has not been domesticated. The Government uses the term “Small and Medium Scale Enterprises” which is not inclusive of some tiny informal economy activities such as street trading.
Low income. The majority of workers employed in the informal economy earn less than Food Poverty Line (FPL) of 2014 (Labour Force Survey 2014)
Lack of access to credit: Informal economy workers cannot borrow huge sums of money from banks due to lack of collateral and high interest rates.
Legal: National Laws and Local Authorities by-laws do not cater for the current needs of the informal economy. Most legislations and policies do not promote the informal economy but are biased towards supporting formal economy.
Inadequate and unsuitable infrastructure: There is failure to provide basic public utilities required by the informal economy such as water and sanitation, working space, electricity, customer accessible market places, facilities for workers with children.
Unfavourable macroeconomic environment: High cost of doing business that affects viability and productivity of informal economy enterprises which include local authorities’ tariffs, high interest rates charged by financial institutions, transport costs, corruption, high taxation, and inhibitive procedures to obtain licences and absence of policies and mechanisms to support the informal economy.
Business Concentration Bias: The Government has continued encouraging business development in big cities through economic development concentration than smaller towns and growth points. A case in point is the famously known Gokwe Centre in Gokwe Rural District in the late 1980s to early 1990s when a business centre through concentration and support of agriculture in cotton was developed and employment opportunities were opened.
Economic bias: The Government has not adapted and embraced the availing opportunities from the informal economy to grow the economy. The Government experiences cash shortage and moan for liquidity sustainability. For example, the state suppresses the informal money changers who deal with huge sums of local and foreign currency that could be taped through legalising these activities into small “bureau de change”.
Decent work deficits: The informal economy is characterised by decent work deficits that include: poor quality, unremunerated, unrecognised, unregulated and unproductive jobs, that are characterised by absence of respect of workers’ rights, social protection provisions, representation and weak voice among vulnerable groups such as women and young workers. This environment has resulted in existance of the following insecurities:
o Labour market insecurity
o Employment insecurity
o Job insecurity
o Work insecurity
o Skills reproduction insecurity
o Income insecurity and
o Representation insecurity
Harassment and Criminalisation. There is high prevalence of harassment of informal economy workers by law enforcement agents and municipalities which take various forms.
Political Dynamics. Political parties are taking advantage of the informal economy as they compete to influence this economy but without much support of its development.
Public perception towards informal economy: Due to lack of recognition, most members of the public perceive informal economy as a nuisance. Some established businesses perceive it as distractor of lucrative enterprising.
The Government has mixed reactions between the Ministry of Small and Medium Enterprises and Cooperatives attempts to promote the sector while the Ministries of Local Government and Home Affairs restrict the operations of the sector through harassment, confiscation of goods and arrests.
Lack of Government Support: The Ministry of Finance mentions the “New Economic Order” in his 2018 national but how does this new order include the informal economy and what clear programmes and budgetary allocation are there targeting development of this massive economy?
Lack of protection from neo-liberal economic policies and marginalisation. The neo-liberal global policies prioritise exclusive control of the means of production by Multinational Corporations and big businesses disregarding the social development of the people. The trend is that Governments are expected to attract Foreign Direct Investments instead of supporting transformation of informal economy to become formal business ventures. Ref: East Asian countries
Corruption: This is now a grown syndrome in the ailing economy of Zimbabwe. The informal economy is perceived to be a hub of criminals who operate unscrupulous businesses (without business ethics and standards). “No recognition – no order”
Exclusion: Informal economy is excluded from all socio-economic developmental policies and programmes. The sector has remained marginalised and unrecognised for development yet it is “THE” economy.
Vulnerability: Women and young workers are mostly vulnerable to serious decent work deficits in the informal economy as employment opportunities continue depleting.
Zimbabwe is not facing a unique situation but a global challenge of informalisation which needs specific actions that require collective efforts.
THE POLICY POSITION AREAS OF FORCUS ARE
AREA ISSUE NEED
INFORMAL WORKERS’ RIGHTS Socio-economic Rights:.
Access to the nine Socio-economic Rights by Informal Economy Workers
FORMALISATION Transforming the informal Economy to Formal Economy
Implementation of the International Labour Organisation Recommendation 204 of 2015.
LEGAL Informal Economy Legislation and by-laws
Formulation and Improvement of the laws that govern the informal economy in Zimbabwe.
DECENT WORK AGENDA The Four Pillars of the Decent Work Agenda
Implementation of the Decent Work Agenda in the Informal Economy
1. INFORMAL WORKERS’ RIGHTS
POLICY ISSUE: Socio-Economic Rights
NEED: Access to the nine Socio-economic Rights by Informal Economy Workers
WHO IS INVOLVED: Government, Local Authorities, Business and Informal Workers (Labour)
Socio-economic rights are basic human rights required for everyone to meet the basic necessities which guarantee every person to live a full human life. There are three conditions for workers to attain these rights which are:
1. Respect: Government and other authorities must not interfere directly or indirectly with enjoyment of these rights;
2. Protect: Government must prevent third parties from interfering in any way; and
3. Fulfil: Government must adopt necessary measures to achieve full realisation of these rights.
1. Right to decent work
There are no formal employment opportunities, people are engaging in precarious jobs and there are no opportunities to freely choose employment of their choice. The informal economy continues to be harassed on a daily basis by police and local authorities and these actions undermine human dignity and basic freedoms. They are denied space for their businesses. This has resulted in the continued impoverishment of the working people in Zimbabwe. There are no opportunities to positively transform their businesses and livelihoods.
Therefore there is need for developing strategies for formalisation which should include pro-poor and inclusive developmental approaches such as the bottom-up approach that aim at sustainable human rights centred development. Like in the formal sector, labour standards must be formulated for the informal economy which respect human and workers’ rights as well as the four pillars of Decent Work Agenda.
2. Right to public utilities
These are basic social services and necessities of life which every person must enjoy and they include: clean water and sanitation; affordable and reliable communication, transport, adequate electricity, infrastructure and social amenities.
The situation in Zimbabwe tantamount to complete denial of the enjoyment of the right to public utilities. This has negatively affected economic development, undermined human and social welfare of informal economy workers who rely mainly on these services as they cannot afford to buy own services. The continued power outages and erratic water supplies are a threat to the livelihoods of the informal economy workers as their production processes are mainly done in the homes where the interruptions are experienced on a frequent basis
Therefore a review of town planning and utilities provision with involvement of the stakeholders is necessary. Provision of adequate infrastructure and services should be a priority for both national and local Government. These are not a luxury but necessities for citizens’ development. Restoration of recreational facilities such as basketball, volley ball, tennis ball, gymnastics and other sports facilities will assist in grooming young talents as well as occupy youths in sports activities.
3. Right to Social Protection
According to the ILO, social protection refers to the provision of benefits to households through public or collective arrangements to protect against low or declining standards of living.
Exclusion of the informal economy from these schemes makes these workers vulnerable. Furthermore the predominance of women in the informal economy makes them more vulnerable as they are overburdened due to the triple role the play of productive, reproductive and family social and welfare responsibilities.
Therefore reintroduction of subsidies for the basic essential services and goods will assist in recovery of the economy as health workers are efficient producers. Strategies for formalising and protection of the informal economy to grow indigenous investments should be included and considered in the national economic and fiscal policies.
4. Right to Housing
This is much more than simply a roof over one’s head. Housing needs to be a habitable space that fulfils the basic needs of humans to personal space, security and protection from the weather. The right to housing means people must have equal access to safe, habitable, and affordable homes. It also means people must be protected against forced evictions as provided in the National Constitution.
The Government has been discriminating by taking an initiative to provide houses for civil servants neglecting provision of the same to all citizens. As a result, there is now an unfortunate situation of mushrooming of illegal settlements, bogus cooperatives, property agents and land barons as well as corruption in the housing sector. This has also resulted in environmental degradation, pollution and emergence of water- borne diseases. Most informal economy workers cannot afford or access this essential right and therefore are prone to displacement, harassment and manipulation.
Therefore the Government should restore budget allocation towards housing for low income earners. The Government must be involved in all strategies and programmes of housing the people. Revert back to the 1980s schemes that were best planned to house all citizens. Pension funds have been active in supporting the business sector by constructing sky scrapers of commercial business. Priority be on investments in housing for the low income. The Government should also prioritise and promote housing construction through the councils who are wasting resources confiscating informal economy goods that are meant to raise funds to pay for accommodation and construct houses.
5. Right to health
Health is an important component of an adequate standard of living. The right to health includes access to adequate health care (medical, preventative and mental), nutrition, sanitation, and clean water and air. It also includes occupational health. Enjoyment of the right to health is vital to all aspects of a person’s life and well-being. The right to health is critical to the realization of many other fundamental human rights and freedoms e.g. housing, education, decent work as well as production.
Those in the informal economy are excluded from enjoyment of the right to health as they do not have access to medical aid insurance and have to pay the exorbitant fees for any health care requirement. The inaccessibility and unavailability of health services has placed a heavy burden on women and girls as they have to take care of the sick. Although HIV/AIDS prevalence rate has declined, it remains relatively high due to lack of health facilities and care.
As a result, there has been re-emergence of previously tamed diseases such as malaria and tuberculosis, high death rates, increased infant and maternal mortality. There has been a general decrease in health standards as evidenced by falling life expectancy from as high as 66 years in 1997 to 57.2 years in 2014.
Therefore public health insurance for all is a necessity to be urgently introduced.
6. Right to a healthy environment and climate justice
The right to a healthy environment requires a healthy human habitat, clean water, air and soil.
There has been a violation of this right as evidenced by emergence and increase in unfamiliar diseases, deteriorating health standards, greenhouse gases which cause climate change, food insecurity, loss of bio-diversity, water-borne diseases (cholera and typhoid) and air borne diseases (tuberculosis). There is tendency of blaming each other when health disaster occurs such as Government and Local Authorities always blame the informal economy. Informal economy workers are always victims of authority negligence.
Therefore there is need of monitoring of the informal production in order to protect the environment and ensure that the production processes are not harmful to the citizens as well as that they do not contribute to the re-emergence and increase in unfamiliar diseases. Protection of the environment is necessary for the country’s present and future generations.
7. Right to education
The right to education is two-fold:
i. it requires free and compulsory primary level education and
ii. equal access to every level of education
Primary education which should be free, compulsory and available for all is now a privilege for the rich. Cost recovery has become the main focus. Thus education has been commodified with cost of education (schools fees, levies, examination fees, introduction of examination fees for primary schools) now beyond the reach of the low income and ordinary person. Poor remuneration of teachers and lecturers has resulted in brain drain thereby affecting the quality and teacher-to-student ratio thereby undermining education standards and productivity.
High school drop outs and mismatch of supply and economic demand have worsened the rates of unemployment, child labour, crime rate and early marriages. Low levels of education and skills negatively affect competitiveness and quality of production.
Therefore education with production that equips students with diverse practical production skills in addition to the academic knowledge should be reintroduced as recommended in the Nziramasanga Commission Report of 1999. Reintroduce free primary education to cater for every child.
8. Right to food and food security
The right to food and food security guarantees all people the ability to feed themselves. It also obliges states to cooperate in the equitable distribution of food supplies. People have a right to the basic amount of food necessary for survival, and to food of high enough quality and quantity to live in adequate dignity.
Denial of the right to food and food security has resulted in the reduction in the number of meals per day thereby threatening human health. People have been forced to sell their assets in order to source food. In other circumstances child labour has increased especially in both rural and urban areas and children are forced to leave school and look for income to buy food. In terms of gender, there has been an increase in risky commercial sex work by women and girls so as to raise income for food for families.
The challenges of persistent poverty, with 63 per cent of the population living under the total consumption poverty line, 16 per cent being extremely poor, and significant levels of unemployment and underemployment (particularly in the informal economy), continue to weigh down on sustainable economic development.
Recognition of small or informal economy farmers and their involvement and support in growing them out of subsistence farming will enhance food security and the country’s aim of feeding the nation as well as being the bread basket of Southern Africa. Promotion of small grain and cereal crop farming such as rapoko and millet will add value to food security and nutrition.
9. Right to a decent standard of living
The right to a decent standard of living encompasses all basic rights. The Government is consistently expected to improve these rights.
In the current context, Zimbabwean citizens have been failing to enjoy all socio-economic rights and this has consequently reduced their general standard of living. Access to a decent income, decent housing, clothing and food has been largely denied, with the majority of the Zimbabwean population (85%) living in poverty and 58% living in extreme poverty (ZIMSTAT, 2015).
The Government should recognise and prioritise formalisation of the informal economy. As the formal economy is regulated, the informal economy too should have standard law that regulate its operations as it now the dominant economy of the country. Adequate facilities for informal economy operations should be developed and supported by a clear inclusive development policy.
2. TRANSFORMING THE INFORMAL TO FORMAL ECONOMY
POLICY ISSUE: Implementation of the International Labour Organisation Recommendation 204 of 2015
NEED: Recognition of the Informal Economy as a national economic development sector
WHO IS INVOLVED: Government, Local Authorities, Business and Informal Economy Workers (Labour)
Zimbabwe is currently faced by a shrunken and non-growing formal economy. There is a large percentage of workers in the informal economy constituting to about 94.5% whereas in the formal economy they constitute 4.5% (according to the 2014 Labour force survey). The introduction of neo liberal policies such as ESAP and the development of unfriendly economic policies has caused the continuous trend of closure of industries, lack of investments, underutilisation of resources such as land, unabated corruption social service delivery systems such as the dilapidation of infrastructure, lack of access to medical care, free education and health has also contributed to the non-development of the state. However, the ILO has recognised the informal economy as a performing economy although it has been experiencing the following challenges:
The informal economy workers continue to be harassed on a daily basis by the police and local authorities and this undermines human dignity and basic freedoms of workers. These harassments resulted in the abuse of the rights of informal workers as well as continued impoverishment of the working people in Zimbabwe.
LOSS OF BUSINESSES
The Operation Murambatsvina of 2005 had a landmark effect which greatly affected the informal economy by destroying the informal businesses. The government justified it as a measure to re-organise micro, small and medium enterprises, stop economic crimes, minimise the threat of major disease outbreaks and a crackdown against illegal housing and commercial activities. However, the Operation Murambatsvina proved otherwise as it resulted in many job losses, livelihoods and businesses for the informal workers thereby worsening the country’s poverty situation.
VIOLATION OF HUMAN and WORKERS’ RIGHTS
The violation of the right to basic utilities has tended to undermine human and social welfare. The continued countrywide power shortages and erratic water supplies are a threat to the livelihoods of the informal economy workers particularly in urban areas where production processes are mainly done in the houses.
The existing social security under NSSA only caters for formal economy workers excluding informal economy from formal social security arrangements such as pension scheme.
The ILO Recommendation 204 of 2015 provides that the government should offer effective occupational safety and health policies, income security, and establishment of social protection flows and extension of social security coverage. In addition it also encourages the effective promotion and protection of the human rights of all those operating in the informal economy.
The informal economy is experiencing income insecurity because of lack of guaranteed and reliable income due to restrictive monetary policies and low production. Representation insecurity as there is no social dialogue structures where the informal economy workers can exercise their right to bargain.
Informal workers have no secured access to capital as the banks and financial institutions apply stringent measures to access loans.
The ILO Recommendation 204 of 2015 urges the government to facilitate and improve access to financial services such as credit to informal economy.
High taxation which includes taxes from ZIMRA such as the value added tax, presumptive tax, income tax, withholding tax as well as the excise duties negatively affects the informal economy businesses, because most of them are unable to pay.
ILO Recommendation 204 of 2015 urges that the government should introduce incentives, compliance and enforcements strategies such as reduce tax costs by introducing simplified tax and contributions assessment and payment regime.
LACK OF SOCIAL SERVICE DELIVERY
The lack of social service delivery such as garbage collection has affected the operations of the informal economy. Waste and garbage are not collected hence influencing and forcing people to dump rubbish anywhere thus becoming a health hazard to the people. However blame has always been placed on the informal workers than the service delivery institution.
The dilapidating infrastructure like burst sewage and water pipes, unprotected working space and inadequate delivery of health and reliable and affordable transport services has undermined the occupational health and safety of the people (informal traders and customers)
The government has shifted the obligation to provide decent and affordable housing to co-operatives, property developers and private agents over the years. Public transport has been privatised.
NON-PERFORMING ECONOMIC POLICIES – ZIMBABWE A SUSTAINABLE SOCIO ECONOMIC TRANSFORMATION (ZIMASSET)
The purpose of the economic policies is to grow the economy. The ZimAsset can be understood from its meaning; the need to attain sustainable socio-economic transformation in the four clusters which are: Food Security and Nutrition, Value addition and Beneficiation, Infrastructure and Utilities as well as Social Services and Poverty Reduction. The policy promised among other things empowerment of the youths, rehabilitation of roads, schools, provision of health services to all citizens, shelter and creation of employment. But companies have continued to close; there is still an increase in unemployment rate and an increase in poverty. This therefore shows that this policy failed to deliver to the citizens of Zimbabwe as these effects are still continuing.
The lack of coherence and consistency in policy formulation and implementation by different ministries has resulted in the lack of meaningful steps by the government to include the informal workers in policy frameworks formulation and implementation has led to none integrated policy frameworks towards informal economy transformation. Lack of an institutional structure or unit such as the ministerial department of informal economy has led to the exclusion of the informal workers.
The ILO has recognised that all these challenges emanate from non-implementation of the ILO Recommendation 204 of 2015 which is now creating barriers to the transformation of the informal economy as prescribed by the instrument.
In January 2014, the Minister of Finance Comrade Patrick Chinamasa in his budget speech hailed the informal economy as the engine of the country’s economic growth and praised the enterprising nature of informal economy workers. But this is opposed to what happens on the ground and what other government officials think as they regard the informal economy as a nuisance and not a co-contributor to the country’s economic growth.
WHAT TO BE DONE
Provision of social security:
Social insurance-which provides earned benefits for workers and their families by employment contributions under NSSA such as medical aid schemes and occupational pension schemes be extended to the informal economy.
Access to capital:
This facility should be considerate of the vulnerability of the sector such as access to loans with reduced interest rates to enable growth and security of businesses towards formalisation.
Access to trade markets:
It is essential for the informal economy to grow and promote their businesses through access to trade markets focusing on backward and forward business linkages. The government and responsible authorities should involve informal economy in planning and sourcing as well as conducting national, regional and international trade.
Provision of basic utilities
There should be provision of electricity, working space e.g. stalls and storage facilities, as well as water and sanitation to promote the work of the informal workers as these are decent work necessities for the informal workers.
Provision of safe, habitable and affordable housing
There is need to protect the informal workers from forced evictions such as what happened in 2005 with Operation Murambatsvina. The informal workers are in need of affordable housing and infrastructure to be able to operate their businesses and prevent incidents of loss of houses, products, livelihoods as well as avoid illegal settlements.
Recognition and respect of labour standards
Workers should operate in a free environment where there are no harassments by the police with respect of human and labour rights such as effective recognition of the right to collective bargaining. The fulfilment of decent work through respect of the fundamental principles and rights of social dialogue and tripartism at work in law and practise is essential.
The development of policies, instruments and frameworks which regulate the informal economy and domestication of ILO Recommendation 204 of 2015 are needed in order to facilitate formalisation.
Corruption is killing the country’s economic development and the national sovereignty. There is need for practical and corrective measures to be implemented to promote anti-corruption behaviour and good governance which will mirror as a strategy for total eradicated it.
Access to economic justice
Elimination of all forms of discrimination and harassment will assist in developing strong and deliberate way to formalise the informal economy through introduction of a simplified tax regime and incentives which will promote compliance and encourage people to pay taxes.
3. REGULATION OF INFORMAL ECONOMY OPERATIONS
POLICY ISSUE: Informal Economy Legislation and By-Laws
NEED: Harmonisation and Improvement of the laws that govern the Informal Economy in Zimbabwe
The colonial regime attempted to control the spread of the informal sector in urban areas. Town and Country Planning Act (1946), the Vagrancy Act (1960), the Urban Councils Act and the Vendors and Hawkers By-laws (1973) are some of the pieces of legislation that were enacted to control the growth of informal sector activities. However after independence, the situation has remained the same. Each municipality or ministry has been given mandate through Urban Councils Act and the Rural District Councils Act to formulate own by-laws and regulations for informal economy. Some of such by-laws are ambiguous and open to manipulation by local authority officials.
Criminalising informal economy workers remain the barrier to economy development that results in contradicting the national economic development strategy. The laws The laws (by-laws and regulations) that govern the informal economic production and trade are fragmented as each municipality or ministries may regulate as they find necessary without guiding standards which has resulted in conflicts between national economic policies and strategies and ground actions.
The ILO Recommendation 204 of 2015 acknowledges that people enter the informal economy not by choice but as a consequence of lack of employment opportunities in the formal economy and absence of other means of livelihood. It also outlines that decent work deficits, the denial of rights at work, the absence of sufficient opportunities for quality employment, inadequate social protection and absence of social dialogue are most pronounced in the informal economy.
Application and Enforcement of the regulations
Some laws that have been put in place do not promote the development and growth of the economy. Statutory Instrument 159 of 2014 is one of the regulations being used by Harare City Council. Example is that this law allows a person to lease larger space from the council on a specific charge while the lease holder is permitted to sublet the space. This provision has led to abuse by the so called space barons who are able to acquire a license for the whole street then charge huge amount of money to informal traders getting away with thousands of dollars while the government is losing a bigger percentage in unaccounted revenue.
These laws do not define the informal economy or informal economy worker. Thus pose confusion between formal economy businesses that deliberately enter the informal economy and putting their goods on the informal markets (cheating) genuine informal economy traders.
It is important that the informal economy be legally recognized and not criminalised.
It is critical to formally define the informal economy.
There is need for the formulation of law specifically for informal economy which will regulate employment relations and operations and there is need for consultation with all stakeholders and the process be inclusive.
By-laws should be reviewed where they exist and aligned to the national constitution
Application and enforcement of the law should be fair.
Zimbabwe should domesticate and implement ILO Recommendation 204 of 2015. Take urgent and appropriate measures to enable transition of informal economic units to formal economy as stipulated by ILO Recommendation while ensuring the preservation and improvement of existing livelihoods during transition.
There are vast employment opportunities in the informal economy and it is unfortunate that the Government has not regulated employment relationship in this sector.
4. DECENT WORK AGENDA: The Four Pillars of the Decent Work Agenda
1. Workers’ Rights
2. Employment Creation
3. Social Protection
4. Social Dialogue
NEED: Provision of the Four Pillars of Decent Work Agenda
Who is involved? Government, Local Authority, Business, Labour
The Informal Economy is defined by the ILO as “all economic activities by workers and economic units that are not covered or are insufficiently covered in law or practice and formal arrangements”.
Decent Work is defined by the ILO as productive work for women and men in conditions of freedom, equity, security and human dignity. It involves opportunities for work that is productive and delivers a fair income security in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their concerns. It also entitles workers to organise and participate in the decisions that affect their lives and equality of opportunity and treatment for all women and men.
This growth of the informal economy is characterised with decent work deficits. The nature and characteristics of the informal economy has not changed even when it has become the only option to absorb the unemployed labour force.
It is worth noting that the informal economy thrives in the context of high unemployment, underemployment, poverty, gender inequality and precarious work. In such circumstances, the informal economy also plays a significant role in income-generation due to the relative ease of entry and low requirements of education, skills, technology and capital. However, most people enter the informal economy by necessity rather than by choice, as a means of survival. The informal sector is largely characterized by the following qualities:
Easy entry, meaning anyone who wishes to join the sector can find some sort of work which will result in cash earnings;
No stable and regulated employer-employee relationship;
Depends on a small scale operations, and skills gained outside formal education.
The Government of Zimbabwe excludes the informal economy in acquiring decent work by harassing the informal economy traders and depriving them from having access to their basic freedoms and rights as well as not providing good legislation.
The government has not created conducive environment that generates adequate and decent employment opportunities for those who are able and seeking employment. There are no opportunities to freely choose employment as well as the employment both in the informal and formal economies are characterised by insecurities.
The informal economy businesses are not recognised and considered as employment creation ventures thus they remain outside the national policies and labour legislative frameworks. There is systematic denial of the rights specified in the ratified ILO fundamental Conventions No.87 and No.98.
It is therefore necessary to bring the informal workers and enterprises under the protection of the law as a major step moving towards achieving decent work agenda. The strategies may include:
simplifying the registration, licence procurement and implement progressive taxation for informal economy sector;
establish a national board similar to the National Wages and Salaries Board, (which sets wages for domestic and unclassified workers), in order to fix minimum wages for the informal economy;
Improve labour inspection and new approaches to formalisation.
WORKERS’ RIGHTS AT WORK
Fundamental rights at work are internationally recognised human rights and apply to all workers regardless of their employment relationship or the formality status. It is important to understand and highlight that there cannot be a lower level of rights for informal workers but the fundamental principle is that all those who work have rights which must be respected.
There is need to ensure that the voice of the workers in the informal economy is present at all national platforms. The required space should be provided and the voice of the informal economy workers should be part of the national dialogue and consultations in national policy development should be extended to the informal economy
Decent Work Agenda principles should be implemented in the informal economy. The ILO Core Conventions as well as all other International Labour Standards must be respected and applied in this sector too.
Social protection is an internationally recognised human right. The lack of social protection is a key characteristic of the informal economy with informal workers lacking access to formal mechanisms of social protection.
The national constitution provides for maternity protection but there are no mechanisms put in place to provide this right to workers in the informal economy. The exclusion of the informal economy from these schemes puts millions of workers in this massive economy into vulnerability and poverty.
The current system discriminates against the majority of the people such as self-employed, domestic workers, agricultural workers and those with a regular income from informal activities.
The Government should change the law to include all workers on the social security floors such as Maternity protection, workers injury compensation, NSSA pension and funeral insurance as well as any other public schemes to be introduced. Mechanisms for all workers contributions should be put in place.
Workers in the informal economy are excluded from or under-represented in social dialogue institutions and processes. The informal economy represents the largest concentration of the labour force that has no voice namely the silent majority of the national economy. Women and youths who are the bulk of informal workers have no voice either for pursuing employment interests or lobbying responsible authorities on issues such as access to infrastructure, property rights, environmental concerns and social security.
Establish formal social dialogue framework for the informal economy in order to develop and improve policy structures and achieve pro-poor and inclusive economic development.
ZCIEA is well placed and geared to ensure that Informal workers who are now the majority of the labour force attain workers liberation and enjoy their rights as enshrined in the international and national provisions. All informal workers in Zimbabwe should unite towards formalisation of the informal enterprises and enjoyment of their rights.
THE CHAMBER – THAT DELIVERS:
UNITED WE STAND – DIVIDED WE FALL
NOTHING FOR US – WITHOUT US
SHINGA MUSHANDI SHINGA – QINA SISEBENZI - QINA