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ZIMBABWE: New laws hamper re-establishment of informal businesses
September 08, 2005

HARARE - Informal traders affected by Zimbabwe's recent urban cleanup campaign have welcomed government efforts to restore their livelihoods, but say greater effort is needed if the country's lucrative informal sector is to recover.

A demolition drive, which began in May, uprooted thousands of informal traders in the country's urban centres. Months later many are returning to the cities but complain that strict new regulations governing how they do business is hampering their ability to make a living.

"While we applaud the government for giving us another chance, there is something wrong with the way in which authorities are handling the issue of re-establishing flea [informal] markets," said James Taruziva, a trader at Mupedzanhamo market in the capital, Harare.

Taruziva considered himself lucky after his application to trade at Mupedzanhamo was successful. However, his optimism soon turned into disillusionment when he saw the new by-laws.

"When we came back, the municipality told us that we should not use tables or racks, insisting that we should sell our goods on the floor. Customers tend to shy away from the clothes that I sell because they easily become dirty, and at the end of the day I don't get much money," he said.

Before the cleanup operation, Taruziva could take home as much as Z$500,000 (US $20) a day; now the maximum he hopes to make is around Z$150,000 (US $6). He is also expected to pay a monthly tax of Z$700,000 (US $28) to the local government.

Harare's municipal council recently established 42 flea markets at shopping centres outside the city centre, saying the move was meant to decongest the central business district.

Under the revised by-laws, informal markets in low- as well as high-density areas only operate during weekends, unlike in the past when they opened daily.

Israel Mabhoo, a spokesman for the Alternative Business Association (ABA), an organisation promoting microfinance enterprises, has accused the government of poor planning.

"It just goes to show that the government is not committed to empowering informal traders. Flea markets should not be limited to weekends - it will definitely be difficult for people to generate enough income only during weekends," Mabhoo told IRIN.

He pointed out that several informal markets in the city centre, where business could be conducted without causing congestion, remained closed.

"What is important is to revisit the municipal by-laws and find ways of accommodating flea market operators, rather than seeing them as potential criminals," said Mabhoo.

Zenzo Ncube, 29, who sells electrical goods and beauty products at Malbereign Shopping Centre, about 5 km northwest of Harare, complained that the market was out of the way.

"Business is quiet, and I expect it to be so in the future, because potential clients cannot afford the money to make two trips to do their shopping here," he said.

"At the end of the day, I may be forced to close shop because operating in an area which people cannot easily access, and where I operate only on weekends, is not viable - but where will I get the money for my child's school fees, rent and food if I stop?" Ncube asked.

It is generally agreed that the parallel market used to generate 35 percent of GDP, but in recent years, as a result of a drawn-out economic crisis, the real figure could have risen as high as 60 percent - almost double.

Innocent Makwiramiti, chief executive officer of the Zimbabwe National Chamber of Commerce, expressed concern that reconstruction of the informal sector was taking too long.

"There was a lot of hurry when informal trading points were destroyed and while we welcome the decision to re-establish the sector, there is hardly any progress to talk about.

"Tens of thousands of people who were in the trade were affected by the cleanup operation but, to date, beneficiaries would hardly number more than 2,000. Besides poor planning, the government lacks the necessary resources to rebuild what it has destroyed, while there seems to be lack of coordination between relevant line ministries, such as local government, finance and small-to-medium enterprises," Makwiramiti told IRIN.

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