Informal sector keeps Zimbabwe running

Smuggling is survival tactic when unemployment is estimated at 90%

DAILY at 3am, Admore Muleya is on the road to the border town of Beitbridge, 320km south of Bulawayo, Zimbabwe’s second-largest city.

Muleya is a cross-border transporter referred to as malayitsha. The term comes from the nature of the trade, which is usually associated with vehicles heavily laden with goods and overloaded with passengers.

It is a risky trade. Accidents are common and illegal goods are often transported. Earlier this year, several transporters were arrested for bringing live ammunition into the country.

Muleya, however, shrugs off the risks. It is his only source of income. He has to fend for his wife, who is unemployed, and look after his sickly mother, who lives in Beitbridge.

Unemployment in Zimbabwe is independently estimated at 90% of the population. The Zimbabwe National Statistics Agency, however, puts the figure at 11.3%.

Stern Zvorwadza, chairman of the National Vendors’ Union of Zimbabwe, says there are 5.7 million informal workers in the country. “They circulate in excess of $7-billion [about R101-billion] annually, which is twice the revenue of the Zimbabwe government.”

Things are hard for Muleya right now. He blames it on the reopening of schools this week and parents having to cough up school fees.

“Business is low. It will pick up around mid-October to November,” he said. He is hopeful that plans to open a Game store in Musina in March next year will result in a roaring trade.

The bulk of Muleya’s clients are flea market operators, who travel to Musina to buy goods for resale back home. For a return trip to Musina from Bulawayo, Muleya charges $26.

“My vehicle carries 14 people, but sometimes I take 15 to 16 people because no one wants to remain behind,” he said with a sheepish grin.

The ban on imports of basic goods introduced by Zimbabwe in July does not bother Muleya. Smuggling has become rampant. “Everything can come in through the border. Money talks. People use soldiers and police officers to talk to the immigration officers.”

Big items such as beds and building materials are ferried across the Limpopo River on small boats.

Banned products such as soap and even chicken pieces are taken into the country easily, even under the watch of immigration officials.

“It’s not the job of South African soldiers to monitor goods,” Muleya said when asked if the South African authorities stop goods.

The Beitbridge border post earns an average of $2-million daily in revenue for the Zimbabwe government. The authorities say this could be much higher were it not for the smuggling.

In his midterm fiscal policy review statement to parliament on Thursday, Finance Minister Patrick Chinamasa proposed measures to deal with the rampant smuggling at Beitbridge, which is bleeding the fiscus.

“Government will seek to boost its revenue sources and this will include the implementation of automation of the Beitbridge border post, decongestion of the border and installation of CCTV.”

Riots erupted on both sides of the border post in July when the import restrictions were enforced, and the border was closed for the first time since it was opened in 1929.

Muleya is unmoved by the new measures and said people would “always find a way” around them.

This has been the major difference between the informal and formal sectors — the former seemingly circumvents all restrictions while the latter bleeds from the tighter controls.

Formal workers such as Nigel Mugamu in Harare do not have it easy. Mugamu returned to Zimbabwe from the UK in 2010, hopeful his skills would help change the country. He founded a social media company, @263Chat. Six years later the going is tough. “We are living from hand to mouth, literally, and yet we have clients who owe us money,” he said. Salary and rental arrears top the list of challenges. Those unable to keep up with the “Russian roulette” of business have closed shop.

Official data shows that more than 6 000 companies threw in the towel between 2011 and March this year. An estimated 75 000 workers have lost their jobs in the economic bloodbath.

“Getting paid is proving to be our biggest hurdle. Smaller companies make a plan, but larger organisations are not playing ball,” Mugamu said.

Landlords are in a fix. They have to keep tenants who make partial payments or risk their property lying empty. According to Bard Real Estate’s rental report for 2015, 50% to 60% of offices in central Harare are unlet.

For now, Mugamu said his landlord “understands” his challenge in paying the rent. If nothing revived the economy, he said, catastrophe was certain.

The latest figures from Chinamasa show the government spent 96.8% of revenue between January and June paying the salaries of public servants. The uniformed forces — the army, intelligence and police — get paid first, followed by teachers and health workers. Pensioners come last.

Opposition political parties are preparing this week to take to the streets in more demonstrations aimed at piling pressure on President Robert Mugabe to step down.

Mugabe has vowed to crush the protests, which he accuses Western countries of sponsoring.

Zimbabwe is on a knife edge.