‘We want to reinvent SMEs’

AS Zimbabwe enters week 10 under the coronavirus-induced national lockdown, the country’s informal sector is screaming. Economic activity has been muted.

In its 2019 Labour Force and Child Labour Survey, the Zimbabwe National Statistics Agency (ZimStat) puts the number of people in the informal sector at almost one million.

The sector undoubtedly contributes significantly to the country’s Gross Domestic Product. However, with the lockdown set to continue indefinitely, the informal sector is gasping for survival.

Cries from the sector for Government to allow them back at work are getting louder. There are concerns as most people in the sector live from hand to mouth.

The Sunday Mail Gender and Community Editor Fatima Bulla (FB) spoke to the Minister of Women Affairs, Community, Small and Medium Enterprises Development Sithembiso Nyoni (SN) on the future of the informal sector. Below are excerpts from the interview.

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FB: Has your ministry assessed the impact of the lockdown on the informal sector?

SN:

Yes, we did a snapshot survey in which we found that about 57 percent of SMEs (Small to Medium Enterprises) will not be able to go back in business. A lot of them may not be able to pay salaries, income has been eroded and so is capital. Some of them will never go back to the businesses they used to do.

FB: In light of this, what are you doing to rectify the problem?

SN:

The ministry is concerned. We are doing everything possible to stand by the SMEs. We have prepared a Cabinet paper — our proposals for the way forward.

As soon as Cabinet approves, we will roll out the programme.

We were given $500 million and we divided that into three tiers.

The first tier is for what we call the green field. We know that some of the SMEs may start from scratch or may have to change their line of enterprise.

These are what we call green field and they will be eligible to be funded through small and concessional loans.

The second tier is for those within the formal sector, for example, there could be those doing tailoring, these will be supported at level two.

The third tier is for registered SMEs. There is funding to support them and the President said the money needs to be used.

FB: Are there any specific groups, for instance, women that are being considered for funding?

SN:

We want to respond to women, war veterans and young people. So we met with groups of youths, women and war veterans to come up with their programmes. My appeal is that they should contact our offices.

We are opening our district and provincial offices to respond to their needs. If anyone encounters problems, they must not sit back.

After Cabinet has approved our strategy, we don’t want the informal sector to go back to the squalor, to go back to shacks where they had been operating from.

We are working with the private sector and the Ministries of Local Government and Public Works; National Housing and Social Amenities; Finance and Economic Development; and the SMEs themselves, to put up decent work spaces.

Local authorities have designated spaces. At the moment, if you can work from home, do that and register with your associations so that as we build, the small business operators can be allocated space.

For example, we have discussed having a double-storey building at Mupedzanhamo Flea Market rather than to have people crowded.

We can have clearly demarcated spaces either for selling clothes or food and so forth. In addition, we want proper ablution blocks because we don’t want a thousand people to be sharing a single toilet.

FB: So what is the way forward? SN:

Government has availed funding, so let everybody register and get space the proper way. I don’t want, three or five years later, for Local Government to destroy illegally erected structures again. It’s denigrating.

Why should we allow people to invest in something unsustainable?

However, I must say I am proud of Zimbabweans and to be a Zimbabwean because we don’t want to depend on others.

We have many informal traders who want to earn their honest dollar. This is why the President (Emmerson Mnangagwa) launched two programmes — the first of which is a cushioning fund.

I want to encourage the informal sector to register with my ministry so we can pass their information to social welfare who are managing the cushioning funds.

This is because once we open we want them to go back to business.

We want them to break the Covid-19 impact, so the support system is there. Let us register as we are mandated to assist.

In Bulawayo, the local authority clearly noted that they only want people who are e registered d because only those se licensed will be given ven space.

So t the he informal sector should ld be serious, let us not trade or work illegally.

FB: Is this a call for the informal sector to formalise?

SN: Formalisation can’t be done by the ministry. These are businesspeople, we can’t formalise those who can’t formalise themselves.

It is a mentality. If you want to be a fly-bynight, you will live like that, but if you are registered, you are a formalised business person and you have rights to certain facilities given to businesses. For example, work space and rights within the law. But I would like to let the SMEs know that we are with them.

We want to respond to women, war veterans and young people. So we met with groups of youths, women and war veterans to come up with their programmes. My appeal is that they should contact our offices.