Stanford Chiwanga recently in Pretoria
ZIMBABWEAN business persons based in South Africa have expressed interest in partnering the local informal sector to unlock economic growth.
Energised by President Emerson Mnangagwa’s call for the diaspora business community to invest back home, Zimbabwean entrepreneurs in the neighbouring country have already outlined plans to target the informal sector beginning the first quarter of 2018.
Chairperson of the Zimbabwe Business Forum-South Africa, Mr Marshal Rufura Ndlela, disclosed this last Saturday at an executive breakfast meeting held by the organisation in Pretoria, South Africa under the theme: “Investing in a New Zimbabwe”.
He said their decision was focused on the number of people in the informal sector, which consists of a large chunk of the nation’s work force, adding that the formalisation of the sector could turn it into one of the biggest Gross Domestic Product contributors in Zimbabwe.
“We have come to the realisation that the informal sector kept the economy of Zimbabwe from tipping over, thus it will be wise to invest in it as well. We are going to go to the grassroots and make sure that people not only understand what we want to do for their informal businesses but also participate in their metamorphosis,” said Mr Ndlela.
He added that the move to invest in the informal sector has been taken after an extensive literature review and discussions about the potential of Zimbabwe’s informal sector.
“There are 2, 8 million business owners who are in the informal sector in Zimbabwe and they employ about two million people.
“This is a sector with untapped financial resources. These businesses are at incubation stage and they have been there for a long time due to the poor performance of the economy, lack of capital and a shortage of skills and knowledge,” he said.
“A good number of our members are targeting certain businesses in that sector such as shoe making, furniture manufacturing and agro processing industries. The plan is not to take over these businesses but to form partnerships. The plan is to introduce business ethics, to have efficiency, to set up proper structures, to formalise them.”
Mr Ndlela said some of the informal businesses have people who are well skilled and knowledgeable but lack business management skills. A 2012 World Bank study states that Zimbabwe has 2, 8 million informal business owners who run 3, 5 million businesses that employ 2, 9 million people. The 2, 9 million employees, together with the 2, 8 million business owners, brought the number of people working in the informal sector to 5, 7-million.
Zimbabwe’s adult population was estimated at 5, 9 million in the report.
According to Mr Ndlela, the Forum is in the process of coming up with safeguards such as corporate governance mechanisms to ensure the safety of their investments.
“We are not going to walk in blindly, we will use the strong legal and institutional frameworks of Zimbabwe. We will separate custody from the administration of the businesses and meticulous investment limits and risks ratings will be done,” he said.
“There is lack of transparency and accountability in businesses in Zimbabwe. We have issues with poor administration, corruption and profiteering. The first two can be dealt with quickly through transparency and accountability.
“Profiteering will be our biggest challenge. Our fellow brothers and sisters believe that getting 100 percent profits is clever business but it is not. Such businesses don’t last. It is unfair on customers and it causes inflation.”