Youths in the Informal Economy Must be Supported

NB: This Opinion Contribution was first published in The Zimbabwe Independent Newspaper on Friday the 1st of April 2022

By Samuel Wadzai, Executive Director of Vendors Initiative for Social and Economic Transformation (VISET)

Email: swadzai@visetonline.org

Twitter: @samwadzai

The Zimbabwean social, political and economic landscape has gone through radical transformation in the last two decades. The turbid political environment has made Zimbabwe an unfavorable destination for investors, while domestic products have struggled to find markets. As a result, industries have closed shop and the formal labor force has been forced into the informal economy. Many governments in Southern Africa and Africa as a whole do not recognise the importance of the sector despite its enormous contribution to the region’s economy. For instance, the United States Agency for International Development (USAID, 2010) has estimated that the value of trade conducted by youth and women in the informal economy, in the SADC region is approximately US$7 billion annually. However, many governments view it as a threat  as opposed to managing and nurturing it so that it becomes a secure and viable support system for people who cannot secure formal employment or for those who have identified an opportunity to create a business for themselves and employ others.

According to the International Labour Organisation (ILO), informal economy in Zimbabwe is characterised by poor working conditions. In its Situational analysis of Women in the informal economy in Zimbabwe, the ILO further states that, in spite of the health and safety risks that abound in the informal economy, study findings revealed that labour inspectors hardly ever visit such working premises mainly due to lack of resources and the absence of formal systems and structures for extending the same services to the informal economy as is done for the formal economy.

Involvement of youth in the informal sector in Zimbabwe

 The Informal Sector Literature has shown that youth constitute most of the workers in the informal sector in almost all the developing countries. According to research findings by UNRISID (2010) because of the large proportion of the youth in the informal sector there is often a tendency for them to be involved in erratic and often corrupt segments of the sector. In Zimbabwe, the percentages of the youth representation in the informal sector have been attributed to a variety of factors.

One of the major factors is its easy accessibility and ready availability for youth participation in the sector. Research by Carr and Chen (2001) demonstrated that the connection between employment in the informal sector and being poor is often stronger amongst the youth than it is for the older generation. According to the same findings the older generation’s participating in the informal sector tend to be overrepresented at the top segments of the sector while youth are at the bottom tiers where they specialize in trading perishable items. This analysis posits that, youth dynamics in the informal sector points to intricacies involved in the context of urban and informal sector development.

Even though the youths are the majority in the informal economy, they are often excluded from policy processes and this exclusion manifests in different forms. Participation mechanisms and processes for youth in the sector are often inappropriate, employing economic jargon or disempowering language with youth being viewed in a negative light. This exclusion results in the formulation of top-down policies that do not address the specific concerns of the youth. For example, most policies governing the financial sector are not friendly to the informal sector players. To open bank accounts, banks require too much documentation which informal sector players may fail to produce, even if they might have the money to bank. The requirements are mostly a result of policy pronouncements, which makes policy a hindrance to access to bank services by the informal sector players

To make matters worse, many countries, especially in the SADC region, do not have appropriate legal and policy frameworks to protect and nurture the informal economy and to protect youth as is the case in the formal sector. Where there is some form of legal framework, such frameworks fail to address the needs of the youth and the power dynamics at play in the informal economy. The lack of appropriate legal frameworks exposes youth to all manner of abuses, particularly from law enforcement agencies and officials who show little or no concern for the very laws they are supposed to uphold. This is expressed in various ways including police brutality, corruption and double taxation

The Government of Zimbabwe continue to use old colonial laws to manage the informal economy. These laws promote perceptions that informal economy workers are illegal and a nuisance. Further, these laws allow city authorities to ‘forcibly remove any nuisance, obstruction or encroachment on streets or any public place’ The Ministry of Local Government in 2017 threatened to deploy security forces to remove street vendors operating in the central business districts of major towns and cities in Zimbabwe.

Strategies for improving the lives of youth working in the informal sector

There is need for a collective national acceptance of the informal sector as new employer of the youths in the country. The government of Zimbabwe has continued to lack the political will to align the relevant legislations to the new constitution provisions. Amongst other Socio and Economic Rights; Section 64 of the Constitution states that every person has the right to choose and carry on any profession, trade or occupation, but the practice of a profession, trade or may be regulated by law. As a result citizens continue to suffer from human rights violations. Despite these challenges the informal economy remain uncoordinated and have not build effective solidarity structures to be able to engage and defend their source of livelihoods and the alternative economy that has sustained the economy as a whole.

There is need for the youth in the informal sector to build a coordinated voice in order to be heard by the solution holders at various levels. The disfranchisement and lack of coordination has exposed the group to land barons and political manipulation. The politicization has multiple effects; allocation of operating marketing space on political party lines is exclusionary thereby leading to loses of potential source of livelihoods. Further to this the rental fees that are being paid daily to land barons and politicians is denying the country of potential revenue thus disempowering the informal sector players from demanding better service delivery and spaces to contribute to economic development.

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