Outside the box: The resilience that keeps the economy moving

Can the informal economy contribute to economic growth in Zimbabwe? How can we best understand and measure the indirect contributions of the informal economy?

News | 08 November 2021
Contact(s): ILO Harare Office Tel +2634369806-12 Email: harare@lo.org
HARARE, (ILO News) Global estimates on the size of informal employment (ILO 2018) show 61% of all workers worldwide are informally employed. According to estimates, almost 5.2 million people trade in the informal economy in Zimbabwe, 65% of whom are women. Women are more exposed to informal employment in most low- and lower-middle income countries and are more often found in the most vulnerable situations.

The situation in Zimbabwe is no different, demonstrated thus:

“It is time for governments to recognize and acknowledge the significance of the informal economy. It begins by recognizing informal workers as ‘workers’ – as legitimate economic agents, said Annamarie Kiaga, Informal Economy Specialist at ILO Harare/ adding that there is a strong need to formalize the informal economy in Zimbabwe.

The ILO, together with other UN agencies, specifically the UNDP, is supporting the Government of Zimbabwe to develop a national formalization strategy. This is after the Government requested the ILO for technical support to formulate a comprehensive National Strategy and Implementation Plan to Facilitate the Transition from Informal to the Formal Economy in Zimbabwe through a consultancy, The strategy will be closely aligned to the ILO Recommendation 204 on the transition from the informal to the formal economy.

The formulation process is expected to be both inclusive and participatory, ensuring that all relevant stakeholders, including workers, informal economy associations, employers and government are being consulted.

To this end, an Inception Report has already been developed, which will, among other processes, will guide on awareness raising on the benefits of formalisation among targeted stakeholders; the rights issues and necessary regulatory frameworks; growth strategies, representation and social dialogue; entrepreneurship and skills development; equality for women, people with disabilities and migrant workers; as well as extending the whole gamut of social protection to informal economy workers.

Whilst the strategy process is on-going, preliminary work to assess how the informal economy could further be supported has started. In collaboration with various institutions including the National Security Authority, the Ministry of Local Government through Municipalities: in Bulawayo an SME Centre has been refurbished; and safe markets in Chinhoyi and Chivhu established with emphasis on occupational health and safety dimensions.

Zimbabwe’s informal workforce, as in many parts of the world, comprises a wide diversity of occupations. The common factor is that workers in the informal sector lack legal recognition and work without secure contracts, worker benefits, or social protection. However, the earnings they make sustain many lives and livelihoods. In itself, the informal sector has exhibited a lot of resilience, surviving against a lot of unpredictable shocks and challenges.

The informal sector in Zimbabwe is indeed a “pool” of entrepreneurial talent that can be harnessed to fuel economic growth. The Covid 19 pandemic has seen a rise in the informal sector as people have struggled to eke out a living.

The vast majority of the workforce has never held a formal job and continues to engage in traditional or survival activities. The sector needs to be recognised as important players in the economy. There is a need to take important measures to respect the operations of the informal economy because it is an economy where a lot of livelihoods are feeding from.
“There is an urgent need to tackle informality. For hundreds of millions of workers, informality means a lack of social protection, rights at work and decent working conditions, and for enterprises it means low productivity and lack of access to finance. Data on those issues are crucial for designing appropriate and integrated policies that are tailored to the diversity of situations and needs,” 
said Florence Bonnet, author of ILO’s ground-breaking publication titled: Women and men in the informal economy: A statistical picture.
“The high incidence of informality in all its forms has multiple adverse consequences for workers, enterprises and societies and is, in particular, a major challenge for the realization of decent work for all and sustainable and inclusive development. Having managed to measure this important dimension, now included in the SDG indicators framework, this can be seen as an excellent step towards acting on it, particularly thanks to more available comparable data from countries,” said Rafael Diez de Medina, Director of ILO’s Department of Statistics.