Vendor-Preneurship in Zimbabwe. A Case of Economic Survival

Contents

Abstract

1. Introduction

2. Literature Review

3. Research Methodology

4. Results and discussion of findings

5. Conclusion

References

VENDOR-PRENEURSHIP IN ZIMBABWE JUST A CASE OF ECONOMIC SURVIVAL

Dzidzai D Mandia 1 : Christ University – India, Christ College an Affiliate of Great Zimbabwe University: Zimbabwe; Domboshawa Theological College an associate college of The Zimbabwe Open University, Zimbabwe, Centre For Entrepreneurship Development Zimbabwe

Elangovan, N. 2 Christ University – India.

Rafael Muhwandavaka 3 : Christ College – an Affiliate of the Great Zimbabwe State University - Zimbabwe .

Abstract

This paper focused on Small and Medium Enterprise development in Zimbabwe as a tool to revitalise the devastated economy. The paper adopted the qualitative research approach. The sample size of the paper comprised of 471 participants drawn out of three high density suburbs in Harare, Epworth had 230 participants, Mabvuku 155 participants and Mbare had 86 participants. Convenience sampling was used to identify the sample size. The paper recommended that the Government should put mechanisms in place to grow the economy. Industrialisation should be encourage through the provision of subsidies to the manufacturing sector, tax incentives to the entire industrial sector to help to revamp the economy. It is very difficult for the economy to be sustained by vending. There is need to create jobs.

1. Introduction

When an African country’s general livelihood comes from basic activities such as vending of basic agricultural produce and general retail market activities, it may be a sign of a deteriorating economy or simply an extension of the cultural African economy. Zimbabwe seems to have slipped into a market economy without the source of production. Yet on basic or primary supplies, the street of many if not all towns and townships are filled with market stalls selling a combination of wares from agricultural to electronics goods. Industry is now at 39% capacity down from a high of 60% in 2011 at the height of the inclusive government which had boosted the economy from the devastating stagflation of 2007/8 that saw the country’s industry collapse to less than 10% capacity (World Statistics Pocketbook, 2016). It is at this time that the local Zimbabwe currency collapsed and a basket of foreign currencies was introduced to prop up the economy. Since that time there has not been much effort put to boost the industrial base in order to restore the economy. Unemployment is estimated to have reached 90% at that stage. This figure seems to have not changed according to economic estimates, even though official statistics show that broad unemployment is at 10.7% (NewsdzeZimbabwe, 2015). Industries have scaled down operations and there have been recorded net losses in official employment creation.

Given this background this research sought to identify what is sustaining the people especially in designated poverty stricken areas such as high density suburbs. Three of these were chosen and these are Epworth with a population of 167 462, Mbare with a population of 356 840 and Mabvuku with a population of 112 000 respectively (Zimbabwe National Statistics Agency, 2014). The truth of the matter is that people are surviving and the method is what needs to be understood. The use of the ‘coin’, which is currency introduced by the Zimbabwean Government to provide change to the consumers, as the country had adopted the United States Dollar currency. The United States currency adopted was the larger denominations as no coins were made available. The coin was then introduced as change. This distorted the prices of commodities and encouraged the basis of the survival strategy process to be intriguing.

The Zimbabwean economy is characterized by targeted restrictive measures internationally or sanctions on the kind of trade that can be conducted. These measures, although they have now been largely relaxed, have caused significant harm to the economy even though the main issue is that the current government has not concentrated on developing the economy. Some have accused the government of not understanding the economy and others have indicated that they have no capacity to do so due the rampant corruption at institutional levels. The restrictions or sanctions are generally imposed by the Western world specifically the USA and the European Union. In contrast the country is also rich in natural resources ranging from underground metals to agricultural conditions that if correctly exploited can make Zimbabwe a country to contend with on the world market. The Zimbabwean population in the 2002 census was 14,4 million and the population size has gone down to 12,2 million in line with the 2012 census. The reduction in population by 2,2 million might have been attributed to deaths caused by poverty as people are no longer able to afford basic commodities, due to stagflation which has rocked the nation.

2. Literature Review

“Business formations depends on our exercising abilities the Creator has instilled in every person – the creativity and desire to serve others with honest goods and useful services. As it happens, in Latin America and particularly in Africa, women excel in launching new small businesses” (Novak 2009:30).

But job creation must be added to education. There cannot be new employees if there are not enough employers, that is to say, new business. The creation of an atmosphere, a legal system, and a banking system favourable to the creation of many new small business is an urgent matter for the liberation of the poor (Novak 2009:30).

Two of those reasons are that developing- country trade restrictions have historically been biased against the sectors in which the poor work and against the goods the poor consume. From 1960 until 1990 many countries followed import-substitution development strategies, which entailed high trade barriers to promote the growth of capital-intensive, import-competing manufacturing industries. These barriers inevitably depressed the relative price of agricultural products, reducing returns to farmers. Also shifted resources from low-skilled, labour-intensive manufacturing (such as textiles, electronics, clothing and shoes), the type of manufacturing in which many developing countries have a comparative advantage and many poor workers are employed (Novak, 2009: 296).

3. Research Methodology

The qualitative research methodology was adopted in this paper. A sample size of 471 participants from three high density suburbs in Harare were conveniently selected. The distribution of the sample size of the respondents observed is as listed on the table below:-

illustration not visible in this excerpt

On further examination of the above table it was noted that those that are below 25 years of age were school leavers but the majority were school drop-outs who are holding stalls on behalf of their families. About 70% where operating on behalf of their families whilst 26% were operating because there was nothing else to do. Out of the age group between 25 and 44 years, 80 % were women supplementing household income and 16% were men who were either retrenched or just trying to make a living. The remaining four percent did not give reasons for their being vendors. The group above 54 years old was composed of 70% women and 30% men who felt they had nothing else to do and were no longer employable.

In order to ensure that the process was not a once off process, a team of observers was deployed in the respective areas of study to identify the regular market stall holders. This was done because the stalls are not city council designated but the individuals have a mutual understanding of who operates from what part. These regulars were interviewed whilst researchers filled the questionnaire which was the research instrument.

During the period of observation the prices and containers used to gauge the quantities sold were identified and compared in the three suburbs. This was done by actually purchasing the products sold and compared amongst the three townships to determine the similarities. The purchases were done at least twice a week. This was done for the entire four weeks of observation. The items bought were as follows:

illustration not visible in this excerpt

4. Results and discussion of findings

Ideally, the purpose of this study was to find out how people are surviving in a failed economy, an economy that has been reduced to vending instead of industrial activity. Utilisation capacity has been declining and as of end of 2014 it stood at about 34% and estimated to be going down every year according to the Zimbabwe Chamber of Industries.

The result of the above indicate that people in these high density townships are living on an average of less than a dollar per day. This implies that the majority of the respondents live below the poverty datum line, as they cannot afford to make ends meet. Zimstats which is a Zimbabwean government statistical institution postulated in December 2014 that the working labour force in Zimbabwe constituted 85%. The calculation was based on people who are in the informal trade sector, and these do not contribute to the Gross National Product of the nation. The true unemployment rate in Zimbabwe has reached an estimated 90% level, which is not a healthy situation for a country which once had a vibrant agricultural and industrial economy.

5. Conclusion

The results indicate that most of these individuals leave below the poverty datum line as indicated by the Zimbabwe National Statistics Agency where an individual should at least have a one hundred and one dollars per month. However, indications are that the index used should differentiate the low income from the high income living standards. The informal system has reduced this level to US$382.00 for a family of five. There is therefore need for the Government to put mechanisms in place to grow the economy by encouraging industrialisation, subsidies to the manufacturing sector, tax incentives to the industrial sector to allow the industrial sector to rehabilitate and become productive. There is no way the rest of the people can survive in the communities through vending. Over 95% of the population cannot become vendors. Some people need to go to work, and there is need to create employment through the revitalisation of the agricultural and industrial sectors.

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