The informal sector in Zimbabwe:features, Impediments and Potentials

Abstract

The sluggishness of economic growth in Zimbabwe, via the formal sector, since the 1980s and more so after the introduction of ESAP in 1991 has led the informal sector to become a key producer of goods and services, becoming the safety net for the jobless. This study attempts to spell out the features of the sector in Zimbabwe, the constraints surrounding it and highlighting the sector's potentials in the economic growth of the country. The informal sector enterprises have been defined as entities having among others the following characteristics: enterprises are run on average by young people; starting capital is normally derived from personal/family savings; technology is simple and some participants are very highly skilled; the goods and services are highly fraction able and customised; reliance on indigenous resources and the sector operates outside official controls and enterprises are not registered with the registrar of companies and/or cooperatives of Zimbabwe. The sector curbs poverty, promotes tire concept of self-reliance and inevitably contributes to the economic growth of the country. The state should spearhead the removal of the sector's constraints through a mechanism that involve financial institutions, NGOs, local authorities, etc. in giving access to credits, training, creation of credit and savings associations and informal sector banks, transfer of technology and paying special consideration to women in the sector when it comes to credit allocations and training. Discriminatory practices against women should be discouraged.