Towards a just model policy for the informal sector

IN 2018, the government highlighted its ambition to harness the informal economy by formalising it so as to tap into its unexplored revenue.

The same sentiments were echoed by the president in 2023 when he announced government`s plans to craft a formalisation strategy.

To that end, the Zimbabwe Coalition on Debt and Development (Zimcodd) carried out a survey to understand the plight informal sector actors with the intention of coming up with actionable organic policy alternatives.

The following policy alternatives are proposed towards a just model policy framework for an inclusive and progressive informal economy

In redressing the currency crisis that affects all sectors, the Ministry of Finance and Reserve Bank of Zimbabwe must adopt floating exchange rates, moving away from pegged rates, monetary policy that allows for trading with the market, government policies to attract foreign investment, and the country purchasing its own currency.

The Ministry of Finance and Economic Development in conjunction with the Ministry of Women Affairs, Community, Small and Medium Enterprise Development must establish inclusive and progressive funding alternatives that specifically target investing into the informal sector.

Approximately, 10% of the national budget must supplement these funding alternatives.

A just model policy alternative must be guided by the following principles; transparency, integrity, accountability and responsibility to flush out all under dealings and partisan allocation of resources.

A just model policy for the informal sector must respect the right to carry on trade or business as codified in Section 64 of the constitution which provides for the right to freedom of choice and practice of a trade or profession.

Further, section 24 of the constitution provides for the national objective of removing restrictions that inhibit people from working or otherwise engaging in gainful economic activities while section 13 of the constitution obliges the government to promote private initiatives and self-reliance.

The formalisation strategy or a just model policy must be cognisant of the gender dynamics and imbalances that exist in the informal sector. It must be tailor-made to guarantee gender equity.

The policy must prioritise the vulnerable and marginalised groups such as women, persons with disability and youths.

There is need for the establishment of a vulnerable funding pool.

At the same time, the government must set aside at least 10% of its procurement contracts for the same.

Government public procurement or spending must also target the informal sector, this means at least 30% of government procurement must be from the informal sector.

Another 10% of this must be earmarked for vulnerable groups mentioned above.

The just model policy must seek to strike a deal with insurance brokers on possible and yet comprehensive ways of insuring the informal sector particularly the Glen

View Area 8 complex in Harare.

There is need for the government to reinvest infrastructure that necessitates the operations of the informal sector.

Modernisation of flea markets and vending sites will go a long way in attracting customers and investors.

The government needs to find better ways of taxing the informal sector which will not suffocate emerging and struggling businesses.

Policy formulation or strategy development must take the hybrid approach which encompasses both topdown and bottom-up approaches to ensure greater public participation and policy acceptance.

Thus, comprehensive and inclusive public hearing and consultative forums must be at the core.

The Informal Sector Inclusion Framework (Zimcodd, 2018) details how the government must include the informal sector in the mainstream economy for attainment of vision 2030. 6.

The informal sector has become the economic life line of Zimbabwe.

It is currently the nerve-centre of the economy accounting for over 40% of job creation in the country and contributing over 50% to domestic resource mobilisation.

In an attempt to promote an inclusive, just, progressive fertile ground for the success of the informal economy Zimcodd believes that the religious adoption of the proposed policy alternative will culminate in a positive transformation of the informal sector.

Zimcodd