The measures of halting the COVID-19 epidemic have landed a heavy blow on the informal sector of Zimbabwe. The COVID -19 pandemic has posed live threats and also a severe economic shock. The Worldometer reported that, to date, 216 countries have been affected by the COVID-19. Of note, there are approximately 7,872,620 confirmed cases, and death neared 432,475 globally. The informal markets around the globe have not been spared and specifically Africa. Noteworthy, the International Monetary Fund (2018) argued that Africa possesses the most significant informal economy. Likewise, the majority of Zimbabweans livelihoods depend on the informal sector. The negative economic impact rises simultaneously as the countries scramble to curtail the deadly disease. Against this backdrop, the mitigation measures imposed by some countries have, however, left some communities and families in a difficult situation. Zimbabwe is one of the countries that embarked on robust measures to curtain the disease. For instance, it issued a decree that people must stay at home; however, no meaningful policies, tax relief, or financial bailout were put in place to protect the marginalized and informal traders’ livelihoods. However, the majority of households in Zimbabwe are impoverished and survive on hand to mouth.Zimbabwe failed to provide stimulus packages to cushion the informal businesses and informal traders’ livelihoods.
The meltdown of the Zimbabwean economy and the rise of the informal sector
Zimbabwe’s economic meltdown and political turmoil emerged around 2000. The rampant and violent land reform program crippled the agriculture sector, which was once the backbone of the economy. Additionally, the imposition of sanctions by the US and the EU in 2003 and 2004 further strained the already fragile economy. The Southern African country continues to face poor governance, corruption, low level of investment, high level of unemployment, drought, shortages of essential commodities, an unjustified increase of primary products, and other challenges. As such, it became a fertile ground for the booming of the informal sector and shrinking of the formal area. The manufacturing, textile, and clothing industries collapsed. Recently, almost 90% of Zimbabweans worked in the informal sector, such as trading and self-employment.
Further, some Zimbabweans who are formally employed are indirectly involved in informal part-time jobs to supplement the low salaries. For instance, some are cross border traders. The majority of the Zimbabweans are living below the poverty datum line and require urgent food assistance. Zimbabwe is also experiencing large scale electricity outages. On top of all these challenges, Zimbabwe, like all other countries, is faced with the COVID -19 epidemic. Amidst of these crises, the government placed mitigation measures like lockdown. At the time of this writing, the formal markets were not allowed to operate except those that sell foodstuffs. Zimbabwe was on level 2 of lockdown, but schools, universities, the movement of people, and large gatherings, was still restricted.
Impact of COVID -19 control measures on the livelihood of the informal traders
Bouey (2020) reveals that informal businesses are the engine of the economy in most countries. Like any pandemic, the lowest-paid workers and informal traders are likely to be more affected economically. The informal traders are affected because they are neither able to work remotely or possess savings to cater to an economic downturn. Most African governments usually shut down informal markets by force during global pandemics. For instance, the Zambia government employed military force to shut down informal markets amid the 2018 cholera outbreak. Farmers and informal traders lost their fresh produce, and their livelihoods were crippled. The bulk of the informal traders lacked proper shelter, food among other necessities. During the Ebola outbreak 2014-15 in Liberia and Sierra Leone, most households required economic support as the government shut down the informal markets. The World Food Program Analysis reported that restrictions and market closure in Central and West Africa negatively affected 80% of smallholder farmers and informal traders. In the same vein, the Al Jazeera (2020) noted that containment measures ushered economic hardship to casual workers in Kenya, yet they constitute 83.6% of the whole workforce.
Most informal workplaces are still closed as the government has set up some minimum requirements for a workplace to open. Most of the informal traders cannot afford requirements set by Zimbabwean authorities. Over-congested informal markets such as Mbare Siyaso, Mupedzanhamo Market, 4th Street, Glenview Area 8 Furniture Complex, and Gazaland lack supporting structures, water, and sanitation. These areas are threats of spreading the COVID -19 pandemic. The measures imposed by authorities are almost impossible as the government fails to provide the supporting structures to their citizens such as stable water supplies. Resultantly, after two months of no income, most informal traders are mired in absolute poverty. While this might be the case, the poor are further marginalized. Most vulnerable families are further exposed to poverty, reduced access to health care, and missed meals for children. Evans (2020) denoted that the economic impacts of COVID-19 have a drastic effect on the well-being of communities and families.
Informal traders face dual contests both on supply and demand sides. Some informal traders have no option except to stay home with their children as schools and movements is restricted. Moreover, the supply chain is profoundly affected, resulting in a lack of parts of intermediate goods. There was a sudden loss of revenue and demand for informal traders and SMEs. Their ability to function was hindered, contributing to liquidity shortages. Fear and uncertainty were caused by lost income as consumers were laid off by their employers who were no longer able to pay them. The direct impact of the shutdown is the decreased level of the output of most economies. The consumer’s expenditure dropped, the decline in GDP, reduced demand for goods and services. According to the international labor organization, COVID-19 could contribute to increased unemployment by up to 24.7 million. Most informal traders are struggling to pay rentals, electricity, and water. Worse, the authorities destroyed some illegal structures of the informal traders as a measure of containing COVID-19 without first considering the consequences as far as the livelihoods of informal traders are concerned. The probability of resuming business by many informal traders is very slim.
The impact of COVID-19 is severe to informal sector of Zimbabwe attributed to lower resilient levels. It shall be a struggle for informal traders to rebuild connections with their former networks as the supply chain has disrupted. Most informal traders, due to their size and financial capacity, lack adequate knowledge to lighten the shocks, lack flexibility resilience of withholding shocks. Most require the latest adopting strategies and technology as well as digitization, lack personal protective equipment (PPEs), such as hand sanitizers and masks, because of their irregular and insecure incomes.
On a positive note, fresh markets have been allowed to operate, including Mbare Fresh Market, Sakubva Fresh Market, among others. The informal traders’ organizations also embarked on a massive program to mobilize resources. As such, some informal traders received materials such as sanitizers and masks throughout the country. However, some informal traders did not benefit from this program. Moreover, the demand for fresh produce has dropped because of reduced travel and decreased human traffic. Resultantly, income could be low, and women might be affected more since they make up a significant percentage of the informal traders. Some informal traders have resorted to operating from their home, raising hygienic concerns, which might contribute to the outbreak of the COVID -19 epidemic. Currently, some informal traders have flooded the streets of Harare after two months of no income since the announcement of a decree that ordered all people to stay home.
The government of Zimbabwe should develop long-term solutions for a future pandemic to minimize the adverse effects on informal traders’ livelihoods. A careful tailor-made strategy to accommodate all Zimbabweans should substitute a one–size– fit all approach.
The government challenged to be proactive in the mitigation of the adverse impact on the informal sector. A stimulus package is required to cushion the informal economy. Prioritization and efficiency of expenditures are urgently needed. Authorities must come up with a way of assisting the affected informal traders in a fair and non-politicized manner. The Zimbabwe government should draw lessons from other countries and strengthen its safety nets, such as subsidized health and cash transfers. Namibia has come up with social safety net policies to cushion the informal sector. For example, it has come up with an emergency income grant for all workers who lost jobs. On the same stem, South Africa and Rwanda have taken bold steps to protect their economies, such as some packages for the poor. Kenyan officials have also accepted a pay cut. The government should prioritize the provision of essential goods and services such as mealie meal sanitation and water to all residential areas. Long queues undermine the curtail measures and might contribute to the time bomb of the COVID-19.