Covid-19 Lockdown and the Informal Sector

The Coronavirus pandemic has had far reaching consequences beyond the spread, management and treatment of the disease. Governments world wide have taken steps to limit the spread of the virus by forcing / requesting citizens to stay at home. These measures are likely to have an adverse effect on supply side manufacturing issues and decreased business in the service sector. This coupled with the associated panic buying will inevitably result in shortages of commodities.

These interventions will have varying degrees of inconvenience and discomfort for citizens. The consequences of these lockdown measures are likely to be felt most in highly informalised economies like Zimbabwe where one’s ability to earn is determined by their presence in specific locations. Mupedziswa (2001) aptly captures, the character of the Zimbabwean informal economy by asserting that:

“The informal sector, once derided as an exclusive presence for an uneducated and unskilled individual with no prospects of gaining a job in the formal sector has become a life line for a growing number of Zimbabweans, from retrenched professionals and highly skilled workers to retirees and others entering the job market for the first time.”

The informal sector has become the life blood of the economy as it is now the biggest employer and arguably the engine of the nation’s productive capacity.

Various Western governments have put in place stimulus packages to cushion their economies and preserve the livelihoods of self employed citizens. Such economic approaches would fall flat informalised economies like Zimbabwe as it would be difficult to coordinate and mainstream interventions. The government of Zimbabwe has always maintained a hostile and confrontation approach towards the regulation of the informal sector. Successive macro-economic policies have failed to create platforms that can regulate the informal sector by creating interlinkages with the formal sectors. Operation Murambatsvina provides a classic example of the relationship of the State and the Informal Sector, Kamete (2009), succinctly captures this relationship by asserting that:

“the authorities at both local and national levels insisted that it was an urban “clean-up” campaign [to clear urban centres of filth but] the “filth” (being cleaned up) was closely associated with poor urban dwellers, their livelihoods and housing. That is, people became filth if they occupied or used urban spaces in violation of planning and property laws; activities became filth if they happened in undesignated areas; informal businesses and residential structures were filth if they did not have requisite planning and building permission.”

Informal trade is regulated by municipal law enforcement agents who use militaristic and aggressive tactics to regulate informal trade. Thus there is a need for a realignment of municipal departments responsible for regulating informal trade in the country. Informal trade should be regulated by departments that deal with industry and commerce since informal trade is a commercial enterprise and not a criminal activity.

The Coronavirus is going to expose the obsession of the Zimbabwean government with orthodox economics and its failure to acknowledge the contribution of the informal sector to economic development. How will the State shutdown the country whilst preserving the productive capacity of the informal sector as it has become a significant supplier of commodities.

Source: Tatenda Saunyama

*Tatenda Saunyama is a social worker based in the UK writing in his personal capacity. His academic and professional interest lie in social development, social policy and child protection.