Zimbabwe: A nation of vendors

ZIMBABWE has become a nation of “sellers”.

For one to survive — even if they are already in formal employment — they have to sell something on the side to augment their income.Although traditionally, this was an engagement confined to the low-income bracket, increasing economic difficulties in the country have seen even top-line managers establish various streams of income to ensure that they remain financially stable.

A survey by NewsDay recently established that several chief executive officers and managing directors were not content with relying on their salaries which they said were not enough to satisfy or meet their financial obligations.

These people constitute the 20% that are in formal employment, according to official statistics. Although the majority of the country’s low–income earners pocket between $150 and $500 per month, top managers earn an average of $14 000.

The Consumer Council of Zimbabwe (CCZ) says a family of six requires $559 every month to meet all its expenses.

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Vending now a lifeline

Phyllis Gwete, an informal trader in Mabvuku — a low-income suburb — sells various foodstuffs on the informal market which include sausages, spaghetti and chicken.

She also sews and sells sheets, curtains and bed-spreads from her home for a living. Gwete said she buys sausages at $7 a pack of 10 and resells them for $1 for a single sausage.

She buys a box of 20 packets of spaghetti at $10 and resells them for $1,50 for two packets.

She said in a good month she can get as much as $100 profit.

“Uptake for the sheets, curtains and bedspreads is slow, but for foodstuffs like spaghetti, chicken and sausages it is always good as people need food all the time,” Gwete said.

Those not in formal employment like Gwete were not the only ones who have turned to vending as formally employed people were also resorting to informal trade to augment their meagre salaries.

Zimbabwe Congress of Trade Unions (ZCTU) president George Nkiwane said the trend of vending will not end in the near future unless there is a revival of the manufacturing sector which is on its knees at the moment.

“This trend shows that there is no future at the workplaces. There are people who can go for six months without pay, but they will not abscond as the workplace is the market for their goods and services. Workers are now selling goods among themselves each day,” he said.

Nkiwane said workers have so far gone for years without salary increases so for Zimbabweans, as enterprising as they are, the vending trend will continue for a long time to come.

A teacher in Budiriro, who declined to be named, said she was involved in crossborder trading to South Africa from where she buys television sets, digital satellite TV decoders, radio sets, fridges and stoves for sale in the country.

“I normally go to Musina or sometimes Johannesburg on a Friday and spend Saturday shopping and come back on Sunday night ready for work on Monday. This has been my lifestyle since 2009. I get some 100% or 50% profit on some of these goods. I usually sell them over two or three months to customers,” the teacher said.

Several managing directors of companies in the country have also joined the “vending” train, although they play the game with higher stakes, raking in thousands of dollars through the sale of books, potatoes, chickens, meat, milk and other items.

A snap survey by NewsDay showed that most top executive have farms and small companies they run as their other interests as a way of boosting their income.

One top executive in the capital told NewsDay that this was the way to survive in this economy because salaries alone are not sufficient.

“In the past top management never used to do other jobs on the sidelines, but now it’s the new trend. Many companies are not paying workers on time including the top management which makes it difficult to meet our obligations as individuals,” the executive said.

Some executives earn extra income through leasing out their properties and that has helped them on a monthly basis.

Skewed resource deployment

Research firm MMC Capital said the economy was now “internalised”, implying that formal employment was now very low, therefore accounting for the increase in the number of people seeking several ways of bringing in income.

“Those people who are in jobs are not fully employed as they can do other things, meaning resources are not fully deployed. One’s work should make sure that your hands are tied,” MMC Capital said.

The research firm said most companies were operating at 40% of their total capacity and that meant resources were not fully deployed.

According to the 2013 manufacturing survey, industry capacity utilisation is at 39,4%. In 2013 a total of over 9 000 jobs were lost while 75 companies closed shop.

The retrenchment board has so far hinted that more closures will happen this year as companies fail to attract funding and the liquidity crisis continues to affect the economy. The unemployment levels of the country are still at 11%.

Gloomy outlook

The ZCTU has predicted a slash in workers’ wages, a development that is likely to see more and more formally employed people resorting to vending.

The country is showing little sign of a swift economic recovery in the next six months. The prevailing harsh economic environment seems set to continue and force more firms to downsize during the course of the year.

ZCTU secretary-general Japhet Moyo told our sister paper The Southern Eye recently that the continued decline in industrial performance pointed to a very gloomy year for the ordinary workers already battling to put food on the table.

Liquidity crunch biting

Many local companies have been struggling to pay their workers as the liquidity crunch afflicting the country bites deeper and deeper.

Government has failed to pay its workers on time, postponing the pay date by three days as the financial crisis tightened. Civil servants have accused their employer of changing pay dates, a move they described as unfair labour practice.

President Robert Mugabe’s Zanu PF has failed to deliver on election promises of higher wages made last year.

The Finance ministry issued a statement recently, stating that it had moved the pay date from March 25 to March 27.

“Civil Service Commission advises that the ministry of Finance (Treasury) has moved the March 2014 pay date for the rest of the civil service from March 25 to March 27 2014,” Civil Service Commission secretary Pretty Sunguro said in the statement.

Zimbabwe Teachers’ Association chief executive Sifiso Ndlovu is on record saying they feared the government was likely to backtrack on its promises to award a salary increment this month.

“This forewarns of bad things that lie ahead for us,” he was quoted saying. “The government’s move has lessened our hope and trust that we will get a salary increment next month. It is apparent that the government will not increase civil servants’ salaries.”

Zimbabwe has failed since 2009 when it adopted the multicurrency regime to attract significant foreign direct investment (FDI) due to the $6,1 billion externsl debt overhung.

The country, since 2009, has not managed to record FDI close to $1 billion compared to its regional counterparts who have FDI of more than a billion dollars annually.

Executives join ‘vending train’ Several managing directors of companies in the country have also joined the “vending” train, although they play the game with higher stakes, raking in thousands of dollars through the sale of books, potatoes, chickens, meat, milk and other items.