Socio-economic hardships spawn vicious cycle of urban poverty

FORTY-EIGHT-YEAR-OLD Rudo Mutepaire’s life is one of perpetual struggle.

Phillip Chidavaenzi

The self-employed mother of four scraps little profit from her vegetable vending enterprise which, even when pooled together with proceeds from her husband’s shoe repair “business”, still falls far short of meeting the family’s basic needs.

A larger chunk of the family income goes to the children’s school fees, often leaving the Mutepaires battling to get a square meal.

“Things seem to be getting worse every day,” says Mutepaire with the resignation of a weary desert traveller who has given up hope of finding an oasis.

“It’s difficult. These days there are many of us who are vending so there is little business, which translates to little earnings.”

Her husband’s business has also been waning over the past few years, and Mutepaire feels this is probably a knock–on effect from the cheap Chinese imports flooding the local market.

“It appears now when people’s shoes get defects, they just dump them and buy new ones as they are cheaper now,” she says.

The cumulative effect, according to Mutepaire, is the erosion of her family’s disposable income leaving the family on the edge.

She says before the shoe– making company her husband used to work for folded a few years ago, they were guaranteed a monthly income that made it possible for them to lead a relatively comfortable lifestyle. But this is no longer the case.

Often, she has to buy foodstuffs in small, cheaper portions through which innovative vendors are making a killing. Known in street lingo as tsaona — loosely translated into “emergency back-up” — the small food portions go for anything, but not exceeding $1.

In a frank, no-holds–barred-manner, Mutepaire makes the rare admission that poverty is stalking her life, and she is clueless on how to get out of it.

“I don’t even know for how long I’m going to hold on,” she says. “Hope is all that I have, that perhaps, somehow, things will get better.”

When that will be, she does not know, but her prayer is that the respite from misfortune’s roll call, whenever it eventually knocks on her door, will find her alive.

Hers is one of thousands of cases. She finds herself in a hard place where many urbanites across the country can be located as the economy, which had found a new lease of life during the Government of National Unity (GNU) in which Zanu PF partnered with the opposition MDC-T in an uneasy romance that gave hope to the people of Zimbabwe.

Following the end of the GNU’s tenure after Zanu PF’s sweeping win in the July 31 2013 elections, there has been rapid retrogression with the economy hurtling in a tailspin which has led to deflation.

Although the adoption of the US dollar in 2009 brought a semblance of stability to an economy galloping toward an inevitable demise, the continued folding-up of companies and a serious liquidity crunch have driven many of the country’s urbanites straight into the jaws of poverty.

Many outpriced into poverty

INFORMATION, Media and Broadcasting Services minister Jonathan Moyo say the multicurrency regime has presented serious challenges to the drive for the “new economy” to forge ahead because of serious distortions.

“Even a newspaper here costs $1. There is nothing of value that you can get for less than $1 and that means within this system we need a strategic review,” Moyo said while delivering a lecture at the Zimbabwe Staff College.

“There is the problem of false pricing. We still have the psychology of a pricing model based on the Zimbabwe dollar during the hyper-inflationary era. We don’t need price controls, but a strategy to control false pricing.”

Local consumers are being ripped off by unscrupulous wholesalers and retailers who are charging exorbitant prices on basic commodities mainly imported from South Africa, with most realising over 100% in profit in what has become an over-pricing scandal.

A survey by the National Incomes and Pricing Commission shows that Zimbabweans are paying through the nose for basic commodities imported from South Africa.

Products such as cooking oil, sugar, milk, salt, washing powder, washing soap, toothpaste, eggs, tomatoes, onions and potatoes are far cheaper in South Africa than in Zimbabwe.

The goods, however, land in the country at double or triple the price they were obtained at in South Africa, implying that local consumers were paying too much for their consumption.

“The other problem that we have to deal with is the pricing models in our shops. Because of these obscene salaries paid to certain individuals, they create false prices for basic goods in our shops. Currently, you can’t buy anything for less than a dollar unless it is valueless like a bubble gum or a sweet. Even a newspaper here costs one dollar,” Moyo says.

Consumer Council of Zimbabwe (CCZ) executive director Rosemary Siyachitema weighs in and calls for regulation on pricing.

“This is a free market, and they are no consumer protection laws. As the CCZ, we have put forward to government the required information so that as policymakers they are aware of what is happening in the market and come up with some action,” Siyachitema says.

“The other issue is that in Zimbabwe, the US dollar is undervalued and it’s hard for the consumers. The dollar should be valued more and should buy more, but this issue of overpricing was a thinking that was brought from the Zimbabwe dollar era.”

If the prevailing hardships are anything to go by, Zimbabwe is sure to miss Millennium Development Goal 1, whose targets include halving the proportion of people whose income is less than the Total Consumption Poverty Line and achieving full and productive employment and decent work for all by 2015.

The goal also obliges nations to have sliced by half the proportion of people suffering from hunger and reduced by two-thirds the proportion of malnourished children under five by 2015.

Company closures spell doom

FAILURE of most companies to operate at full capacity and the closure of others is leaving many workers unemployed and ordinary Zimbabweans suffering.

Finance minister Patrick Chinamasa has admitted that unless Zimbabwe’s manufacturing sector is resuscitated, there is not going to be anything much to celebrate. His sentiments come in the wake of indications by the Zimbabwe Congress of Trade Unions (ZCTU) that a record 9 617 job losses and 75 company closures were recorded last year.

ZCTU secretary-general Japhet Moyo says a recent survey by the labour body showed that the most affected workers were in the clothing, engineering, furniture, metal, tobacco, textile, chemicals, food, agriculture and catering sectors, among others.

“A survey by the ZCTU among its affiliates noted that from reports of 15 out of 30 unions affiliated to the ZCTU, 75 companies closed shop throwing 9 617 workers out of employment,” Moyo says.

Social commentator Robert Mhishi says company closures set the stage for ripple effects that culminate in many families, whose breadwinners would have been laid off as a consequence, living in poverty.

“The unfortunate thing,” he says, “is that once you lose your job, it will probably take a miracle to maintain your lifestyle because there are hardly any options afterwards as what else you will consider doing will not bring even half the salary you had on the job.”

He says although prices of basic commodities have remained relatively stable since the adoption of the US dollar and South African rand as legal tender, more ordinary Zimbabweans in urban areas are failing to make ends meet due to hardships caused mainly by unemployment.

Poverty Reduction Forum Trust (PRFT), a non-governmental organisation which focuses on advocating for pro-poor policies, admits that many urban dwellers are increasingly facing hardships.

Struggle for survival and criminalisation of the informal trader

THE socio–economic hardships ravaging the country have turned cities like Harare into giant vending sites, which has provoked a harsh backlash from the city authorities who accuse the small-time traders of violating the city’s by-laws.

PRFT attributes the ballooning vendor and hawker population to low salaries and has appealed to the city authorities to soften their stance.

The forum noted in the report — titled Urban Poverty and the Struggle for Survival: Is the Informal Trader Criminal? — that many people’s livelihoods were now centred on informal trade.

“With a national unemployment rate hovering around 80%, and industry capacity utilisation still below 60%, urban Zimbabweans have displayed great ingenuity by creating jobs which have helped avoid high open unemployment despite the prevailing adverse economic conditions,” reads the report in part.

PRFT notes that the majority of Zimbabwean workers are taking home between $250 and $300 monthly so engaging in informal trade to supplement their meagre earnings is their only alternative of augmenting their income.

“However, most informal workers find themselves outside the parameters of the law — they often lack the required licence (which needs to be paid for), or they violate zoning by-laws that ban commercial activity from residential areas,” says PRFT.

Criminalising street vending is a disrespect of residents’ innovations to provide for their basic human rights, it says.

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