MANUFACTURING activities in the informal sector stand a better chance of earning higher monthly revenues than those in the retail and services, a new report has shown.
BY TATIRA ZWINOIRA
According to the Zimbabwe National Chamber of Commerce (ZNCC) survey on the sector whose report was released last week, about 36% of the players in the manufacturing sector earn over $1 200 in monthly incomes.
“In general, being engaged in the manufacturing sector would give informal sector players higher opportunities for earning higher revenues, as about 36% of all players in the manufacturing sector generate monthly revenues of over $1 200,” ZNCC said.
“Generally, manufacturing sector activities are more rewarding compared to the services and retails services and retail sectors. About 44% of informal sector businesses who earn above
$1 200 a month are in the manufacturing sector, while about 41% are in the retail sector and 15% are in the services sector.” In a breakdown of what activities these informal manufacturers are involved in, the report found them to be food processing, furniture manufacturing and carpentry, steel fabrication and welding, shoes manufacturing, and tombstone and sculpture-making.
Of those subsectors, all the informal players who are into peanut butter — making earn revenues of more than $1 200 monthly, followed by tombstone and sculpture-making where 50% earn the above amount.
“The less rewarding manufacturing business ventures include shoe manufacturing, where about 33% of those engaged in the business generate revenues less than $200 per month, with 66% of them generating at most $400. Garment manufacturers also have the majority (55%) earning at most $400 per month,” ZNCC said.
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While manufacturing provides more returns, the retail sector employs most of the informal players at 50%, followed by manufacturing 29%, services at 21% and mining which is below 1%.
Those engaged in retail services are involved in groceries, clothing, cosmetics, shoe selling, packaging, electrical gadgets, stationery, timber retailing, and horticulture, among others.
The highest-paying business ventures in retail are those selling timber, energy products and cosmetics with one in three of such businesses earning $1 200, the report said.
In the services sector, those engaged in the informal money lending generate more than $1 200 per month.
ZNCC president Divine Ndhlukula said the results on the survey would help in policy formulation and are coming at a time when there are calls for government to put in place viable mechanisms to harness potential in the informal sector.
“The emergence of the informal sector has been a cause for concern given that the sector is competing with registered formal businesses. The survey comes at a time when liquidity constraints and foreign currency challenges are affecting cash flow positions of business and thus operations.” The ZNCC report was launched under theme Understanding the Dynamics and Characteristics of the Informal Sector in Zimbabwe and is meant to be the body’s flagship annual survey.
