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The Ministry of Public Service, Labour, and Social Welfare as mandated by the Cabinet, is engaging stakeholders to come up with a formalization strategy.
To achieve this, the Ministry undertook consultations across all provinces to get input from the various stakeholders. The Consultative meetings had a number of abjectives, among them to identify priority measures and sequencing of the agreed interventions to facilitate the transition from the informal to formal economy; and to provide policy recommendations that will inform the development of a national Formalization Strategy, including a road map for its implementation, monitoring, and evaluation.
The consultations were also meant to support better coordination and exchange of information on work relating to the informal economy; and to design and roll out an awareness-raising campaign, which will aim at creating conditions for a shared understanding of the notions of informal economy and formalization process.
The stakeholders, in partnership with Parliamentarians today held a validation workshop to interrogate the findings from the consultations and validate the findings from the consultative process.
“We would like to make a commitment that the formulated strategy and implementation plan brings the voices of all concerned parties to ensure that no one is left behind and will motivate all of us to implement it. We look forward to coming up with an excellent strategy and an implementation plan that can be followed through! “The informal economy must be at the table not on the table”,” said Mr. Fredson Mabhena, the Director of Legal Services in the Ministry of Public Service, Labour and Social Welfare who was standing in for Permanent Secretary, Mr. Simon Masanga.
He alluded to the National Development Strategy 1 (NDS1) 2021-25, Agenda the 2030 target 8.3 and other policy frameworks that seek to promote the transition from informal to the formal economy as a means of increasing the fiscal revenue base, regularizing employment, and ultimately growing the economy in a more sustainable manner.
Under the NDS1 Strategies for Decent Work, the Government prioritized the development and implementation of a national action plan to address the most pervasive decent work deficits in the informal economy. This is evidenced by the growth in the informal economy where over 70% of our labour force is employed according to the 4th quarter 2021, labour force survey report compiled by Zimstat.
Mr Mabhena said this clearly demonstrates a weak performance and points to myriad exigencies associated with the labour market system and leakages or underestimation of the circular flow of national income in the formal path.
The Ministry was mandated by Cabinet to come up with a formalisation strategy. As such we undertook nationwide consultations which has led to this draft document which we all be deliberating on today. The involvement of all Government Ministries and informal sector stakeholders will ensure ownership and buy-in for the implementation of the strategy document.
“It is key to highlight the importance of having a well-crafted, evidence-based national strategy which in turn will lead to the improvement in fiscal revenue, regularization of employment, reduced decent work deficits, increased social protection coverage, improvement in productivity, and economic growth as the country moves towards the attainment of an upper middle income under Vision 2030,” he said.
Ms Hopolang Phororo, the Director of ILO Office for Zimbabwe and Namibia said the event symbolised concrete actions taken by the Government of Zimbabwe and its partners in the creation of, and access, to decent and productive employment for all.
She said the UN is grateful to the Ministry of Public Service Labour and Social Welfare, the tripartite partners, the development partners and other stakeholders that have contributed to the process that went into the development of the National Strategy for the Formalization of the Informal Economy, which started to be validated today.
Zimbabwe, like many other countries in the world, is striving to make progress towards sustainable economic growth and end poverty. The Zimbabwean economy was on a recovery path from 2009 to 2018, largely due to significant contributions from mining and agriculture. Despite the positive economic growth, labour productivity did not improve, as jobs shifted from urban to rural areas, from the formal to the informal sector and from industry to agriculture, where labour productivity and incomes are lower.
She said labour market conditions have continued to deteriorate over the last two years. In 2019, Zimbabwe’s Gross Domestic Product (GDP) contracted by over 6.5 per cent due to fiscal consolidation, Cyclone Idai and the devastating impact of a drought that severely affected agriculture and electricity production. Prior to the COVID-19 pandemic, about 57 per cent of the working-age population in Zimbabwe was outside of the labour market, the unemployment rate reached 17 per cent and among those working, 80 per cent were in informal employment, with almost 8 million people food insecure. The COVID-19 pandemic and associated containment measures have further aggravated these problems. The impact has been particularly severe among informal economy workers, women and youth
“It is against this background, that the International Labour Organization (ILO), and the United Nations Development Agency (UNDP), with the support of workers and employers’ representatives, including those in the informal economy, worked to support the Ministry of Public Service Labour and Social Welfare (MPSLSW) in the development of this strategy in view of incorporating the strategy into a comprehensive National Employment Policy, as articulated in NDS1.
“What brings us here today is the fact that the Government of Zimbabwe has recognised the potential of the informal sector, and its complexity, which requires an integrated approach. Its value and contribution to the GDP cannot be underestimated. The UN values partnerships and the sustainability of interventions, which resulted in collaborating with key partners to promote decent work and social justice as a response to challenges facing informal economy workers. You will hear today of the process that went into developing this strategy, which demonstrates the utility of deploying integrated strategies to facilitate the transition from the informal to the formal economy,” she said.
Ms Phororo added that formalization is not only reducing decent work deficits in the informal economy, for both workers and economic units but also involves creating an environment that facilitates the transition from the informal to the formal economy by making it desirable, affordable and profitable.
Thus, addressing decent work deficits progressively reduces vulnerabilities and increases the capacity of workers and enterprises to enter into the formal economy in a sustainable way. For example, providing workers with basic social protection constitutes an enabling factor for their transition to formality by reducing their exposure to poverty, enhancing their access to health care and enabling them to seize economic opportunities.
“The UN also recognizes that facilitating the transition to formality is not an easy task and requires complex processes that take time. Yet it is imperative and requires a range of stakeholders, a multi-pronged and integrated approach that ensures all the sectors, particularly those with the highest potential are looked at through an ‘employment’ lens. If we are to achieve the 2030 Agenda and leave no one behind, as the UN has reflected in the results captured in the UN Sustainable Development Cooperation Framework, this will require collective action.”