Informal sector contributing around 20% of Zimbabwe's GDP

Published: 10 June 2013

The informal sector contributes around 19.5% of Zimbabwe's gross domestic product or a total value added of $1.73 billion.

According to figures from Zimstat the total value added for the informal non-farm activities is $810 million while the value added from households engaged in agriculture is $921.4 million giving a total $1.73 billion.

Zimstat says that about 3.7 million people in Zimbabwe are involved in informal sector activities. The majority of households and people engaged in informal sector activities are in Manicaland province being 18.4% and 18.5% respectively out of the total in Zimbabwe.

In Harare, 9.4% of the households are engaged in informal sector activities while 5.6% of the people in Harare are engaged in informal sector activities. According to the data, more females 54.6% than males 45.4% are employed in the informal sector. The same pattern is however not observed across provinces in Harare where more males 55% compared to females 45% are employed in the informal sector.

Officially launching the Poverty Income Consumption and Expenditure Survey 2011/12 and the Poverty Datum Line Analysis 2011/12, Finance minister Tendai Biti emphasised the importance of data but said the major problems that Zimbabwe was faced with was that its data was not being marketed problem.

He said the surveys were important as they gave an accurate picture of the state of the economy. Biti added the survey should be read together with the Fin Scope Survey (available on request).

Organizing the informal sector and recognizing its role as a profitable activity may contribute to economic development. This can also improve the capacity of informal workers to meet their basic needs by increasing their incomes and strengthening their legal status. This could be achieved by raising government awareness, allowing better access to financing, and fostering the availability of information on the sector.

The survey observes that 31.9% of the adults 18 years and above in the country depend on salaries and wages as their main source of income while the majority of the persons in Zimbabwe (48.4%) state that sale of own agricultural produce is their main source of income.

Poverty also varies significantly among households across provinces and within provinces. Matebeleland North province has the highest percent of households in poverty 81.7% and extreme poverty 36.9%.

Poor households in Zimbabwe are characterised by high dependency ratios and on average, older heads of households are associated with higher prevalence of poverty than younger heads of households. It is highlighted that the prevalence of property among male-headed households are worse off than average, but there is substantial poverty among male-headed households and heterogeneity (non-uniformity) of poverty among female households.
- Financial Express