Formalising SMEs step in right direction

The launch of a modern small-to-medium enterprise centre in Bulawayo has put an end to the cat and mouse game between council and informal traders as the country takes giant steps towards formalisation of the informal sector by providing decent premises and services such as water and power.

The centre, which houses 60 micro enterprises, is a model for other local authorities across the country in providing safe workspaces and facilities for the ballooning informal sector, converting these from makeshift operations to proper small businesses.

The centre is testimony that collaboration between local authorities, informal entrepreneurs, the Government and development partners is key in the transition to formalisation of the informal sector.

Speaking at the launch of the centre, Bulawayo mayor Councillor Solomon Mguni, who was represented by Clr Ruzive, said councils can use idle spaces to provide safe and decent workspaces for informal traders.

“Gone are the days when we thought things would happen on their own, we need to change with time,” he said.
“Bulawayo has established a stand-alone informal sector office and equipped staff with soft and hard skills on how to handle these issues.

“Bulawayo municipality ventured into a partnership with the International Labour Organisation on a project dubbed employment promotion and labour market governance to set up the ground for the transition of the informal sector to formality.”

Bulawayo Chamber of SME chairperson, Mr Coustin Ngwenya, said the former operating space for SMEs was not suitable and did not provide conditions to advance the principle of decent work and working environment.

He said Bulawayo municipality and ILO agreed, with the consent of Old Mutual, to refurbish the premises.
“From old looking, plastic, sack, zinc sheet and old metal demarcations we now have the state-of-the-art and technology-equipped working space. We now have enhanced individual and stock security. Thank you very much,” he said.

Bulawayo Metropolitan Minister of State for Provincial Affairs and Devolution Judith Ncube said the centre was of special significance and a clear example of the Government’s thrust of migrating from informal to formal business practice.

“It is also a direct response to the call for the provision of safe and improved work space for accelerated production by entrepreneurs,” she said.

“This milestone achievement is a very remarkable grounding for our economic development towards a middle income economy by the year 2030.”

ILO Country Office for Zimbabwe and Namibia director Hopolang Phororo said the Covid19 pandemic and associated containment measures had aggravated work-related problems.

“The impact has been particularly severe among informal economy workers, women and youth,” she said.

She said the central ambition of the 2030 Sustainable Development Agenda to leave no one behind resonates with the billions of informal economy workers around the world, including in Zimbabwe.

The National Development Strategy (NDS1) focuses on revamping job creation and this will be realised through micro, small and medium enterprises.

“Addressing the decent work deficits in the sector enables informal economy workers to have a chance to escape situations of working poverty,” she said.

“The ILO recognises the potential of the informal sector, and its complexity, which requires processes that take time.
“One of those processes involves promoting higher productivity and better working conditions in the informal economy.

“Over the years, the ILO has observed that the numbers of micro and small enterprises and people working in the informal economy are growing rapidly around the world, and account for the bulk of new employment and for most of the working poor.

“Micro and small enterprises clearly have the potential to contribute to the social and economic progress for workers and their communities. However, many, particularly those in developing and emerging countries, are not achieving this potential.”

Ms Phororo said low wages under poor and unsafe working conditions makes SMEs often fall short, in terms of productivity, competitiveness and market share.

One of the traders, Ms Quietness Mpofu, said the centre provided a spacious and conducive environment for her sewing business.
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“I am able to maintain my clientele and for my clients who cannot reach this place I reach out to them and bring the work here. I am impressed. The rooms are big and comfortable and we also have proper ablution facilities,” she said.

The centre was officially opened by the Deputy Minister of Women’s Affairs, Community, Small and Medium Enterprises Development Jennifer Mhlanga last week.-The Herald