Business Times Africa Magazine 2017 /vol 9/ No2 BT2Edition2017_web | Page 49

KEEPING ZIMBABWE AFLOAT: TRADING ON THE STREETS AND OFF THE BOOKS
the thriving informal economy of
street vendors, traders and others
unrepresented in official statistics
helps keep the country afloat. For
the government of President Robert
Mugabe, that parallel economy is
both a source of stability — and a
potential challenge.
Once one of Africa’s most advanced
economies, Zimbabwe has rapidly
deindustrialized and shed formal
wage-paying jobs, forcing millions
like Mr. Chitiyo to hustle on the streets
in cities and towns.
From 2011 to 2014, the percentage
of Zimbabweans scrambling to make
a living in the informal economy
shot up to an astonishing 95 percent
of the work force from 84 percent,
according to the government. And
of that small number of salaried
workers, about half are employed by
the government, including patronage
beneficiaries with few real duties.
Many more people are joining Mr.
Chitiyo on Harare’s streets as the
formal economy shows few signs of
improvement. An acute cash shortage
persists despite the introduction of
a surrogate currency in November.
The government, unable to pay its
workers their Christmas bonuses,
has offered them land instead. And
despite repeated visits to Washington
and European capitals, and promises
of political and economic reforms,
Zimbabwean officials have failed
to secure fresh loans from skeptical
international lenders.
“The government is moving into an
increasingly untenable situation, and
they are in desperate need of a bailout
in the billions to restore liquidity in
the country,” said John Robertson, an
independent economist in Harare.
“The formal sector has collapsed. The
informal sector is now very much
bigger, and it is actually keeping alive
a very much higher percentage of the
population.”
As long lines keep forming outside
banks, the continuing decline of the
formal economy has raised fears of
a repeat of the 2008 hyperinflation
crisis, which was fueled by the
unrestrained printing of the old
Zimbabwean dollar, including a $1