COVID-19 impact on Zim’s informal sector broadens prospects of E-Commerce solutions

By Tafadzwa Muranganwa

Zimbabwe is the third largest informal economy in the world after Bolivia and Georgia, according to renowned economist Dr. Godfrey Kanyenze. The country’s informal sector is mainly driven by women who face a plethora of challenges that have been exacerbated by the Coronavirus-induced lockdown leaving the sector pondering on how to remain aloft.

Covid-19 locks out the Informal Sector

The International Labour Organisations postulates that over 1,5 billion workers in the informal sector were hardest hit by the ravaging Coronavirus.

 ‘Almost 1.6 billion informal economy workers are significantly impacted by the COVID-19 pandemic, leading to a 60 percent decline in their earnings. For those workers, stopping work or working remotely at home is not an option. Staying home means losing their jobs and, for many, it also means losing their livelihoods,” says ILO.

Zimbabwe like any other country in the world has been observing a lockdown as a measure to deal with the deadly novel virus and since March the country’s land borders have been closed.

Cross Border Traders Cry Foul

Most of the informal cross border traders are women who have found themselves in an invidious position as they try to evade customs and security officials since cross border trade has been shut out as land borders continue to be closed until the 1st of next month.

A women rights advocacy organisation, Zimbabwe Women Bureau, claims that most of these female cross border traders are being sexually abused by the customs and security officials.

“ ZWB is greatly concerned at the manner in which government officials have often put the informal cross border traders in compromising positions that abet corruption and implore the chapter 12 Commissions to look into these issues. ZWB members are bemoaning incessant searches by Border Control Authorities well beyond the border zones, hindering free movement, and the incessant soliciting of sexual favours by authorities in various departments at ports of entry,” it stated.

The organisation’s board member Gracia Mashingaidze revealed that 30 percent of its 25 000 members have reported cases of sexual abuse from the aforementioned government officials.

Is E-commerce, a Conceivable Idea for the Informal sector?

A commissioner with the Zimbabwe Gender Commission, Dr Nyepudzai Mercy Nyangulu believes that there is a need for the sector to adopt e-commerce and be an organised lot for it to shrug off the challenges.

“I think the lockdown has presented an opportunity for you(as a sector) to innovate and adopt e-commerce to avoid some of the challenges like sexual harassment which you are encountering.

“You just need to be organised for example you have to make contacts with your suppliers and transporters, purchase your goods and pay digitally ,” she says.

“Even clearance of your goods can’t be an issue once you take this route. ”added the ZGS commissioner.

A paper by United Nations Conference on Trade and Development(UNCTAD), ‘Leveraging digital solutions to seize the potential of informal cross-border trade, shows that there is a greater potential for the sector to digitise because most of the women have access to smartphones.

“Field findings also show that most women traders have a mobile phone, which can open up opportunities to enable them to become financially included.

Innovative technologies like mobile-phone-enabled solutions can expand access to basic financial services. Mobile money, for example, enables individuals to store and transact money in digital form without the need of a bank account,” it says.

Digital ‘Hurdles’ For Zim’s Informal Sector

There are many challenges that keep the generality of players in the informal sector secluded in the digital world among the costs of bank transactions and data , lack of infrastructure, digital security and literacy.

For Takura Mazhingiso,26, he has been indulging in e-commerce for sometime when ordering computer accessories for resale but moans how the high cost of transacting in Zimbabwe.

“I do shop on sites like Amazon and Gear-Up but to be honest with you what puts me off are the costs I incur when transacting. Here the banks are charging us an arm and a leg,” cited Mazhingiso.

For rural-based informal cross border trader, Nyaradzai Mbawa, it is the cost of data and the intermittent mobile network that makes her not bother herself in adopting technology to ease the burden of her crossing to South Africa to buy clothes to sell.

“Data is expensive in Zimbabwe it’s not a secret and if you then try to be sophisticated and purchase goods online then you have to endure an unreliable mobile network,”she claims.

In Zimbabwe, most people in peri-urban and rural areas rely on mobile network operators for the internet since most internet service providers do not service these areas with ADSL and fibre citing less demand .

In its paper , UNCTAD, says mobile money offers the possibility to make payments domestically and across borders but here the recent RBZ restrictions on mobile money transactions are leading many to shy away from using the platforms.

“The daily withdrawal limits imposed by the RBZ have made life miserable for us and we are now back to using cash which then means we can’t adopt e-commerce now ,” retorted Jacob Duri who operates a motor spares shop in Kaguvi street in Harare.

Digital security awareness continues to be lacking especially among women who sometimes have to pander to their husbands’ demands.

“My husband doesn’t want me to put PIN/passwords on my smart-phone because she thinks I will be up to something else,” says a married vendor who requested anonymity.

Rising Trend in Scams Scares Off 

The incidences of many people being scammed through card cloning,mobile and online banking have caused many including those in the informal sector to hesitate to use technologies in transacting.

The UNCTAD speaks about the potential risks that digital services can create, such as data protection issues and over-indebtedness saying there is the need for these to addressed to maintain consumers’ trust and seize the opportunity to expand access to credit.