ZIMBABWE Economics Society vice-president Misheck Ugaro says entrepreneurs cannot flourish in an overregulated market, calling for a conducive environment for them to flourish.
Ugaro made the remarks following last week’s official announcement from the Zimbabwe National Statistics Agency that the informal sector has grown by 16,1 percentage points to 76,1%.
The jump in informalisation is a clear acceleration of economic distress as more businesses flee the formal sector under the weight of taxes, red tape and policy uncertainty.
Speaking during the Employers Confederation of Zimbabwe’s conference held last week, in Kwekwe, Ugaro revealed how hard it was for entrepreneurs.
The conference was held under the theme, Negotiating Resilient Collective Bargaining Agreement.
“Entrepreneurship cannot flourish in an over-regulated economy. The authorities need to improve the ease of doing business. We have recommended, in another forum, what we call a ‘one government contract’ where everything is done at one place,” Ugaro said.
“So, it doesn’t take time. You pay one licence fee, and it covers everything, and that licence fee must not be extended. So, you pay one fee, and you have all your required documents.”
Research conducted by the local fact-checking body, ZimFact, revealed that Zimbabwe has at least 50 taxes. These are based on an analysis of the local tax legislation, such as the Finance Act, Income Tax Act, Customs and Excise Act, Capital Gains Tax Act, Value Added Tax Act, Stamp Duties Act and Revenue Authority Act.
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Despite this, firms must also pay for several obligations to city councils and multiple statutory bodies.
“The point is that if the economy is stable, then we have real entrepreneurs who are in it for being entrepreneurs, not in it as a survival reaction to a bad economy,” Ugaro said.
“So, the whole point is the importance of macroeconomic stability to entrepreneurs is very pronounced and that stability drives confidence in entrepreneurs to want to explore new things.”
He was, however, quick to add that sometimes, in some cases, when the economy was stable, people did not take risks because the market would seemingly be okay.
“But our country is different. Some people are down. I think it’s happening. Right now, it is pushing people to create things,” Ugaro said.
“Except, we do not know, in these people, the portion of people who are creating things. Who is there for business and who is there for survival?
“Which is why I was saying we need to carry out our research because unfortunately in Zimbabwe, that kind of study is not there and the information we are using is international studies from other countries.”
The Zimbabwe Youth Council, in partnership with the government, has facilitated the formalisation of over 9 000 youth enterprises since the onset of the COVID-19 pandemic to tackle youth unemployment.
