SMEs work in unsafe and insecure conditions

The razing to the ground of the Glenview sofa complex in an inferno was a dark day for many smes owners who depended on that project for their livelihoods. Many families were affected by this accident. The incident has opened debate on the working conditions and regulation of SMEs

Equipment and property worth thousands of dollars was destroyed. Many people have been trying to make ends meet in the informal sector after thousands of people lost their jobs due to company closures owing to the adverse economic conditions.

An estimated 5, 7 million people are working in the informal sector which is believed to have about 2 million business owners. This contributes a very significant portion of the economy considering that the country’s economy is grounding to a halt.

However the point has been made. The informal sector is very important to the livelihoods of many Zimbabweans at the moment and losses such as this are likely to have ripple effects on many people in the economy including ancillary industries.

To restart a business like this is a mammoth task for those involved. Most of them have no access to finance and cannot recapitalise these businesses unless if the government intervenes by availing funds and equipment to the affected businesses.

Talking to some of the affected entrepreneurs it was clear that some of them did not have insurance cover. They will therefore not be compensated for the losses they incurred through this fire accident. For many of them it is just a matter of starting operations.

This accident must therefore provide a platform for government and other relevant stakeholders to start discussing the ‘formalisation’ or some sort of regulation of the informal sector. As it is, 85% of all SMEs that were part of the study carried out by the World Bank were not registered while only 15 % were registered.

Most of these unregistered businesses are not insured and have very poor safety standards. This fire could have resulted in workers getting killed or being badly injured. Government needs to ensure that the working conditions of smes are safe and appropriate.

The accident has exposed the conditions that SMES are working in. Government needs to urgently ensure that the working space of informal traders is safe. It is also imperative to ensure that small businesses are insured to guard against losses such as this recent one in Glenview.

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