The issue of vendors has sucked in many politicians including the Vice President Phelekezela Mphoko and Local Government Minister Ignatius Chombo ordering that vendors be removed from the streets of Harare. The matter has been reduced to issues of hygiene while conveniently forgetting the livelihood question which is at the centre of increased vending in the country.
However the First Lady Grace Mugabe has come out guns blazing defending vendors warning the police against harassing these vendors. Morgan Tsvangirai of the Opposition MDC-T has said government has failed to create employment hence the high numbers of vendors. The vendors themselves have vowed to stay put and defend their ground.
The issue has divided the nation with some arguing that the government must not remove vendors from the streets without creating alternative employment for them. Others are of the view that the government is hypocritical claiming to support the informal sector through its ZIMASSET programme while at the same time seeking to remove the vendors from the streets. It is estimated that the informal sector employs 8 00 000 people and an estimated $7 billion is believed to be circulating in the informal economy.
Vending has been at the centre of the countries recognised ‘blue chip’ companies such as Econet, Delta and Dairiboard.The business models of these successful companies have hinged upon innovative aggressive vending.
When all other telecom companies were using the contract system, Econet introduced the prepaid system whose foundations were based on a robust vending system. The company realised that it could make more sales and cut costs by making ordinary people distributors of its products. It has reaped its rewards and this success has trickled down to the entire economy through creation of jobs and remittances of taxes to the state.
Dairiboard and Delta have always relied on a robust vending system to sell its products. We grew up seeing ice cream and milk being sold in carts in the townships by vendors. When the economy was better, Delta even introduced automated vending machines at strategic locations to boost their sales. This model has continued and has reaped rewards for these companies who are among some of the most profitable companies in the country.
It is therefore not surprising to see why the First lady sees a lot of sense in allowing vendors to continue on the streets. These vendors push volumes of products on behalf of manufacturers and producers at very little cost. Gushungo Dairies is a major beneficiary of vending. Apart from playing her motherly role in protecting these vendors, the first lady is also acting out of self interest knowing exactly what works for her business.
Many business models today, including banking now rely on a strong network of vendors. Money transfer for example has grown from leaps and bounds through various vending networks. Electricity is following the same way. The media has long relied on vendors to sell newspaper copies and this has worked wonders for the industry.
Entertainment services and products have also been largely reduced to being distributed through vending as DVDs and CDs are increasingly more accessible on the streets. This is one area where vending has wrecked havoc but effective and appropriate regulation could reap rewards in the sector. Farmers relied on vendors over time to distribute their produce. Mbare Musika has always been a hive of activity for fresh produce as farmers jostled for the markets in the busy townships.
On the other hand vending harms businesses of retailers such as Choppies, TM and OK. These vendors often sell similar products just outside the premises of these established retail shops. It becomes clearer to understand why VP Mphoko views these vendors as a plague to be exterminated having been chairman of Choppies prior to his appointment as Vice President.
Vending, if it spirals out of control can harm formal registered business that pay tax to the fiscus and harm the greater economy. The 20000 vendors that face eviction from the streets do not pay tax to the revenue authority but their operations are suffocating bigger retailers that pay VAT and other taxes to the revenue authority.
We need to take lessons from those companies that have used the vending model so effectively creating jobs and money for the government in the process.
When it has been controlled and regulated efficiently vending has had a huge economic impact on the lives of many Zimbabweans. It has created employment for many people. Big companies for example register their vendors and this allows the vendors to tap into many other benefits and be protected by the law.
Registering vendors has also allowed the revenue authority to track them in the past and ensure they are paying their taxes. The Mobile Money Transfer Association for example has about 3000 registered vendors who can easily be tracked down. Whether vending becomes a national problem or a panacea for some of the economic problems the country is facing depends on the polices that the government formulates and passes on vending.
Zimbabwean vending has been massively politicised with lucrative vending spots being controlled by powerful political players who lease these out to their political subjects. This has introduced disorder and impunity into vending transforming the trade into a conduit of illegal or smuggled goods.
Land barons collect rent from vendors and often overcrowd the vending sites to ensure they maximise on their profits. They subdivide areas allocated by the local authorities lease out the place to more vendors it can support. This explains the infrastructural decay and other ills currently being blamed on vending.
If the government is serious about restoring order in vending, it must deal with those politicking the trade and sowing chaos in the process. Relevant strictures of government and stakeholders must come together to craft policies that benefit both the vendors and the greater economy. Vending has the potential to transform the national economy.