The Governor of the Reserve Bank of Zimbabwe (RBZ) Gideon Gono referred in May 2005 to
the need to move against individuals and “shadow forces…. where the rot needs thorough
cleansing.”38 He referred to the parallel markets as sabotaging his economic turnaround
strategy, adding:
We enjoy the support of all the law enforcement arms of the State and Government
itself to win the battle against indiscipline, corruption, illegality and the sheer madness
that we have been witnessing on the streets, at airports and border posts… 39
The informal sector and parallel markets were estimated in June 2005 to control around 60%
of GDP, and this money was not passing through the Reserve Bank or the tax department.40
The government’s response was to try and seize control of the sector:
Crooks, greedy people, opportunists and black market traders in foreign currency, fuel
and basic commodities had found convenient operational bases in the informal sector.
The obscene feast is over. Law and order must now prevail.41
Photo 4: OM resulted in total destruction of licensed vending malls around Zimbabwe
[Harare, May 2005]
3.
The growth of the informal economy: 1990s to 2005
The factors that led to the increasing informalisation of the Zimbabwean economy had their
roots in the early 1990s. By 1990, ILO already estimated that as little as 25% of the labour
force was employed in the formal sector, and by 1991, there were 200,000 school leavers and
only 20,000 new formal sector jobs per year.42 ESAP, introduced in 1991, liberalised the
economy by deregulating the labour market and introducing monetary reform, among other
measures. However, it failed to result in notable growth of the formal sector, contrary to
38 RBZ Report, 20 May 2005; paragraphs 2.17 – 2.31
39 ibid, para 2.31
40 The Financial Gazette, June 9‐15, 2005: “Political Backlash or genuine clean‐up?”
41 The Chronicle, 12 June 2005: Comment; “Parliament has serious business”.
42 UNDP,
Working Paper 9 (2010); op cit, pages 17-20.
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