Bindura Universirty of Science Education Faculty

BINDURA UNIVERSIRTY OF SCIENCE EDUCATION

FACULTY OF SCIENCE EDUCATION

INVESTIGATING THE INFORMAL SECTOR AS A LIVELIHOOD STRATEGY FOR THE PEOPLE AT ESIGODINI BETWEEN 2010-2015

KWASHIRA CAIN

(B1234540)

SUPERVISOR: MR MISHECK MHISHI

A DISSERTATION SUBMITTED TO BINDURA UNIVERSITY OF SCIENCE EDUCATION IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE BACHELOR OF SCIENCE EDUCATION HONOUORS DEGREE- GEOGRAPHY

APRIL 2016

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I, Kwashira Cain declare that this research project is my original work and that it has not been submitted to this or other university in support of my application for a degree or any other qualification. Signed ______Date ______Witness ______Date ______Supervisor I, ______declare that I have supervised this research and I am satisfied that it can be submitted to faculty of Science Education Bindura University of Science Education

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NAME OF AUTHOR: KWASHIRA CAIN

TITLE OF THE PROJECT : Investigating the informal sector as a livelihood strategy for the people at Esigodini between 2010-2015

DEGREE PROGRAMME: Bachelor of Science Education Honours Degree- geography

YEAR THIS DEGREE WAS GRANTED :

Permission is hereby granted to Bindura University of Science Education library to produce single copies of this project and lend or sell such copies for private, scholarly or scientific research purposes only. The author does not reserve other publication rights and the project nor may extensive extracts from it be printed or otherwise produced without the author’s permission.

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BINDURA UNIVERSITY OF SCIENCE EDUCATION

The undersigned certify that they have read and recommended to Bindura University of Science Education for acceptance of research project entitled: Investigating the informal sector as a livelihood strategy for the people at Esigodini between 2010-2015. Submitted by Kwashira Cain. In partial fulfilment of the requirement for a Bachelor of Science Education Honours Degreee- Geography.

Supervisor: Mr Misheck Mhishi

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External Examine External Examiner

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DEDICATION

To my Lord Jesus Christ who gave me the strength to carry out the research and to my wife Azalea Kwashira and my son Caleb T Kwashira and my mother, brother who gave me the time and their support to work on this research project.

ACKNOWLEDGEMENTS

My sincere gratitude go to my supervisor Mr M Mhishi who equipped me with the knowledge in research and for spending his valuable time guiding me in the in the process of pursuing my research. Most sincere thanks go to my wife for financial support and moral support and the informal sector operators for their cooperation during the time of collecting data.

ABSTRACT The purpose of this study was to investigate the informal sector as a survival strategy at Esigodini in Umzingwane District. Sixty Esigodini informal traders constituted the sampled population of the informal sector traders who were given questionnaires and interviewed by the researcher. Only 31% of participants responded to the questionnaire where the following findings were made, that the majority of informal traders were relying on their informal trading activities as a source of livelihood

TABLE OF CONTENTS

Cover page………………………………………………………………………………….i

Declaration…………………………………………………………………………………ii

Release form……………………………………………………………………………….iii

Approval form……………………………………………………………………………...iv

Declaration…………………………………………………………………………………v

Acknowledgement………………………………………………………………………....vi

Abstract…………………………………………………………………………………….vii

Table of contents…………………………………………………………………………...viii

List of tables………………………………………………………………………………...ix

List of figures……………………………………………………………………………….x

List of appendices………………………………………………………………………...…xi

TABLE OF CONTENTS

1.0 Introduction……………………………………………………………………………..1

1.1 Background of the study………………………………………………………..1

1.2 Statement of the problem………………………………………………………..2

1.3 Rationale /Justification of the study……………………………………………….2 1.40 Research Questions…………………………………………………………….3

1.41 Main question…………………………………………………………………..3

1.42 Sub-research questions ………………………………………………………...3

1.5 Aims/General Objectives…………………………………………………….…....3 1.51 Specific Objectives……………………………………………………………....3 1.6 Significance of the study………………………………………………………..4

1.7 Assumptions of the study…………………………………………………….....4

1.8 Delimitation of the study……………………………………………………...... 4

1.9 Limitations of the study…………………………………………………………4

1.10 Definition of Terms………………………………………………………...5

1.11 Informal ……………………………………………………………………....5

1.12 Informal sector ………………………………………………………………...5

1.13 Livelihood…………………………………………………………………….....5 1.14 Strategy………………………………………………………………………...5

1.15 Flea market…………………………………………………………………….5

1.16 Gold panning…………………………………………………………………..5

1.17 Fast food out lets………………………………………………………………5

2.0 Literature Review

3: Research Methodology………………………….……………………………………..13 3.1 Population……………………………………………………………………..13 3.2 Sampling……………………………………………………………………….14 3.3 Questionnaires…………………………………………………………………14 3.4 Data Collection Methods and Procedures…………………………………….15 3.5 Interviews……………………………………………………………………...15 3.6 Data collection procedure ……………………………………………………..15 3.7 Data Analysis ……………………………………………………………….....16 4. Research Findings………………………………………………………………..………17

4.1 Data presentation and analysis…………………………………………...... 17

4.2 Response rate …………………………………………………………………….17

4.3 Demographic details……………………………………………………...... 18

4.3.1 Respondents’ gender ……………………………………………...... 18,19

4.3.2 Age.…………………………………………………………………..……....20

4.4 Respondents highest level of education ……………………………………….21

4.5 How long respondents have been in the sector ………………………………..23

4.6 Respondents average monthly income range ………………………………….24

4.7 Respondents average profit per month…………………………………...... 25

4.8 Whether respondents keep business record on purchase……………………….26

4.9 Whether keep business records on sales………………………………………..27

4.10 Where respondents get stock…………………………………………...... 28

4.11 Benefits of informal sector to respondents family…………………………….29

4.12 Whether the informal sector is respondents’ sole source of income…………..30

4.13 Whether informal sector business is registered………………….….……..31,32

5.0. Summary, Conclusions and Recommendations…………………………………….34

5.1. Summary……………………………………………………………………...34

5.2. Conclusions……………………………………………………………...... 35

5.3. Recommendations…………………………………………………………….35

5.4. Suggestions for future research……………………………………………….36

LIST OF TABLES

Table 4.13 Whether informal sector business is registered..……………………………….31

LIST OF FIGURES

Figure 1 Age range…………..……………………………………………………19

Figure 2 Level of education………………………………………………………..21

Figure 3 Time in the informal sector…………….………………………….…..…22

Figure 4 The average income received per month……………………………..…..24

Figure 5 Profit per month………………………………………………….…..…..25

Figure 6 Do you keep records of business…………...... 26

Figure 7 Where respondents get their stock…………………….……………….....28

Figure 8 Benefits of the informal sector……………….………………....………..29

Figure 9 Informal sector as a sole source of income….…………….………..……30

Figure 10 Is the informal sector business registered……………………………...31

CHAPTER 1: INTRODUCTION

1.0 Introduction

This chapter describes the background of the study, statement of the problem, rationale or justification of the study, research questions or hypothesises aims or general objectives, specific objectives as well as definition of related terms.

1.1 Background of the study

The Zimbabwean economy has undergone significant structural transformation in the last decade that has inevitably forced the growth of informal sector. An increasing number of the active labour force is being absorbed in the informal sector. It has been noted that informal sector plays a crucial role in the livelihood of people in Zimbabwe as it helps to nimprove the standard of living of people. The researcher noticed that people in Esigodini rely mostly in informal sector. The sector is unstructured and can come in any form. For example, it can cover the (i) sale of cooked and uncooked foods which reflects the dominance of agriculture in the economy; (ii) service sector which includes barber shops, general stores (or kiosks), open-air garages and sale of used clothing; and (iii) the manufacturing of wood and metal products notably furniture and related household metal- based good.

People at Esigodini view the informal sector as the major potential source of entrepreneurship, hence a source of income for both the uneducated/educated and unskilled/skilled. This study explores the informal sector as a livelihood strategy in the lives for the people of Esigodini and attempts to suggest ways of making this sector an even better source of income for them. Through the study, an attempt will be made to prove that the promotion of the informal sector activities or at least the elimination of regulations and stifling restrictions could open up a source of income which people can use as a panacea to poverty and unemployment. The challenges the people in informal sector faces are confiscation of their wares by the rural district council officers, Zimbabwe Republic Police, shortage electricity and lack of support of the government. According to Harper (1984), one of the most viable sectors perceived by many as significant towards improving the livelihoods of the poor majority is the informal sector, especially since it can provide business opportunities to the skilled/unskilled and educated/uneducated thereby bringing them income? In addition, there is a rapid increase of informal sector in Zimbabwe’s urban

and rural areas. To appreciate the pivotal role of the informal sector, Hallberg (2000) states the view that a nation with a large number of small firms has a strong foundation for future development because as its economy matures, some of these small firms join the formal sector and become large and competitive enterprises. Based on this argument, informal sector development is important to the Less Economically Developed country (LEDCs)’s growth otherwise it will remain dependent on Multi-National Companies (MNCs).

The study wants to find out why the people at Esigodini, Habane T/ship are now into informal sector.

1.2 Statement of the problem

Informal sector is facing a lot of challenges mainly because they do not have assistance from the government, Non- Governmental Organizations (NGOs) and the private sector. Many people in Esigodini are unemployed, so many of them were retrenched and left without jobs. This prompted the researcher to carry out a study to assess whether the informal sector acts as a livelihood strategy for the people of Esigodini basing the research at Habane T/ship. In addition, the study will assess the benefits and causes of the informal sector.

1.3 Rationale /Justification of the study.

The researcher chooses to carry out a research so as to find out the role of the informal sector as a livelihood strategy for the people of Esigodini in Umzingwane district. The study should shed light in the challenges, the benefits of each sector, and causes of the growth of the informal sector and identify the different activities of informal sector. The study will also help bring an awareness within the district to the way forward of the informal sector and the ways to improve the informal sector and its activities. This will help to work towards alleviating problems by people in informal sector show the benefits of the informal sector as a livelihood strategy for the people at Esigodini. It will bring an answer to some questions regarding to the myth that the stakeholders have against the informal sector in a way improving the way the people in informal sector operates. The study will bring lasting solutions towards .

1.40 Research Questions.

1.41 Main question

What could be the theoretical frameworks and research models related to informal sector factors that lead to the growth of the informal sector.

1.42 Sub-research questions

1. To what extent do people benefit from the informal sector?

2. What are the challenges faced by the people in informal sector as a livelihood strategy?

3. How does the informal sector as survival strategy be a benefit to the people at Esigodini?

4. What should be done to improve the informal sector business operations?

1.5 Aims/General Objectives.

The main objective is to investigate the role of the informal sector in the livelihood of people of Esigodini.

In achieving the afore-mentioned general research objectives, the- specific research objectives for this study are to:

Describe the different forms of the informal business at Esigodini?

Identify the survival strategies of people at Esigodini?

Describe how the informal sector is of benefit to the people of Esigodini?

Identify the challenges faced by the people in informal business at Esigodini?

1.6 SIGNIFICANCE OF THE STUDY

The study will be of benefits to the people of Esigodini, to the government and to the stakeholders as the study shows that people benefit from the informal sector. The study will identify ways to improve the way the informal sector operators do their business. The study would further reveal the problems faced by the informal sector operators.

1.7 ASSUMPTIONS OF THE STUDY

The researcher had assumptions that all the selected people would provide the researcher with all necessary information about the research topic.

1.8 DELIMITATION OF THE STUDY

The study is confined to informal sector operators at Habane Township in Esigodini in Umzingwane District. Esigodini, is under Matatebeleland South in Umzingwane district. The name is derived from the fact that the place is on a low lying area thus the name Esigodini. The district town is located about 45 km from Bulawayo South East Bulawayo, along the Bulawayo-Beitbridge highway

1.9 LIMITATIONS OF THE STUDY

The study is carried out at Habane T/ship in Esigodini. The researcher is likely to face problems that come from unwillingness to disclose information on the informal sector. The respondents may give false information as they are ashamed that they are informal sector operators. The researcher might also face problems of hostility from informal sector operators as they will be afraid to be arrested. It is therefore a possibility that the results collected may not reflect a true picture of the prevailing situation in all the Umzingwane District.

1.10 Definition of Terms

1.11 Informal

Informal means not following strick rules of how to behave or doing things / non adherence to the norms and values.

1.12 Informal sector

Seshamani (1990) defines the informal sector as a sector comprised of all those activities which generate incomes that go unrecorded in the formal accounts of the national economy. The informal sector is part of an economy that is neither taxed, nor monitored by any form of government. In this research the informal sector is any activity which is practiced by people in order to earn a living without paying tax to the government.

1.13 Livelihood

Livelihood refers to the means, activities and entitlements by which people make an adequate living for themselves. Seshamani (1997) Thus livelihood means set of activities, involving

securing water, food, fodder, medicine, shelter, clothing and the capacity to acquire above necessities working either individually or as a group by using endowments both human and material for meeting the requirements of the self and his/her household needs.

1.14 Strategy

Strategy generally involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). This is generally tasked with determining strategy.

1.15 Flea market

A market, often outdoors consisting of a number of individual stalls selling new, old or used cloth.

1.16 Gold panning

Mining valuable minerals from places by washing or dredging

1.17 Fast food out lets

Are stands or kiosk which provide no shelter or seating but produce mass food that is prepared and served very quickly.

SUMMARY

The chapter dealt with the introduction, background to the study, delimitations, and limitations to the study, objectives and definition of terms. The next chapter will look at literature review.

CHAPTER 2: LITERATURE REVIEW

CONCEPTUAL FRAMEWORK

Hart (1971), states that Hart was the first to introduce the concept of the ‘informal sector’ as a part of the urban labour force, which takes place outside of the formal labour market. This was used to refer to ways of making a living outside the formal wage economy, either as an alternative to it, or as a means of supplementing income earned with it. (Bromley et al 1979). In addition, Hart (1973) distinguished formal and informal income opportunities on the basis of whether the activity entailed wage or self-employment, implying that wage-earning employment is a characteristic of the formal sector only. Even though Hart’s original notion of the ‘informal sector’ is limited to the ‘self-employed’, the introduction of the concept was able to absorb activities that were previously ignored in academically models of development and in national economic accounts. (Swaminathan (1991). This study will review Hart’s principle on the informal sector and relate it to what is happening in the Zimbabwean situation.

In spite of the early work by Hart, the pioneering research on the informal sector is widely considered to be the report of the International Labour Office on employment in Kenya (ILO, 2011). Informality in this study is mainly characterized by the dodging of government regulations and taxes. Initially, ILO considered the main aim of the informal sector to be the provision of subsistence to families. It related the growth of the informal sector to its positive effects on the labour market and the distribution of income. After this preliminary study, ILO carried out numerous research studies on the informal sector, bringing new developments to the field every time. One of these new developments was the recognition of a new aspect of the informal sector, which is its dynamic nature and potential for economic growth and employment. Initiated by the well-known research by Soto (1989) and followed by many others, the conceptualization of the informal sector took yet another meaning. This new course of research studied the informal sector in a regulatory framework. In this approach, the legal status is the main element distinguishing informal from formal activities. It relates the emergence of the informal sector to the policies applied. It suggests, therefore, the deregulation of the market and the almost complete abolition of State intervention in the informal sector activities.

It should be acknowledged that the success and effectiveness of informal trading is not automatic and does not depend solely on the informal enterprises themselves. The

opportunities for development of these enterprises and for them to fulfil their roles in the transitional economies and provide employment opportunities for the less educated and those who are educated especially in Zimbabwe where unemployment and closure of industries is high and formally unemployed thereby providing them with income. These contributions that the informal sector has to nations show that the poverty circle can be escaped and a faster rate of economic growth and development achieved especially if these informal businesses are supported. As a result, enhancing the productivity of informal traders and making them competitive is vital as it absorbs the job-seeking and able-bodied people who are able to work thereby increasing national output and speeding up economic development. Successful informal sector absorbs not only a significant part of the unemployed labour force, but also reduce crime rate and government expenditure on security and legal services as more people would be earning income and not depending on crime street begging and prostitution. Yet the government of Zimbabwe should work to improve success of its informal sector, the country will remain burdened with a huge unemployment problem and, therefore excessive crime in its various forms.

Furthermore, creating and supporting this informal sector is one of the most promising means of progressively redistributing the ownership of productive assets since these informal businesses have the potential to be an engine for black economic empowerment. It is clear from the results discussed above that the sector has had a meaningful impact in the lives of various households in Esigodini. If the informal sector, as demonstrated through this study, can allow people to earn a living and getting profits without committing any crime or infringing the rights of other citizens, then it is safe to conclude that the sector presents an alternative avenue for the unemployed to escape of poverty. Given all the above-stated economic contributions that the informal sector brings to countries, one can safely conclude that any less economically developing country and even developed country needs the informal sector to help boost its economy as this sector is the biggest source of low cost employment, helps in regional and local development, responds to market fluctuations more easily, helps achieve fair and equitable distribution of wealth and also the sector is the key driver for value- added exports. With the right support and favourable trading conditions, some of these small businesses can become large enterprises hence their development is imperative to a country’s growth otherwise remain dependent on the formal sector which has failed to absorb a great number of the population. Thus, the factors constraining the informal sector from growing should not be overlooked. Some of these challenges include shortage of

water and electricity; lack of information; unavailability of credit facilitates; storage problems and so on.

From the three scholars analysed in this study the researcher will focus on the informal sector as that in which people who practice it dodging the authorities, do not pay taxes and those who practice it are both the educated and uneducated due to the economy problems in Zimbabwe at the moment. Who are trying to earn a living from it and feed their families?

CHARACTERISTICS OF THE INFORMAL SECTOR

CAUSES OF THE INFORMAL SECTOR

PROBLEMS FACED BY THE INFORMAL SECTOR

Many informal sector operators encounter difficulties in the places where they operate. The challenges are many and vary according to the place where they operate. In addition, the informal sector is a very mixed and heterogeneous sector operating in a number of fields and providing goods and services at low cost and within the reach of the consumers, it comes with so many problems. Mupedziswa (1991) asserts that most of these problems originate from their small size which limits them from benefiting in a number of ways such as economies of scale and even lack of collateral security for them to borrow loans from the banks. Some researchers such as Dube (2013) the problems faced by the informal sector operators are not only the size of the place but also economically, socially and envronmental

POVERTY ALLEVIATION

Poverty is defined by Brandt (1998) as an economic condition of lacking both money and basic necessities needed to successfully live. These basic necessities include food, water, education, and shelter. The biggest challenge in accessing these necessities is that they all have a financial tag and this usually results in the exclusion of those without money from accessing them. In other words, one of the biggest causes of poverty can be said to be unemployment. With the informal sector proving to create jobs at such a promising rapid pace, then it should follow that poverty should be alleviated too as the previously unemployed can engage in this sector and earn some income that can afford them at least some of the basic necessities, if not all (Dhemba, 1999). Thus, informal sector development is

an essential strategy for reducing poverty as it promotes and empowers even the poor, women uneducated and educated so that they can escape malnutrition, hunger, and diseases by joining the informal sector.

Job creation

According to Dube 2013 the informal sector in Zimbabwe has been growing fast on the back of declining formal economic activities and has become the largest employer as the economy is failing to absorb many job seekers into formal employment. In addition, the informal sector is viewed as the driving force in Gross Domestic Product (GDP) emanating from the fact that it growing at a faster rate and gives even the skilled/unskilled and illiterate/educated a chance to earn an income. This may make the informal sector to be one of the leading sectors in job creation. Most of the informal sector, do not register so as to avoid paying taxes, but if they were all to register and their output captured in the government records, then their true contribution to GDP would be seen to be higher than is currently predicted. In addition, if this sector is promoted and given more support, these will contribution high in job creation and GDP.

PROMOTION OF THE INFORMAL SECTOR BY THE GOVERNMENT

Faced with declining vision for formal employment, and increasing urban poverty the majority of Zimbabwean people entered into the informal sector, selling a wide range of goods from vegetables to backyard manufacturing supporting of thousands of people. The government of Zimbabwe reacted by put in place legislation to promote the informal sector through Statutory Instrument 216 of 1994 which amended the Regional Town and Country Planning Act {Regional, Town and Country Planning Act (Chapter 29:12)}, thus allowing for the development of non-residential activities in residential areas commonly known as of home industries. This saw the flourishing of informal activities such as hairdressing, tailoring, book-binding, wood or stone carving as well as welding and carpentry in urban areas. Before this statutory instrument the local authorities controlled the enterprises activities in residential areas. (Dube 2013)

In addition, in the year 2010 the government of Zimbabwe passed the Indigenization and Economic Empowerment Act (Chapter 14:33), which among other things promoted the growth indigenous entrepreneurs/ small to medium enterprises reserving certain sectors of the economy to indigenous people, especially the retail sector which is mainly dominated by

the informal sector. The act was legislated to empowered people in the informal sector so as to get a look of profit of the sector.

The chapter discussed literature review, conceptual frame, characteristics of the informal sector, challenges faced by the people in the informal sector, benefits of the informal sector. Next chapter will discuss research instruments, research paradigm, data collection procedure

CHAPTER 3: METHODS AND MATERIALS.

Introduction

This chapter discusses the research design, data collection methods and procedures, data analysis procedures and the study area. Research Paradigm The research used both qualitative and quantitative research design. Qualitative research design involves identification of the problem and generalization of the results and quantitative involves statistical data. Descriptive survey was used to explore the informal sector as a livelihood strategy at Esigodini at Habane T/ship in Umzingwane District. According to Locust (1984) qualitative research studies are designed to obtain information concerning the facts discussed. This type of research design does not need a strict design plan before it begins. This gives the researcher freedom to let the study unfold more naturally. This makes the researcher gain more detailed and rich data in the form of comprehensive written descriptions or visual evidence. This type of research looks at context and social meaning and how it affects individuals hence the choice of the design.

Quantitative research design allows the researcher to measure and analyze data. The relationship between an independent and dependent variable is studied in detail. This is advantageous because the researcher is more objective about findings of the research. It can also be used to test hypotheses in experiments because of its ability to measure data using statistics (Burns 2000). RESEARCH INSTRUMENT

The researcher prepared thirty questionnaires which were administered to the informal sector operators. According to Leedy (1980) a questionnaire is a written set of questions that can be mailed or passed to subjects. The questionnaire which were administered to the groups of informal sector operators. The sequence of the question is easy to follow that the respondents felt as they are talking to the researcher. This method allows free interaction between the researcher and the informal sector operators. The researcher also prepared structured interview guide for interviewing the informal sector operators. The questionnaires were administered by the researcher.

POPULATION At Habane t/ship there are many people in the informal sector the target population is 300 people in this business. Hence the researcher randomly selected sixty (60) informal sector operators from Habane t/ship. SAMPLING Esigodini (Habane T/ship) has fruit and vegetable vendors, flea markets, mechanics, gold panners and hair salons / barber shops on the, pavements or in the well-built places. These are the components of informal sector and the focus of this study. The researcher used random sampling. Random sampling ensures that each unit in the population has equal chance of being included into the sample. The researcher used systematic sampling to choose the informal sector operators. sixty informal sector operators were grouped alphabetically. The names of the operators were rested on the multiples of three were chosen from Habane t/ship. Selection managed to cater of groups of people in the informal sector. This enhanced to establish a representative population that managed to show reasons for joining the informal sector, challenges faced, benefits obtained from the informal sector. The respondents were chosen by using token picking system. The sample size is 300 people in the informal sector yet the target group is 60 informal sector operators. Data Collection Methods and Procedures

Questionnaires To collect the information from the informal sector questionnaires were personally administered to the respondents. Karlinger (1973) states that questionnaire elicits information on appropriate area to which respondents respond objectively. There was one questionnaire for the study for informal sector. It consisted of four sections. The first section required personal information in which the people in the informal sector business fill in information such as academic qualification, professional qualification, and experience. The second section consisted of other information that includes the challenges or problems the people in the informal sector face. The third section mainly covered the benefits of each sector, causes of the growth of the informal sector. The last section covered the different activities practiced in the informal sector.

Interviews

According to Connely and Clandinin, (1990) personal interview method requires a person known as interviewer asking questions generally on a face to face contact to other person or persons from the sources concerned. Focused interview is meant to focus attention on the given experience of the respondent and its effect. Under it the interviewer has the freedom to decide the manner and sequence in which the questions would be asked and also has the freedom to explore reasons and motives. The main task of interviewer in case of a focused interview is to confine the respondent to a discussion of issues with which he seeks conversance. More information that is in greater depth can be obtained. Interviewer by his own skill can overcome the resistance, of the respondents; the interview method can be made to yield an almost perfect sample of the general population. There is greater flexibility under this method as the opportunity to restructure questions is always there, especially in case of unstructured interviews.

The interviews were conducted. The people in the informal sector were interviewed on how they carry out their activities, the problems that they encounter and the benefits they get the informal sector. Again, during interviews additional data was captured from non-verbal responses such as facial expressions and gestures.

Data collection procedure

The researcher sought permission from the Rural District Council office through the two wards counsellors at Esigodini to collect information concerning the informal sector over the last three years as well as other related challenges that affect the informal sector. . One questionnaire was constructed for the Fast food, Flea market, Furniture Manufactures, Hair Saloon, Motor repair and Gold panning representatives in Esigodini. A total of 60 questionnaires were administered to the six categories of respondents, that is 10 Fast food operatives, 10 Flea market operatives, 10 Furniture manufactures, 10 Hair Saloon operators, 10 Motor repairs operators, 10 Gold panners. The questionnaire had a total of 16 closed ended questions, this was done to encourage respondents to participate as too many questions or open ended questions would have negatively affected the response rate. The data was then

collected and tabulated into the statistical program excel following which the results were first tallied and then presented in tables, bar charts and pie charts. Furthermore cross tabulations were employed to search for different relationships between the various variables. It is only after the filling of the questionnaires that the researcher went around different places at Habane t/ship collecting them back. As for the interviews the people in the informal sector were interviewed in different times during the collection of questionnaires. The response was relatively high which enable the researcher to collect enough information representing the total people in the informal sector.

Data Analysis The response from the respondents was high as expected. The sample had thirty (30) respondents who were categorized into six different groups, namely: street food vendors, mechanics, hair-dressing (salons and barber shops), mobile phone shops, gold panning and lastly, flea markets and jewellery. The data which was collected was presented using tables, graphs and pie charts. Conclusions were drawn from the information obtained from the respondents’ perceptions, feeling and beliefs to establish factors which forced people into the informal sector, challenges they come across and to identify if the informal sector acts as a livelihood strategy for people of Esigodini.

Figure 1 Esigodini map showing the area under study

Summary The chapter looked at research paradigm, research tools, data analysis, data collection procedure, population and sampling. The next chapter will look at data presentation and analysis.

CHAPTER FOUR DATA PRESENTATION AND ANALYSIS

4.1 Introduction This chapter presents the results of the study from the questionnaires which were circulated by the researcher. In addition, cross tabulations were employed to search for different relationships between the various variables.

Response rate The representatives were asked which category they represented and this was to establish the response rate. Figure 4.1 response rate

Pie chart fig 4.1 above shows that while 60 questionnaires were distributed to Fast food operators (10), Flea market operators (10) furniture manufacture (10), Hair saloon operators (10), Motor repair operators (10) and Gold panners (10) the following responses were received from the various categories; 6 (10%) responses were received from the Fast food operators, 5 (8.3%) responses were received from Flea market operators, 8 (13%) responses were received from Furniture manufacturers, 0 (0%) responses were received from Hair saloon operators, 0 (0%) responses were received from Motor mechanics and 0 (0%) responses were received from Gold panners which brings the overall response rate to 32%, a significant figure, particularly where the respondents were spread over a fairly diversified

target group, as was the case with respondents in this case. Those who did not response during data collect such gold panning the researcher felt that they were ignorant in the sense that they mistook the researcher as a ranger who wanted to arrest them. Figure 4.1 shows that, there was a 60% response rate for Fast food operators, 50% response rate for Flea market operators, 80% response rate for Furniture manufactures, 0% response rate for Hair salon operators, 0% response rate Motor mechanics, and 0% response rate for Gold panners. The above statistics tend to reveal that Furniture manufactures were the most enthusiastic in participating in this survey, more so with an 80% response rate.

4.3 SECTION A: DEMOGRAPHIC AND SOCIO-ECONOMIC DETAILS OF THE RESPONDENTS

In this section the demographic details of the respondents, gender, monthly income and educational qualifications is going to be presented and discussed. Frequency tables are used in analyzing the data gathered from the respondents. It is also the researcher’s view that the personal details of the respondents would be important to establish so as to make sure he was gathering data from the correct respondents, this would help to enhance the reliability of the data and the research project as the correct respondents would have the most appropriate answers for this study.

4.3.1 Respondents’ gender The respondents’ were asked about their gender as shown on the bar graph in fig 4.1 below.

Figure 4.2 Respondents’ gender Fig 4.1 above shows that 66.7% of respondents from among the Fast food operators category were male while 68% of respondents from the same category were female. Secondly, 40% respondents from the Flea market operators’ category were male, and 60% operators from the same category who were female. As for the respondents in the Hair saloon operators’ category 62% of respondents were male and 38% of respondents were female. The above data reveals that there were more female Fast food operators and Flea market operators who participated in the survey than male. In the Hair salon operators more males participated in the survey than females.

4.3.2 Age

Figure 4.3 age A cross-tabulation on the bar graph in fig 4.3 above shows that 73% of respondents from across all three categories were in the 26 to 45 year age group. Yet, 21% of respondents from all three categories who were aged over 45 years. In addition, 16.% of respondents from the three categories were in the under 25 year age group. And 32% respondents were in 26 to 35 year age group. From the above it was clear that the majority of respondents in the three categories were in the 26 to 45 year age group . Thus this is the economically active group, who are bread winners.

3. What is your highest educational level?

Figure 4.5 Respondents highest level of education

66.7% held a secondary ordinary level certificate as their highest educational qualification. 33.3% of respondents held a Diploma certificate as their highest educational qualification.

In addition, 100% of respondents in the Flea market operators’ category, 40% respondents held a diploma certificate, another 40% held a degree certificate as their highest qualification while only 20% of respondents held a primary school certificate as their highest educational qualification. None of the respondents in the Flea market operators’ category held neither a Secondary ordinary certificate or a diploma certificate as their highest educational qualification.

As for the respondents in the Hair salon operators’ category 75% of respondents in that category held a Secondary school certificate as their highest educational qualification as and 25% of respondents in the Hair saloon category held a degree certificate as their highest educational qualification.

The above data tends to reveal a very high literacy rate (that is they are able to read or write) of 100% from among the Fast food operators and Hair salon categories who held at least a Secondary school certificate as their highest educational qualification. Also, only 20% of respondents from the Flea market operators held a primary school certificate as their highest educational qualification. This attribute to the research’s respondents enhanced the reliability of the data collected, hence the reliability of the research findings and results. However this finding tends to contrast with findings by Gomez (2008) when he said in the formal sector skills are often acquired outside of formal education system.

Section B: INFORMAL SECTOR AS A LIVELIHOOD STRATEGEY This section sought to establish the use of the informal sector as a livelihood strategy. 4. How long have you been in the sector?

Figure 4.6 number of years respondents have been in the sector The study took an interest in the experience of respondents in their particular sector and the results are shown in fig 4.6 shows that the majority of respondents 67% in the Fast food

operators’ category, together with 20% respondents in the Flea market operators category and 88% of respondents in the in the Hair salon had been operating in their sector for between 5 to 10 years.

In addition, while none of the respondents in the Fast food operators’ category had been in the sector for over 15 years, it is of note that 20% of respondents in the Flea market operators’ category and 13% of respondents in the Hair salon operators category had been in their sector for over 15 years of age.

As for the minimum level of experience within each of the categories, 40% of respondents in the Flea market operators’ category had less than 5 years’ experience, although none of the respondents in either the Fast food operators’ category or Hair salon operators’ category had less than 5 years’ experience. One can simple concludes that the respondents depend on the informal sector as a livelihood strategy.

5. From your income are you able to meet the following needs On the question of whether they were able to meet the basics of rent, health bills, transport and fees for their children education, 100% amongst the respondents as all of them expect one said they were able to meet their livelihood. Only one respondent said she was having problem paying for her children’s fees. Section C: THE AVERAGE INCOME RECEIVED This section sought to establish the average income received by each of the respondents. 6. What is your monthly income range?

Figure 4.7 Respondents Average monthly income range

This variable was interrogated in order to establish the respondents’ monthly revenue range and the results are shown in the pie chart in fig 4.7 above. Pie chart in fig 4.7 above shows that all 100% of respondents in the Fast food operators’ category fell within the monthly revenue range of between $100.00 and $200.00. 25% of the respondents said that they get their monthly income from the informal sector hence they rely on the informal sector for survival. While 50% in the flea market monthly income which is above $300.00 and $400.00. However, none of the respondents in the Flea market operators’ category fell within that monthly revenue range although only 38% of respondents in the Hair salon category had monthly revenue of less than $200.00.

As for the majority of respondents in the Hair salon category, 63% of respondents in that category had a monthly revenue which fell within the $200.00 and $300.00 range. Only 20% of respondents within the Flea market operators’ category fell within a similar revenue range. Those who realised the highest monthly revenue ($500.00) were within the Flea market category, where 20% of respondents indicated that their average monthly revenue was over $500.00.

7. On average how much profit do you realise per month

Figure 4.8 Rrespondent’s average monthly profit

Figure 4.8 shows that all 6 (100%) of respondents in the Fast food operators category said they realised a monthly profit of between $100.00 and $200.00, a feat which is equalled by 62.5% of respondents in the Hair saloon category. 205 of respondents in the Flea market category realised a minimum average monthly income of between $200.00 and $300.00.

It would appear the category with respondents who were generally realising higher monthly incomes was the flea market category where up to 20% of respondents were actually realising over $500.00 in monthly income. While the average maximum monthly income realised by the other categories (Fast food category and Hair salon operators’ category) does not exceed $200.00 per month, the least monthly income realised by respondents in the Flea market operators’ category is actually $201.00. The above therefore shows that the respondents in the Flea market operators category are realising much higher incomes than operators in the other two categories.

8. Do you keep business record on purchase?

Figure 4.9 purchase Record keeping

The study took an interest in whether these informal businesses keep records of their purchases. An analysis of figure 4.9 shows that 67% of respondents in the Fast food operators’ category and 80% of respondents in the Flea market operators category actually keep record of the purchases that they make. However 100% of respondents in the Hair salon operators’ category together with 33% of Fast food operators, and 20% of respondents in the Flea market operators’ category categorically stated that they do not keep records of the purchases that they make. The above therefore reveals that the majority of informal traders particularly Flea market operators and fast food operators do keep a trail of their purchase.

9. Sales Record keeping by respondents

Figure 4.10 Sales record keeping by respondents

Also the question posed to the responded was whether they kept business records of their sales. Cross-tabulated 53% of respondents from across the three categories said they kept a record of their sales. This was contradicted by 47% of respondents who said they did not keep any records.

10. sources of stock?

Figure 4.11 sources of stock

The results about where the respondents get their stock, are shown in figure 4.11. 100% of respondents in the Fast food operators’ category and 38% of respondents in the Hair saloon operators’ category indicated that they got their stocks from wholesalers. However 60% of the respondents in the Flea market operators’ category and 25% of respondents in the Hair salon operators’ category actually import their stock, which is different from 40% of respondents in the Flea market operators and 38% of respondents in the Hair salon operators’ category who advised that they get their stocks from manufacturers.

11. Rate the benefit you and your family get from the informal sector

Figure 4.12 benefits of informal sector to respondents family

The respondents were then asked to rate the benefits they got from their sector. The results were cross-tabulated so as to come up with a collective position. The views of 63% of respondents from all the three categories said they benefit a lot from the informal sector as they were able to pay rentals and taking their children to school.

12. Is the informal sector your sole source of income?

Figure 4.13 whether the informal sector is respondents’ sole source of income Figure 4.13 shows the results when respondents were asked whether the informal sector is their sole source of income. Hundred percent of the respondents in the Fast food operators category, and 80% of the respondents in the Flea market category as well as 88% of respondents in the Hair salon operators category affirmed that the informal sector is their sole source of income. Conversely though 20% of respondents in the Flea market operators category and 12% of respondents in the Hair salon operators category said the informal sector was not their sole source of income. The above therefore shows that for the majority of informal traders their business provided their sole source of income.

If no, explain which other source of income do you have When asked whether the current business in the informal sector was their sole source of livelihood, 50% of the respondents were quick to point out that they were mixing up a few other activities that supplemented their livelihood. One Fast food operator said, the fast food venture was just one of two activities as she was also a Sales Representative of Avon and Angel hair products. One (10%) Motor Mechanic said his wife was running a Flea market

stall in town (Bulawayo). There was an interesting development when another Fast food operator said she was also employed as teacher under the Ministry of education. On a follow- up question the teacher said she had been doing this for quite a while now. During the week, she would assign somebody to run the Fast food outlet for her but during the weekend when business was brisk she just had to be there, to provide that oversight role.

Section D: CHALLENGES FACED BY INFORMAL SECTOR OPERATORS This section sought to establish the challenges faced by informal sector operators.

13. Informal sector business registered

Table 4.13 informal sector business registration status category of operation Fast food Flea market Hair salon Total informal sector rural district Count 6 4 8 18 business registered council % 100.0% 80.0% 100.0% 94.7% ZIMRA Count 0 1 0 1 % .0% 20.0% .0% 5.3% Total Count 6 5 8 19 % 100.0% 100.0% 100.0% 100.0%

Figure 4.14 informal sector business registration status

Respondents were also asked which one among them were registered with the ZIMRA or the Umzingwane rural district Council and the results are shown on figure 4.14 above. 100% of the respondents in the Fast food operators’ category and another 100% of respondents in the Hair salon operators’ category as well as 80% of respondents in the Flea market operators’ category indicated that they are registered with the Umzingwane rural district council.

It is of note also that only 20% of respondents in the Flea market operators’ category advised that while they were not registered with the rural district council they are however registered with ZIMRA. From the above it is clear that the majority of the informal traders are registered with the Umzingwane rural district council.

When asked how easy to go about the whole process of registering their enterprise those who were registered with the district council had the following to say. The respondents were grouped per category starting with the Hair salon operators;

The Hair salon operators said it was difficult, particularly given the fact that they needed to get medical certificates, even licences to operate. The process basically involved first

applying for a shop you want to rent, when approved a medical inspection follows, after one pays for the licence, then they would eventually get registered.

The Flea market operators were complaining of what they called too much paper work and unnecessary delays which they called the red tape, you also need to be well connected. It was through the district council registering process that they ended up registering with ZIMRA, another monster of an organization. Fast food operators said they process starts with the district demanding medical certificates, pay council fee and maintain cleanliness. They gave the following to be the benefits of registering with the district council, no more impromptu arrests or the need to pay bribe to maintain their location as a business person. Besides, they have no problems with the local rural district council; I can work however without any fear and intimidation from anyone. Health inspectors were no longer a bother even when they come asking for licenses, unfortunately the police continue to arrest them even when they are registered 16. What challenges do you come across? The informal traders were asked what challenges they were facing and they cited high rentals, council officers, lack of collateral security to get the loan, competition, payments of revenue or taxes at the border, people do not pay in time, no water and sanitation, working in the open and a general hostile operating environment. The registered Fast food operators’ Fast operators said at times they regretted getting licenced as some unlicensed players have entered the playing field. These unlicensed operators were lowering standards as they were not maintain hygienic standards, by at times selling left over from previous days’ wares.

Suggested ways for improving the informal sector Finally the respondents were asked to suggest ways of easing the doing of business in the informal sector. Some were quick to ask the authorities to provide loans to informal traders, construct proper structures where they would run their business from.

It became very unfair when the Municipal police were just being bribed and turning a blind eye to those who were not registered. It was imperative that the district council took steps to remove the unregistered players, as they distorted the playing field by lowering prices and affecting the properly registered players.

Chapter summary

The chapter looked at data analysis, data presentation in form tables, pie chart and bar graphs. The next chapter will look at summary, conclusions and recommendations.

CHAPTER FIVE

CONCLUSIONS AND RECOMMENDATIONS

5.0. Introduction This chapter brings to a close the research study “investigating the informal sector as a livelihood strategy: A case of the Esigodini Informal sector.” This will be done by giving a summary of the research and the conclusions drawn out from the research’s findings. The recommendations are derived from the conclusions arrived at from the responses of the respondents.

5.1. Summary

The crucial priority of this study was to investigate the informal sector as a livelihood strategy with particular reference to Esigodini informal traders. The research relied first and foremost on primary data, which was collected through questionnaires distributed to the various informal traders in Esigodini. To triangulate the data follow-up questions were made to adopt the open ended format. Interviews were also carried out to enhance the reliability and validity of the data collected through questionnaires. Secondary data was sourced from documents at the Umzingwane rural district council.

The results of the research revealed that indeed the informal sector is a livelihood strategy to the majority of respondents who clearly said that these could meet their basic needs with funds obtained from the informal sector. Besides, the majority of informal traders said these current occupations were their sole source of livelihood.

In addition, while some informal traders said that they kept records of their purchases, sales and business it was clear that some do not. In fact, a deeper examination of the findings shows that most, if not all of the informal traders could not tell the difference between

revenue and monthly income, meaning they were not separating business finances from personal finances. This was a basic weakness that was apparent throughout the three categories.

It was also noted that some of the informal traders had taken tentative steps to formalize their operations, as they had already registered with the Umzingwane rural District council and a few with ZIMRA.

5.2. Conclusions The research made the following conclusions from its findings:

The results of the study revealed that the majority of informal traders were relying on their informal trading activities as a source of livelihood. Indeed given the fact that almost all categories of informal traders had more than 5 years’ experience, except just 40% from the

Flea market operators had been in their business for over 5 years it was clear, that all things being equal their activities were sustainable. The conclusion is that the people at Esigodini depend on the informal sector

Moreso, while the majority of the informal traders had some basic understanding of some basic business concepts were appreciable it was of note that there were areas that still needed to be strengthened like basic Book keeping, which separates the individual from his/her business.

It was evident from the study that although some informal traders were saying their current activities was their sole source of livelihood strategy, some were diversifying and doing more than one business activity, this way they are assured that should they come across a difficulty in their current endeavors, they will something to fall back on as a survival strategy.

The research questions were answered fully as most of the people in the informal sector see it as their livelihood strategy. In addition, the objectives were partially achieved as some people benefit fully and other do not benefit to a greater extent.

5.3. Recommendations The following recommendations were however made

It is recommended that:- a) The Ministry of Small and Medium scale Enterprises takes a leadership role by holding

seminars where informal traders are taught basic Book Keeping concepts like, the need to

keep to keep records, separating the business owner from the business, need to maintain

basic records. b) The Ministry of SMS should persist and persevere in educating the informal traders

because the more they get into the mainstream economy they more they contribute to the

fiscus. c) In light of this therefore it is recommended that more and more informal sector be helped

so that the more they are able to support the more they disentangle themselves of the

cycle of poverty and the dependency syndrome .

5.4. Suggestions for future research Based on the findings of this research, the following suggestions for future research are made: that a similar investigation involving a larger sample size should be conducted to cover each sector separately, this way the findings of the study will not just be generalized as they will be more precise and sector specific.