The Commercial Workers Union of Zimbabwe (CWUZ) has implored the government to compel the informal retail sector to comply with appropriate employment standards if beneficial formalization is to see the light of day.
The calls come shortly after regional retailer Choppies Enterprise Limited (Choppies) and British multinational professional services and fast-moving consumer goods firms, PricewaterhouseCoopers International Limited and Unilever plc indicated they would shut down operations in Zimbabwe.
Firms like cement manufacturer Khayah Cement Limited and clothing retailer Truworths Limited entered corporate rescue in December and August 2024, respectively.
Even the most resilient brands like OK Zimbabwe which have stood the test of rough economic periods in Zimbabwe are now struggling to fill up their shelves.
The retail sector has blamed the rapid growth of informality in Zimbabwe as chief among the causes prompting unfair competition which is now pushing the formal sector out of business. The shadow economy is also enjoying easy access to foreign currency and tax evasions.
In a bid to ease informalisation of the sector, Finance Minister, Mthuli Ncube this week recommended a raft of measures which include the adoption of e-money and use of bank accounts for all businesses.
But speaking to NewZimbabwe.com, CWUZ General Secretary, Cuthbert Chikwekwete implored the government to consider compelling the informal sector to abide by appropriate labour standards if formalization is to subsist.
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"The formalization agenda cannot be complete if players in the shadow economy are not compelled to follow the retail sector's set standards. These tuck shop owners continue to enjoy easy operating conditions such as underemployment where they hire two or three employees and overwhelm them with mammoth tasks. Their employees are often not allowed to join trade unions and most of the business owners resist becoming a part and parcel of the National Employment Council," he said.
The workers' leader also criticized the informal sector for subjecting short-staffed workers to long hours of work with poor remuneration.
"One would note that at a time when OK Zimbabwe and Spar entities are contributing immensely to fiscus through Pay As You Earn (PAYE), the informal sector which creams off a huge chunk of the retail sector's profits is not injecting anything at all. The revenue leakages through the sector could be larger than anticipated," he said.
Chikwekwete added that there is an urgent need for the government to join hands and compel all informal players to contribute towards the fiscus and Social Protection of their workers as the nation journeys towards formalization.
