More Zimbabweans Join the Informal Sector as Economy Stagnates

Zimbabwe’s statistical agency has amplified the growth of the country’s informal sector after revealing that year-on-year expanded unemployment levels marginally declined to 46,3% during the last quarter of 2022 from 47,2% reported during the same period in 2021 driven by the thriving sector.

Independent statisticians however say the figure could be hovering around 80%.

The country’s unstable socio-economic environment has been one of the major push factors driving thousands to neighbouring countries and further afield in search of better employment prospects. The growing number of Zimbabweans in regional countries like South Africa has been one of the factors behind the xenophobic attacks targeting foreign nationals in the neighbouring country.

According to the Zimbabwe National Statistics Agency fourth quarter labour force survey published this week, the easing of Covid-19 restrictions and a sharp growth in the informal sector has reduced the unemployment levels.

While the informal sector has been a major source of employment for most Zimbabweans due to a floundering economy and an exit of multinational companies over the last decade, the sector has been blamed for operating outside the taxman’s dragnet.

The report shows that the number of people employed in the informal sector such as vending rose to 1,437,755 during Q4 2022 from 1,408,032 during the same comparative prior period. Agriculture which accounts for 19,3% of employment comes after the informal sector.

Expanded unemployment rate is basically the combined rate of unemployment and potential labour force (PLF), where potential labour force consist of working age persons who during the reference period; were without paid work and either were seeking for work but were not available to start working or were available to start working but were not seeking for work.

Persons in unemployment are defined as persons who during the reference period; were without paid work, were seeking for work and were available to start working.

ZimStat conducts Quarterly Labour Force Surveys (QLFSs) as a way of ensuring timely provision of high frequency labour market statistics that informs planning and decision making.

The QLFS provides key labour market indicators which include but not limited to levels of employment both formal and informal, unemployment and some labour under-utilisation indicators, income levels, labour migration and job losses.

These statistics are useful in providing information for policy formulation on employment, human capital development strategies, macro-economic development, incomes support and social programmes. The survey findings also feed into the compilation of the quarterly gross domestic product (GDP) of the economy.

The Quarterly Labour Force Survey (QLFS) is a national household-based sample survey which was conducted in private households both in rural and urban areas across all provinces of Zimbabwe. The survey produces key labour market indicators which include levels of formal and informal employment, unemployment and other labour under-utilisation indicators, labour migrants as well as job losses.