Zimbabwe's Economic Challenges Promote Entrepreneurship
Bulawayo, Zimbabwe - Sept 2007
Zimbabwe’s informal sector, previously dominated by low-income groups is poised for growth as more people resort to self-help and income generating projects, thus creating thousands of jobs for locals and contributing to the mainstream economy.
Faced with rising unemployment levels orchestrated by the current economic climate many Zimbabweans have taken up the challenge of reviving the economy through setting up business enterprises. This new drive has seen small to medium scale industries being created and run by ordinary Zimbabweans who previously did not dream of owning or running a business. While five years ago people would jostle for jobs at factories in Bulawayo, Zimbabwe’s second city and industrial hub, these days the slogan is: ‘Create your own job’ and contribute to national development.
Government figures show that about 80 percent of the Zimbabwean economy is in the hands of small businesses, i.e. small farmers, small miners, small producers, small exporters and small marketers. All of these people combined form a big part of the economy.
The small to medium enterprises (SME) sector has grown to become one of the biggest employers in Zimbabwe, particularly at a time when employment within the formal sector has shrunk rapidly. According to estimates from the Confederation of Zimbabwe Industries, at least 70 percent of Zimbabwe’s working population is employed in the informal sector. This figure could rise as more and more people are developing their entrepreneurial skills through vocational training so as to be able to venture into product-manufacturing businesses.
Two young men in Bulawayo have demonstrated that building a successful business enterprise does not require one to have a Masters in Business Administration or plenty of capital, but sheer determination and focus.
The two, Derrick Dube and Easy Kazeze both aged 24 have been running a successful artefacts business along the Bulawayo-Beitbridge road; one of the country’s busiest highways.
What started off as a hobby for the two young men in their backyards has turned out to be a vibrant business enterprise earning their families much-needed income. Made from a special type of reed grass, their household range of products e.g. bar stools, hanging chairs, ornaments etc which are in demand locally are now finding their way onto the export market.
My success is a result of hard work and determination after years of suffering. I could not get a job because I didn’t have any qualifications. In the end a friend convinced me to venture into business and become my own employer said Kazeze.
This was not the case for his business partner Dube, who was retrenched from a brick-making firm three years ago when the company streamlined its activities following a dip in the construction business. “I toiled for years trying to find another job, but companies were not employing anymore.”
“I never really thought I could do something for myself, and starting a business was never in my mind. I loved art so much and during my spare time I used to make small ornaments which I displayed in my home. I never thought this could be a talent that I could explore and develop,” said Dube. Now, with a monthly turnover of around Z$55 million the business has given their families a lifeline.
What makes their business enjoy so much success is the uniqueness of their products and the artistic flair exhibited in their designs. “We receive a lot of orders from visitors to the country and as a result our products have attracted a lot of foreign customers. We get orders from as far as South Africa, Zambia and Botswana. This has helped us a lot,” added Dube.
The business has also received a lot of support from locals who order products in bulk for sale throughout the country. The business has enabled the owners to buy equipment such as welding machines and it has also generated employment for three youths. “Our wish now is to expand our business and diversify our product range, but to do that we need capital,” said Kazeze.
This is one of the major hurdles faced by local entrepreneurs trying to develop their businesses. The majority of small businesses are hamstrung by a lack of adequate financing, particularly in the absence of collateral security.
Government has however promised that it will do everything in its power to nurture and grow the small to medium scale sector. It has so far this year allocated a total of $55.4 billion in loan facilities to support small to medium enterprises. More than 3000 jobs have been created and a further 2000 sustained.
Addressing mourners at the national heroes acre recently, President Mugabe said apart from a revolving fund for SME’s, government was determined to establish bigger markets for locally produced goods. He said, in order to equip business owners with the requisite skills that would enable them operate effectively, training in various business management programmes was in progress in all the country’s provinces.