eBusiness Weekly
It seems ever more essential that businesses, especially manufacturers and other suppliers, need to look carefully at the regular statistics put out by ZimStat, and in particular the quarterly labour statistics, as well as checking out the figures from the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development.
Between the two they can start getting a fairly accurate picture of who their potential customers are, how much they earn and where they live.
The picture is clouded a bit by how everyone counts, that is the criteria they use, and in particular by where exactly the small-holder farmers fit in, hence the need to use both the ZimStat statistics and the Agriculture Ministry’s statistics on how many small-scale families are now productive with some income after meeting basic food needs.
ZimStat labour statistics do not include the smallholder farmers when it comes to totals and labour participation rates, but do include the rest of informal sector as well as the formal sector. We see this in labour participation rates, that is the percentage of the working age population earning a living, broken down by province.
Harare sits up there with 63,2 percent and Bulawayo with 60,9 percent while the mixed rural-urban provinces are significantly lower and their percentages tend to reflect the proportions of urban populations.
Agriculture Ministry statistics are less complete, with the numbers in the Pfumvudza/Intwasa schemes probably giving the best indication of how many pure rural households at the lower levels are now involved in production, rather than just subsistence. But there is very little detail on family incomes, although it is possible to get some idea by taking the total deliveries to the GMB and Cottco from Pfumvudza/Intwasa farmers, who all get free inputs, and dividing by the number involved. Deliveries are the surplus.
The picture changes quite rapidly these days. And the speed of change, and the direction of change, need to be looked at by businesses to start working out potential markets. People living in total poverty are obviously not much of a market, then comes the large group with fairly low incomes, then the growing number with better incomes.
The dichotomy between the formal and informal sectors is not as rigid as it once was, with the income levels of the upper rungs of the informal sector now earning more than the lower rungs of the formal sector. Some of this comes of those upper informal rungs not formalising their businesses, chatting to Zimra and registering their businesses.
Another very important point that comes out of the ZimStat statistics is that only half, actually a whisker under half, are involved in the wholesale and retail trade, which includes repair of motor vehicles. The rest are split into a large number of sub-sectors, from mining at 12 percent (those artisanal miners, and manufacturing at 11,5 percent and then rapidly down the ladder.
But when you consider that there are 1,46 million people in the informal sector, outside agriculture, you are talking about some very large numbers, such as more than 700 000 involved in trade or motor repair, or almost 170 000 involved in manufacture and slightly more than that as artisanal miners.
The big point is that many of these are not earning much, but they all are earning their daily sadza from the informal sector, and anyone who can average selling just the equivalent of US$5 a month to everyone in the informal sector is looking at the equivalent of US$7,3 million, a large sum by anyone’s standards.
This is definitely a market where volume, rather than the size of individual sales, is the critical factor. That large number in manufacturing and construction and some of the really small sectors like electricity and gas, just about 250 000, probably explains why there are so many hardware stores since those groups do require hardware.
These are the sort of calculations that people need to make.
The impact of Pfumvudza/Intwasa is more difficult to work out, since ZimStat does not include the small scale farmers, but what ZimStat does include are provincial totals for everyone else and here we get some very interesting results.
While the percentage of the active labour force in formal and informal employment is largely static in the cities, if the Harare and Bulawayo figures means anything, the numbers are rising in the rural provinces, or more precisely the mixed provinces, and that must largely be the result of rising rural incomes creating more work outside agriculture.
This can be expected. We have seen ZimStat noting the rising construction of modern housing in rural areas as part of the census, and while some building is being done by farming families most have to hire a local builder, usually in the informal sector, to at least do the tricky bits and sometimes the whole new room or rooms. In any case there are sales of construction materials, from cement and roof sheets to plumbing supplies.
Other areas where demand appears to be high are in things like solar lamps and appliance chargers, Those small solar screens are now ubiquitous, as candle sales continue falling and paraffin becomes ever harder to find simply because so few buy it. That is a huge change in roughly a decade and an almost total switchover in the last two decades. This sort of thing is likely to accelerate as rural incomes pick up, children want their own homework lights and so on. ZimStat picked that up in the census as well, with a large majority of Zimbabweans now using electric lights, which means solar lights in most rural homes.
Another point is that a little over 50 000 people are involved in the informal transport and storage, and that must mean basically transport as there is little demand for informal storage. Some of these are mushikashika drivers, of course, but a lot are those with a small or modest truck and as we are talking about thousands of such trucks we can see a whole new business sector rising.
Even the pure retail, formal and informal, is the largest employment sector outside small scale farming, about a quarter in the formal sector and half in the informal. This is where the goods produced elsewhere in the economy are sold and that sector is another one that is growing. IT seems important to know what is being sold and where.
We are already seeing more businesses opening branches in smaller towns, starting with the smaller towns in the tobacco-growing areas where the one huge gain from Covid-19 restrictions meant deliveries were decentralised and consequently more people with actual cash shopping in the small towns.
This trend will grow, as cotton comes back with the Government already owning more than half of Cottco shares and seemingly determined to buy a fair number of those outstanding after the managerial disaster that hit that company.
Even the pure Pfumvudza/Intwasa programme is not only expanding in the number of farmers but in the average hectarage. The limit for free inputs of five plots still holds, but the number of plots per family is rising. In the first couple of years a lot of families were on just one or two plots. Although these can be dug by hand, it is hard labour.
But as the farmers carefully explain, the same plot can be reused in subsequent years, with just modest work, largely because the conservation techniques as mulch rots actually build up soils. This means that extra plots are commissioned each season. It needs an average of around two for a reasonably large family for on farm consumption of grain and legumes, so the extra plots are commercial.
So we can have a typical family in their first year sort of growing enough food, in their second year definitely growing enough with some for sale and in the third year, this coming season, getting a reasonable income.
It is this where so many businesses need to be thinking about what they make, what they sell, how they distribute what they makes, and where they do the selling.
Downloading ZimStat statistics, from zimstat.co.zw, seems a good idea, looking at both the plus sign for the “latest reports” as well as the one for “population 2022”. That can give the useful figures for the quarterly labour report as well as things like the housing report from the census.
The Agriculture ministry needs to upgrade its website, at moa.gov.co, since it promises a lot but is light on statistics but that can be improved especially if business organisations start pushing hard. The data exists in the Ministry, it just needs to be uploaded.
