Informal economy, Vulnerability and Marginalization in times of pandemic: Evidence from Masvingo Province, Zimbabwe

Abstract

The COVID-19 epidemic affected all facets of human life, particularly among vulnerable groups in the Global South. This pushed most governments to devise various contingent measures to safeguard citizens. As part of Covid-19 containment measures, the government of Zimbabwe imposed a total lockdown that saw the closure of businesses, schools, and national borders, and restricted human mobility. Though the total lockdown was noble, little was done to cushion vulnerable categories whose livelihoods entirely depend on mobility .Hence, we focus on ways in which Covid-19 measures exacerbated existing social inequalities and vulnerabilities among people who operate in the informal economy in Masvingo Province. Drawing from a three-district survey (Masvingo Urban, Chiredzi and Gutu) we examine how the livelihoods for people in the informal employment changed in response to the containment measure implemented by the government as well as the effectiveness of government-initiated safety net measures.

Background

The Government of Zimbabwe embarked on several measures meant to deal with the pandemic. These included a declaration of a state of emergency beginning from the 29th of March and culminated in an indefinite lockdown pronounced on the 17th of May. These measures re-defined employment into essential and non-essential, simultaneously bringing inequality since being non-essential meant your activities could be suspended. Most of the people in informal employment fell under the category of non-essential, implying that they could not pursue their livelihood activities, hence leaving them in a perpetual state of uncertainty and livelihoods precarity . Moreover, using the lockdown, government through local authorities embarked on a restructuring of the informal sector, knowing fully that the chances of resisting these policy changes were minimal since people were confined to their homes. This saw the demolition of informal markets and their restructuring. The urban transportation system was also restructured with private and informal transporters prohibited from participation in public transportation. This scenario presents a classical picture of how pandemics feed on inequality and can exacerbate the vulnerability of individuals working in the fringe economy. The informal economy is also the most accessible livelihood option for the urban and peri-urban poor as well as the popular option of supplementing income for underemployed, and underpaid workers in urban spaces. Hence, this research aims at understanding how people employed in the informal sector have been negatively affected by the government’s response to the pandemic.Against this background, we seek to assess the extent to which Covid-19 has affected their livelihood and the implications the pandemic has on their household financial stability. Furthermore, we focus on people employed in the informal sector because 76% of employed Zimbabweans are employed in the informal sector. By focusing on this sector, we get insights into the impact Covid-19 has on many Zimbabweans operating in the informal sector.

Research Design

Trend analysis will be adopted to investigate fluctuations in income and expenditure for selected households.

• Level of household income for people who work in the informal sector – comparative analysis of income level pre-lockdown and income levels during the lockdown. This will help us determine changes in income and resultant adjustments made by households.
• Expenditure level fluctuations – we aim to capture shifts in expenditure and consumption for households that depend on income from informal economy. By looking at expenditure before national lockdown and during lockdown we can observe fluctuations that point us to the effects of Covid-19 on household expenditure. Juxtaposed against house income, the data can provide insights into level of vulnerability, financial constraints and food poverty households were exposed to due to the pandemic.
• Effectiveness of government’s response measures to combat the effects of COVID-19 – we focus on how measures which include, stimulus package, lockdown measures and informal sector restructuring have impacted informal sector-based livelihoods and reproduced inequalities. These measures directly impacted household incomes and vulnerability.

Explanatory factors or interventions to be assessed and strategies for measurement or administration of interventions:

The national lockdown adversely affected household income for people working in the informal sector. Statistics show that most people in the informal sector rely on hand to mouth, in that daily proceeds are channeled towards daily household needs. The closure of business disrupts the hand to mouth system, thus affecting consumption and forcing households to tap into saving and other avenues. This survey aims to measure the extent to which selected households were affected by the national lockdown.

Hypotheses

• In what ways has Covid-19 pandemic affected livelihoods and viability of households whose income come from informal sector in Masvingo Urban, Chiredzi and Gutu?
• How has policy measures to deal with the pandemic affect informal sector-based livelihoods in urban centres in Masvingo Province?

Findings

• The COVID-19 and containment measures adversely affected the livelihoods of people operating in the informal economy, and many stopped operations in the face of low business and reduced income.
• Livelihood activities were disrupted by sudden policy and regulation changes, whose enforcement effectively closed the livelihood options of most people with informal sector dependent livelihoods. However, for a few resourceful traders, the crisis presented new opportunities for business as they managed to cash in on the scarcity created by bottlenecks in the supply chain of goods and services.
• Household consumption and income showed an increasing impoverishment and livelihoods disruption for informal economy-dependent households. The pandemic exposed the livelihoods precarity of people in the informal sector and exposed the limitations of state-based safety nets.
• In the face of an absentee state many respondents fell back on civic and private institutions and social capital for protection. Although the pandemic responses show the importance of social networks and mutual aid in the informal sector, they also reveal an absentee state that did not do enough to cushion citizens from the adverse effects of its policy decisions.
• We recommend that pandemic and emergency responses must put the vulnerable at the centre and strengthen public and private institutions for their protection.
• We also recommend that emergency responses should be inclusive and ensure that the needs and livelihoods of people in the informal sector be prioritized in the same manner with those in the formal sector. This helps in ensuring that emergency situations do not end up worsening the already existing inequalities.

Watch Lloyd Nhodo, Hardlife Stephen Basure, Fadzai Chipato, and Josiah Taru present the findings from their project: