Majoring the Minor: Towards a Framework for Integrating Informal Industry into Formal Industry in Zimbabwe

Abstract

There is global consensus on the centrality of the informal sector on economic growth. More importantly, the small to medium enterprises (SMEs) have become an important engine for economic growth for developing countries Zimbabwe included. This paper looks at the formalization of the informal sector in Zimbabwe. The argument being levelled is that continued growth of the informal sector without formalization of the informal enterprises has cantankerous ramifications on the economic growth, stability and industrial development. Overgrowth of the informal sector can be oxygen for the grey- market resulting in capital operating outside the formal financial systems thereby undercutting the economy. In this study, data was obtained through a critical review of various policy papers, academic articles on the subject area. Recommendations for formalization of the informal enterprises are made. The paper sets an agenda for the gradual formalization of deserving SMES through attaching it to and anchor industry that grooms the SME into the formal industrial practice.

Keywords: Words: informal sector, formalisation, economic development

DOI: 10.7176/PPAR/10-6-06

Publication date:June 30th 2020