In the last few weeks there have been riots in Zimbabwe. In Beitbridge, on the border with South Africa, furious cross-border traders set fire to a warehouse in protest at import bans recently imposed, while in Harare taxi operators protested against the cost of continuous police road blocks, where spot fines are extracted.
Both these incidents highlight how Zimbabwe’s economy has changed dramatically, and why the state has to accommodate, encourage and support the informal sector, not control, suppress and ignore it.
Formal unemployment runs at 90 percent or more, but this doesn’t mean that all these people are not doing things. They are, but not in the jobs of the past. Livelihoods are improvised and flexible, combining ways of earning income – farming, trading, dealing, manufacturing, mining, selling services and a host of other distributive activities, reliant on deeply embedded social relationships.
New networks of economic activity have emerged, as has a vibrant spirit of innovation and entrepreneurship. This is in the context of extreme hardship for sure, as the economy continues to plummet due to lack of investment.
Informal economies are built on relations. Many operating in the informal sector are reliant on patrons and support from others; sometimes this is through relations of kinship, or through the church, and very often political patronage plays a part. If you want to secure a spot to trade in town, someone inevitably has to be paid off. Informal activity is tough, precarious fragile, sometimes illegal, and often is subject to arbitrary taxation from those in authority – as in the case of the road blocks affecting informal transport operators across the country.
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What The Riots In Zimbabwe Mean: Don’t Mess With The Informal Sector
In the last few weeks there have been riots in Zimbabwe. In Beitbridge, on the border with South Africa, furious cross-border traders set fire to a warehouse in protest at import bans recently imposed, while in Harare taxi operators protested against the cost of continuous police road blocks, where spot fines are extracted.
Both these incidents highlight how Zimbabwe’s economy has changed dramatically, and why the state has to accommodate, encourage and support the informal sector, not control, suppress and ignore it.
Formal unemployment runs at 90 percent or more, but this doesn’t mean that all these people are not doing things. They are, but not in the jobs of the past. Livelihoods are improvised and flexible, combining ways of earning income – farming, trading, dealing, manufacturing, mining, selling services and a host of other distributive activities, reliant on deeply embedded social relationships.
New networks of economic activity have emerged, as has a vibrant spirit of innovation and entrepreneurship. This is in the context of extreme hardship for sure, as the economy continues to plummet due to lack of investment.
Informal economies are built on relations. Many operating in the informal sector are reliant on patrons and support from others; sometimes this is through relations of kinship, or through the church, and very often political patronage plays a part. If you want to secure a spot to trade in town, someone inevitably has to be paid off. Informal activity is tough, precarious fragile, sometimes illegal, and often is subject to arbitrary taxation from those in authority – as in the case of the road blocks affecting informal transport operators across the country.
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Kenya: Foreign Companies to Face 30 Per Cent Local Ownership Rule
Foreign companies opening offices in Kenya will be required to cede at least a third of their shareholding to locals after Attorney-General Githu Muigai fully operationalised the newly enacted Companies Act 2015.
The new law requires that foreign companies registering in Kenya cede at least 30 per cent of their shareholding to persons who are Kenyan citizens by birth.
Prof Muigai, via a gazette notice issued a fortnight ago appointed June 15, 2016 as the date to enforce in full the Companies Act. The new law was being implemented in phases previously.
Investors who fail to comply with the fresh ownership rules will be slapped with a fine of Sh5 million.
The law comes into force despite Industrialisation Secretary Adan Mohamed’s admission in November last year that the ownership rule was an “error” that would be corrected.
The statute also provides that there shall be a foreign company register and empowers the Treasury Cabinet Secretary to issue regulations on how foreign companies will operate in Kenya.
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Brexit: Cheaper UK expats… and other small, possible silver linings for Africa
On Thursday 23 June, the UK’s voting-age citizens took to the polls to decide whether UK should leave the European Union (EU). And by the following morning there was pandemonium as the world’s markets tried to adjust to the new reality of the UK’s 52%-winning vote to exit.
It will actually take at least two years for the UK to officially leave the EU after Article 50 has been triggered – the formal legal process for countries wishing to leave the EU. But the uncertainty around what the future holds has caused market turbulence. Agreements concerning trade and freedom of movement will have to be re-negotiated, leaving businesses unable to make informed calls on investment. After the results of the vote, the pound took a huge knock and rating agencies Fitch and Standard & Poor’s (S&P) slashed their credit ratings for the country.
Africa will not be immune to the effects as its countries face uncertainty around exporting to UK. For example, over a third of flowers sold in the EU come from Kenya – with the UK being the second-largest buyer. Kenya, as well as all other African markets, will now have to renegotiate new deals with the UK.
The continent’s markets are also likely to feel the pinch of a weaker pound in the long term.
“The UK is the fourth biggest investor in Africa so there will be less investment coming into the continent because there will be less growth and less money to spend,” says Leon Ayo, CEO for sub-Saharan Africa at international executive recruitment agency Odgers Berndtson.
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Cape Town: why foreign ‘swallows’ are swooping on homes in suburbs
Cape Town is a Pole Star for so-called “swallows”, part-time expats, seeking respite while the mercury drops a hemisphere away in Europe.
The spectacular cityscape of cliffs and sea, dominated by Table Mountain, is undoubtedly part of the appeal. As is the climate — dependably warm but rarely more than 30C.
And with the South African rand reaching record lows in 2016, extended holidays to Cape Town are increasingly likely to involve a trip to an estate agent. Relatively speaking, international visitors are able to buy into the Cape Town lifestyle for “virtually unprecedented” prices, says Mike Greeff of Greeff Properties, an affiliate of Christie’s International Real Estate.
Sales to foreigners in the Cape Peninsula soared 28 per cent over the November and December 2015 holiday season compared with the year before, according to PropStats, the database of the Institute of Estate Agents of South Africa. The total value of sales in January and February 2016 was up 21 per cent year on year.
“The standard of real estate available at these prices globally doesn’t begin to compare to what Cape Town offers by way of accommodation, size and quality of life,” says Greeff. In much of the Cape Peninsula, he says, high-end homes are available for less than $1m.
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