The contribution of informal sector trade to poverty reduction in Rusape, Zimbabwe

Abstract

Zimbabwe has been experiencing an exponential increase in the levels of household poverty because of the contraction of the formal economy. This state of affairs has resulted in a significant proportion of Zimbabweans engaging in informal sector trade to mitigate the effects of economic decline.

The goal of the study was to determine the contribution of informal sector trade to poverty reduction in Rusape, Zimbabwe.

The researcher adopted a qualitative research approach and the study was applied in nature as it sought to understand how poverty can be reduced through informal sector trade. The research design was a collective case study. The researcher made use of availability sampling and interviewed participants who were willing and available on a one-on-one basis.

The study contextualised how informal sector trade reduces poverty within the social development approach. The study established that informal trade was a commercial enterprise that was undertaken by both men and women of all ages to sustain their households. Engagement in informal trade accorded informal traders the opportunity to be self-sufficient and to generate incomes. The incomes obtained from informal trade enabled the participants to provide for the dietary, medical, housing and educational needs of their families. The study also revealed a number of business survival strategies employed by informal traders to ensure sustainability. Findings show that rotational credit and savings schemes (ROCSS) play an important role in sustaining informal trade operations and their contribution to a reduction in household poverty.

The study concluded that engagement in informal trade reduces household poverty. Recommendations include how the State can facilitate the growth of the informal sector. Furthermore, it is recommended that the social work profession should actively engage government structures and advocate for the development of the informal sector and the widespread adoption of the social development approach which reduces poverty in a sustainable manner.