Differentiation among Small-Scale Enterprises: The Zambian Clothing Industry in Lusaka

1. Differentiation among Small-Scale Enterprises: The Zambian Clothing Industry in Lusaka

2. Soweto Market

3. Informal Sector Characteristics • Small-scale operations • Use of labor-intensive techniques • Low technology • Indigenous ownership • Heterogeneous

4. Three Categories of Ownership • Asian community • Zambian Women • Zambian Men

5. Small-Scale Women in the Clothing Industry • Problems • Limited markets • Domestic responsibilities • Necessity of husband’s permission • Cultural attitudes toward women • Lower access to financial support and credit • Concentrated in second-hand clothing

6. Upper Income Women in the Clothing Industry • Boutique-style outlets • Produce for the upscale market • High quality fashion garments • Greater capital input and foreign exchange • Fashion courses abroad • Network of personal contacts • Formal education

7. Zambian Businessmen in Small-Scale Manufacturing • Not very successful • Lack ties to wholesalers • Controlled markets • Lack of investment capital • Low skill base • High operating costs • No secure market

8. Workshop Tailors: A Challenge to the Asian Dominance of the Clothing Industry • Tailors can produce low-cost clothing • Numerous small workshops • Located near large market areas • Small capital outlay • Rely on network of repeat customers • Allows for reliable customer base • Extend credit

9. The “Veranda” Tailors • Capital base is smaller • Outdoors • Around their residences • On the veranda of a store • Concentrate on repair services • Poorer clientele • Retired men or young men

10. Petty Producers: Toward Evolution or Involution? • Owner, worker, manager often the same • Rarely movement into large-scale production • Sometimes expansion within enterprise • Obstacle is need for expensive inputs • Different relationship with market • Low purchasing power of population

11. The Effect of Salaula on the Lusaka Clothing Industry • Many shops owned by the Asian community • Most Zambians work for Asians • Work for commissions • Teachers, doctors, nurses, secretaries • Threat to indigenous clothing industry • High volume of salaula • Zambian government at a fault

12. Who Rules the Streets? The Politics of Vending Space in Lusaka Informality vs. the Free Market in Zambia

13. Overview • 1997: New City Market • 1998: Crowding • Traffic problems • Public health dangers • Pickpockets and thieves • Businesses relocated • 1999: Crackdown • Vendor stalls demolished

14. Why the Crackdown? • Law and order • Sanitation • Health • Infrastructure

15. Growth of Informal Sector • Second Republic: 1972-1991 • Response to shortages of basic necessities • “Suitcase Traders” • 1990s: Structural Adjustment • Neoliberal economic strategies • South African companies • Lack of formal economic development

16. The “Office of the President” and the “Vendors’ Desk” • 1993: LCC removes street vendors • President Chiluba intervened • Blamed the LCC for not giving other spaces • Viewed as government acceptance of stalls • Left markets and descended on city center • 1996: Vendors’ Desk established • Address concerns of vendors

17. The New City Market • Chiluba calls for an “ultra modern market” • Based on ones he saw in Israel • Replaced the old Soweto market • Vendors demonstrated • Promised stands in the new market • Vendors set up stalls in new market • Quickly left

18. Complaints • Exodus within first days of new market • Conflicts: vendors, police, LCC • Make-shift stalls burned on opening night • Rule: no vending within 200 M • High fees • Vendors shunned the market

19. The Crackdown on Street Vendors • April 1999: Occupancy at 10% • Police and paramilitary officers • Razed temporary stalls in city center • Continued across the city • Vendors moved back to the markets • Chiluba encouraged the crackdown

20. The Timing of the Crackdown • Market open and nearly empty for two years • Vacant stands in other markets • Costly exercise • Environmental and health concerns • Provide basic infrastructure • Establish public order • Maintain supervision

21. Embracing the Free Market: Removing Vendors from Public Spaces • Urban markets upgrading program: EDF • Must fill markets if upgrading them • Opening market to potential vendors • Must end lawlessness and anarchy on streets • Goal: improve overall investment climate • Market and mall developments continue • Vendors continue to return to the streets

22. Where did the Vendors Go? • Mobile stands that are dismantled easily • Retreating into Old Soweto Market • Returning to the city streets • Another crackdown in August of 2002 • Conflict between vendors and the local authority continues

23. Home Based Enterprise in a Period of Economic Restructuring in Zambia

24. Why Home-Based Enterprises? • Disillusionment with formal sector jobs • Public sector restructuring • Inadequate incomes • High rates of urban poverty • 1992-1995: 77,300 formal sector jobs lost • 1986-1993: 1.8 to 2.3 in informal sector • Continued privatization is a threat to jobs

25. The Copperbelt Province • 7 urban districts (86%) • 3 rural districts (14%) • 7 major copper mines • Decline in formal jobs • Kitwe • Mine Township • Council Township

26. Pilot Study of Home-Based Enterpises • Explore how enterprises were established • How the home was adapted for activities • Challenges/opportunites in home work Emphasis: How workplace and residential activities and spaces were integrated

27. Range of Economic Activities • Three Categories • Petty trading or retailing • Petty manufacturing or repair • Services • Engaged in simultaneous enterprises

28. Who is Involved? • Both men and women • Average age is 30 • Not below 20 or above 45 • Some have formal education • Children were involved • Informal networks of family and friends

29. Why are People Involved? • The need for employment and income • The type of enterprise • Advantage of working from home • Two major groups of people • Informal sector is the last resort • Formal sector separation by choice • Ability to earn substantial incomes

30. Beneficial Characteristics of HBEs • Rentfree • Simultaneous engagement in several HBEs • Childcare by household members • Site of storage and production • Mixed use of house and land • Domestic and economic functions at one site • Conduct business at any time of day • Non-monetary exchange networks

31. Negative Aspects of HBEs • Operational constraints • Lack of access to financial support • Infrastructural constraints • Difficulty in starting an HBE • Resource mobilization -- savings, friends, family • Limited skills

32. The Home as a Work Place • Adaptability and Fungibility • Space can be converted quickly • Spatial changes only inconvenient when visitors are coming • Intrusion of business generally accepted • Space to build workshops, sheds, rooms

33. Conclusions • HBEs are not transient, stop-gap measures • Lucrative despite constraints • Changed landscape in residential areas • Should trend be stopped or regulated? • New concepts: • Land use zoning • Plot usage

34. Recommendations • Broaden conceptual categories of home use • Income generating activities as valid and normal • Reevaluate strict land-use controls • New focus in city planning • To assist development of HBEs • To mitigate negative effects • Planners must increase focus on HBEs