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Harare - "Rat poison! Rat poison! That kills instantly! Rat poison! Rat poison! That kills instantly!"
Anyone who has walked down the street of Harare’s central business district in the last six months would be familiar with the line above.
It is a call to potential customers to buy rat poison from the numerous street vendors that have taken over the Harare's CBD and literally blocked its pavements. At every street corner, there is someone calling on customers to buy rat poison among other domestic pesticides.
Not that Zimbabwe has an outbreak of rats or cockroaches, but people have resorted to selling anything to put food on the table.
Formerly known as the “Sunshine City”, Harare is now a shadow of its former self, with vendors having taken over and literally blocking street pavements.
If this was happening in downtown Harare, it would be understandable, but it is taking place in the prime CBD area. One can find vendors right in front of OK Zimbabwe, the country’s leading and listed retail chain, or right at the doorstep of Edgars, the country’s biggest and listed clothing retailer.
Be it in front of Barclays Bank, Stanbic Bank, CBZ Bank, or ZB Bank, as long as the branch is located in the CBD it’s no longer a surprise to find vendors selling their wares right in front of these established businesses.
Formal businesses suffer
While stories of Harare having been turned into a vending jungle or of university graduates having been turned into vendors have been told and reported on several times, there is one story that hasn't been talked about. That is the story of CBD property owners and their tenants.
“I pay city council rates, water bills, taxes to the revenue authority while my employees pay income tax, but the same authorities are leaving us to the vagaries of street vendors,” said a clothing boutique owner in reference to street vendors who are literally taking away his customers right at his doorstep.
“As shop owners we are contributing to the country’s treasury through various taxes including value-added tax (VAT), but we are not being protected from the vendors who are not contributing a cent to government coffers,” he said, adding that if the situation does not change he will soon close shop and sell his wares from the boot of his car just like everybody else.
He is not alone in this predicament. Even established companies like listed beverage maker Delta are losing market share to backyard shops and vendors selling smuggled beverages from neighbouring countries without paying duty tax or even VAT.
With their market share taken by pavement vendors, some formal businesses are now struggling to pay rentals and surrendering some of their rented space.
“Tenants are failing to pay current rental rates and are re-negotiating existing contracts for possible downward rental reviews,” said Edson Muvingi, MD of Zimbabwe Stock Exchange-listed entity Zimre Property Investments.
“As property owners we also pay high taxes to the city council, but our buildings are losing tenants every day as the CBD has been informalised,” said Muvingi, adding that office tenants are now irritated by vendors who have resorted to using loudspeakers as they try to outdo each other.
“The rapid informalisation of the city centre is really affecting the way business is operating. Some of the streets are unofficially closed because people are selling their wares, so it is becoming a very serious issue because occupation in the CBD space is coming down due to this."
Average void levels for his company have increased to 19% from 14% in 2013.
“We have very nice buildings, but are surrounded by people who are not very amenable to corporate operations,” he said.
Just another slum
The situation is so bad that Zimre Property Investments is now considering selling some of its CBD buildings.
“We strongly believe that we need to reduce the CBD portfolio so we are considering disposing of some buildings and we are currently engaging with potential buyers,” said Muvingi.
Unfortunately the Zanu-PF government is blind to this apparent destruction of formal businesses. Political gains are being prioritised at the expense of business. First lady Grace Mugabe has already told the police to back off from arresting street vendors.
With another ZSE-listed property owner, Pearl Properties, now considering turning some of its CBD offices into residential flats, soon - and very soon - Harare will become just another slum.
The Confederation of Zimbabwe Retailers last Thursday engaged the vendors' union for the first time to address the issue of declining business as over 5.7 million vendors, close to half the country’s population, are threatening their survival through illegal shopfront vending.
The retail confederation’s president, Denford Mutashu, reportedly said vendors were depriving them of business yet they invested heavily into licence fees, employee and other costs in anticipation of a return on investment.
