CONDITIONALITES
8.3.1 Output, price and supply
8.3.1.2 Aggregates (Crushed stones and building Iriver sand)
Ideally, under circumstances of reduced cement demand, the price of cement should have been falling or have fallen. The rises in prices of other inputs have prevented this from happening. It is very common to see informal traders selling cement bags by the roadside below the retail price in most established hardware shops. For example, the factory price at Circle Cement Ltd was $220 for a 50Kg bag of cement. The study found that on average, most formal traders in Mutare were selling the same bag at $230 and the informal sector average price was $225. Most informal traders were willing to negotiate the sale and lower the price. Unfortunately however, we noted that most informal sector traders did not keep their cement in dry and sheltered conditions. The quality of their cement cannot therefore be guaranteed to be of good condition Obviously, competition between the formal sector businesses and the informal traders to the advantage of the consumers. The competition keeps the prices down. However, the failure by the Government to tax the informal sector means that government is losing Millions of ZimOollars in uncollected company and income taxes, at a time when the government badly needs this money to finance other programmes.
Undoubtedly, prices could come down if there is transfer of technology and development into the hands of the informal sector. This will bring increased competition and also result into the creation of employment and community empowerment, which is in line with the ESAP aims and objectives. Spence (1992) observed that Indian technologists have been experimenting with mini-cement plants since the 1960s in an attempt to develop a process for producing cement of identical quality to that of the developed world. However, they use equipment at local scales without involving transitional capital.
This kind of entrepreneurship taken into the Zimbabwean context would help the informal sector achieve higher productivity. With the support of Scientific & Industrial Research & Development Centre it would be easier to achieve such levels of technological development.
In Mutare, for example, one load (1 cubic metre) of building sand from the formal sector was selling at $95 while the same load was being sold at $60-$80 by informal sector traders. We also noticed a tendency by most informal traders to charge different prices for their goods depending on the appearance and status of the customer. Affluent- looking customers were usually charged higher prices. The informal business of selling aggregates has now spread to all other major towns and cities in Zimbabwe. Wherever you see a construction site, there is bound to be an informal trader dealing in aggregates. Since informal trades in aggregates usually tend to be women and children, there is concern for the health and safety of these individuals in this emerging market lacking protective clothing for the women and children. However, despite these working conditions we regard Hansenne's (1991, cited in ILO, 1995) argument that, the informal sector cannot be aided by merely creating a less discriminatory policy environment or by giving it public money. The sector needs special attention and assistance from the Government, if it is to overcome the 'teething' problems. The special assistance and attention should be in the form of education on health risks and micro lending of funds to access protective clothing needed for the job. The Department of Natural Resources has now voiced their concerns against this growing trade, citing environmental damage caused by these mostly enterprising women and children.
The illegal quarrying for sand and stone for building purposes, which began on a small- scale basis has now reached considerable proportions. Although the Ministry of Natural Resources does not recognise the benefits of the small-scale stone-breaking industry as entrepreneurial and job creation initiatives, these ventures need to be applauded.
However, the activity (stone-breaking) needs to be regulated urgently because its health, economic and environmental consequences are far reaching.
8.3.1.3 Cement blocks, burnt bricks and chinaware
In Zimbabwe, there is a strong tendency to use more cement blocks than ordinary burnt bricks in low-cost housing, as can be seen by the high percent of companies that are involved in cement block making. There is 80% block manufacturing in the industry compared to only 20%, brick manufacturing as shown on table 7.8.
Table 8.7 percentage of Fonnallnfonnal sector share of building materials Production for Shelter
Infonnal Fonnal
Burnt Bricks 2 98
Cement blocks 80 20
China ware 1 99
Tile 1.5 98.5
Source. Mucharambeyt 200 Survey Data
This is expected though, considering the high price of fuel (electricity, petroleum or firewood) incurred in making burnt bricks. Past negative performance experience of large state companies supported by Government could have contributed to discouraging most entrepreneurs from going into this business.
Following the demise of all public sector brick making companies and the liberalisation of the economy, some private and small-scale companies have since taken up brick making. One good example is that of Beta Bricks that recently (1999) acquired a $18.5m brick and chinaware Kiln from South Africa, to boost its existing chinaware and brickwork capacity. Beta Bricks managing director said that, with the acquisition of this new kiln, he expected to attain a production level of approximately 5,000 bricks per week. The company also has plans for the production of toilet cisterns and bathroom face basins;
an area that the informal sector cannot venture into due to the magnitude of the start-up capital required.
The study found a wide range of prices for concrete cement blocks and burnt bricks. It must be said though, that most burnt bricks we came across were of very poor quality as they had cracks and probably could not pass the laboratory standard test required by the Zimbabwe Building Bureau. Smith (1996) the Building Bureau chief agreed and stated:
Our main concern is that the blocks that are sold by the informal material suppliers have failed our laboratory test. We do not endorse the usage of these blocks....
Prices in the infonnal sector market were much cheaper than prices in the fonnal sector. On the other hand, none of the blocklbrick makers in the infonnal sector
(Plate 8.1) had any equipment to measure or test the load bearing capacity of their products.
Plate 8. 1 Brick and River sand sale on the roadside in Harare
The solution lies in converting the informal sector into the formal. This can be achieved by creating permanent controlled premises so that training and high standards can be achieved. This activity can even go as far as pooling the resources of the sector to aggregately market their products thus producing accountability and taxation.