Abstract
In the past decade, Zimbabwe has been hit by its worst economic performance since its independence in 1980. Capacity utilization shrank to ten percent and unemployment rate was above eighty percent by 2008 as the private and public sector witnessed massive retrenchments. As a result many people are finding themselves engaging in informal businesses to make ends meet. However not all people have joined the informal sector as has been witnessed by the number of people who left the country in droves to neighbouring countries. It is against this background that this research conducted an economic analysis of the determinants of entrepreneurship in Masvingo urban with an emphasis on the informal businesses. The research targeted a sample of 100 informal businesses (30 from Rujeko Light industrial area, 40 from Mucheke Light industrial area and 30 from Masvingo Central Business District). The businesses included among others flea market operators, furniture manufacturers, suppliers and producers of agricultural products, and food vendors. The research found out that level of education, gender, age, marital status, number of dependants, type of subjects studied at secondary school and vocational training are the main determinants that influence the type of business that entrepreneur ventures into. The study recommends formal training for the participants, for the businesses to continue into existence since they fill in the gap that is left vacant by most formal enterprises.
Highlights
In the past decade, Zimbabwe has been hit by its worst economic performance since its independence in 1980
Capacity utilization shrank to ten percent and unemployment rate was above eighty percent by 2008 as the private and public sector witnessed massive retrenchments
The research found out that level of education, gender, age, marital status, number of dependants, type of subjects studied at secondary school and vocational training are the main determinants that influence the type of business that entrepreneur ventures into
Summary
Capacity utilization shrank to 10% and unemployment rate was above 80% by 2008 as the private and public sector unleashed massive retrenchments. Even in the aftermath of a decade long economic downturn, Zimbabwe’s formal sector is still shrinking due to socio-economic factors that hinder the local industry full capacity utilization. The retrenched are joining and actively participating in the informal sector. It is against this background of growing importance of the informal sector in alleviating national poverty that this paper put forward some policy intervention suggestions in promoting the growth of the sector. 2012, Developing Country Studies Journal, Vol 2(9), pp.
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