Employees Empowerment

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LEGAL EMPOWERMENT OF THE POOR: EMPOWERING INFORMAL BUSINESSES IN ZAMBIA

By

Silane K Mwenechanya (Dr)1

An Issue Paper prepared for the UNDP – Commission on Legal Empowerment of the Poor

October, 2007

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All comments should be addressed to Dr SK Mwenechanya at skmwene@zamnet.zm. The author is a business consultant with a special interest in private sector development. He is based in Lusaka, Zambia.

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TABLE OF CONTENTS
LIST OF TABLES AND FIGURES............................................................................. 3 OVERVIEW................................................................................................................ 4 THE NATURE OF ZAMBIA’S INFORMAL BUSINESSES ...................................... 9 KEY BARRIERS TO EMPOWERING INFORMAL BUSINESSES IN ZAMBIA....... 13 The legal and administrative climate ................................................................... 13 Taxation .................................................................................................................. 15 Financing the informal sector ............................................................................... 15 Performance and quality standards ..................................................................... 17 EFFORTS BEING MADE TOWARDS EMPOWERING INFORMAL BUSINESSES IN ZAMBIA............................................................................................................... 18 The policy framework ............................................................................................ 18 Empowering informal sector enterprises through legislation ........................... 18 Introducing Marketing and Bus Stations Management Boards under Act No. 79 of 2007 ................................................................................................. 18 Empowering informal sector enterprises through the Citizens Economic Empowerment Act.................................................................................................. 19 RECOMMENDATIONS............................................................................................ 20 Strategic approach................................................................................................. 20 Enhanced baseline survey of informal sector enterprises.............................................................................................................. 21 Product quality and skill standards ..................................................................... 22 Organisational and institutional empowerment of the informal sector............................................................................................. 23 Financing informal sector enterprises ................................................................. 24 Legal recognition of the informal sector.............................................................. 25 Building on existing business empowerment models........................................ 25 WHAT ROLE CAN THE COMMISSION PLAY? .................................................... 26 CONCLUSION ......................................................................................................... 26

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APPENDICES

LIST OF TABLES AND FIGURES
Tables
Table 1: Employee Status for the Enterprise by Industry ......................................... 10 Table 2: Distribution of Informal Enterprises by kind of Economic Activity, Zambia, 2002 – 2003 ............................................................................................. 11 Table 3: Period of Years the Enterprise has been in Active Operation ................... 12 Table 4: Zambia business entry regulations............................................................. 14 Table 5: Zambian contract enforcement .................................................................. 14 Table 6: Main sources of capital for setting up informal sector enterprises ............. 16 Table 7: Working...
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