Informal sector takes over border town

Livingstone, overlooking the Victoria Falls on Zambia's southern border with Zimbabwe used to be a thriving industrial town, but times have changed.

The factories that provided jobs and a sense of pride have collapsed - undermined by Zambia's economic failure in the 1980s, and closures under a privatisation programme in the 1990s. The Livingstone Motor Assemblers, which employed 200 people to assemble Fiat cars from Italy, has shut its gates. A once vibrant textile industry has been retrenching under new owners.

But the lack of formal sector employment has not stopped the likes of Coster Nyimba from earning a living. Nyimba, from Malota compound, Livingtone's poorest shanty area, has taken matters into his own hands and turned his bicycle into a money making machine.

Decked out as a rickshaw, he peddles travellers between the Zambian and Zimbabwean border posts for 3,500 kwacha (US 70 cents) a trip. He is representative of the new entrepreneurial spirit in the town.

"On a good day I do up to five round trips and that way I can make money for mealie meal (staple maize) for my family," Nyimba told IRIN proudly, as he took a breather before battling uphill. "That way I can feed my wife and do not have to beg from anyone. It's tough, but it's the only alternative I have."

Across Zambia, a decade of freemarket reforms designed to pull the economy into shape after 20 years of a welfare state, have seen the rollback of social services and deepening poverty. But with its tourist potential, Livingstone's decline has been much less precipitous than other Zambian towns. It has an additional advantage of being next door to Zimbabwe, with its larger and more developed economy.

Cross-border trade, the most common way of earning a living in Livingstone, has boomed since the collapse of the Zimbabwe dollar on the black market, following the Harare government's fast-track land reform programme.

At the official rate, US $1 is worth Zim $55. On the parallel market the rate is one to 600. Traders change US dollars for Zimbabwe dollars at the black market rate, which they then use to buy low-priced Zimbabwe goods such as sugar, cooking oil and cement which are resold in Zambia at an easy profit.

Zambian manufacturers unable to compete have complained, and the government responded in April by banning trade in Zimbabwean goods for two years. But the ban has had little effect, and instead has created a flourishing smuggling industry. That includes using canoes to cross the Zambezi, and shinning up cliffs to avoid the customs posts.

"If you say, 'stop buying and selling goods from Zimbabwe', you are passing a death sentence on lots of people who survive on cross-border trade unless you find them an alternative, such as real employment creation," said David Moyowambuyu, a trader.

Moyowambuyu has both a high school and college education, but cannot find a job in the official economy.

On the Zimbabwean side of the border, the largest supermarket is filled with Zambian women, queuing up for the banned products which they intended to smuggle across.

"Most of these are Zambians you are seeing," a Zimbabwean taxi driver explained. "They buy all the groceries, but thank God we have lots of groceries."

What he is less happy about is that Zimbabwean fuel is also being smuggled into Zambia. "They buy all our fuel leaving us with nothing, that's just the only thing I don't like. You see petrol here is Zim $74 per litre (US $1.30 at the official rate) while in Zambia I understand it is much more than that. So the Zambians come and fill sometimes three-times a day and go and resell, that is bad."

Petrol in Zimbabwe costs the equivalent of 518 kwacha per litre at the official exchange rate, but sells for 3,800 kwacha in Livingstone.

Local legislator Sakwiba Sikota is resigned to the fact that Livingstone's smuggling rackets will continue.

"It could be a child wanting to go to school or an adult looking at ways of earning a living [that is behind the smuggling], but whichever way we look at it jobs, and we mean meaningful well earning jobs, ought to be created in this city to reverse the situation," he said.