Joblessness: It’s still doom and gloom

AFTER attaining Independence in 1980, Zimbabwe was regarded as an economic powerhouse in Southern Africa, with hundreds of thousands employed in its industries. Many of the workers were middle-income earners.

Report by Hazel Ndebele

The country was also a major agricultural producer in the region.

As the years passed by, Zimbabwe’s literacy rate increased to more than 90%, making the country an oasis of remarkable human capital development.

This is borne out by millions of locals employed by multinational conglomerates across the globe, especially after the turn of the century when most skilled and experienced workers fled an economic malaise that saw the unemployment rate skyrocketing to above 80%.

The job situation worsened from 2000, with undergraduate students from all universities sharing a common fear — the reality of unemployment in a moribund economy with less than 40% capacity utilisation.

To date, companies continue scaling down operations while others are closing down completely. As of 2011, close to 100 firms in Bulawayo alone had shut down, rendering more than 20 000 jobless, according to the Ministry of Industry and Commerce.

The shrinking economy, characterised by massive job losses is attributed to bad economic policies dating back to the 1990s during the days of the Economic Structural Adjustment Programme (Esap) where companies routinely retrenched to weather the economic storm.

Now, thousands of graduates churned from the University of Zimbabwe (UZ), National University of Science and Technology, Midlands State University, Great Zimbabwe University, Africa University, Chinhoyi University of Technology, Catholic University and polytechnic colleges as well as private tertiary institutions can only join the informal sector, which is predominantly engaged in cross-border trading in cheap Chinese products imported from South Africa, Tanzania, Zambia and Botswana.

The harrowing stories of graduates forced into cross-border trading, the main trade in the informal sector, is testimony to the shattered dreams of aspiring professionals.

Blessed Ncube, a Bulawayo graduate in her mid-20s with a Bachelor of Arts Degree from UZ attained two years ago, has joined the sea of informal traders who are earning a living from re-selling clothes imported from South Africa.

“I have since failed to secure a formal job since I graduated, which is why I have settled to buying and selling clothes to help with my day-to-day expenses while I look for a formal job,” she said.

The gloomy Zimbabwean economic picture was buttressed by last week’s Poverty Income Consumption and Expenditure Survey (Pices) report which indicated that a paltry 22% are in the formal sector while 57% of workers are employed in agriculture.

The report further states the informal sector is flooded with young people aged between 15 and 34 years.

Confederation of Zimbabwe Industries president Kumbirai Katsande said Zimbabwe’s economy shrunk further in the first five months of the year mainly due to de-industrialisation in Bulawayo, once the country’s industrial hub, further swelling unemployment figures.

But Finance minister Tendai Biti shocked the nation last week when he claimed the national employment rate was above 90%, sparking criticism from economists who accused the minister of contradicting his MDC-T economic blueprint — Jobs Upliftment Investment Capital Ecology (Juice) which aims to create a million jobs between 2013 and 2018.

Biti based his argument on the Pices report by Zimstat, which says employment stood at 91%, with the majority of the people engaged as farmers, taxi drivers or hairdressers.

Contrary to Biti’s assertions, Prime Minister Morgan Tsvangirai last year bemoaned that high unemployment was one of the major problems dogging the country.

“We need to create jobs for the people and reduce the 80% unemployment rate. Most of the country’s youth are roaming the streets,” Tsvangirai said.
Economist Takunda Mugaga said Biti’s employment rate figures were misleading and unfair to ordinary people.

“The reason why many young people are engaging in informal jobs is because of failure to secure formal jobs and this should not be seen as normal, employment is not created in the streets,” said Mugaga.

“A visit to most of the industries in Zimbabwe will illustrate the level of unemployment in the country.”

It is impossible for the country to have 90% unemployment when the economy is operating below 48% in terms of capacity utilisation, Mugaga said.

Economist John Robertson said the unemployment rate remained high, with less than 900 000 people formally employed out of 13 million.

“It is very unfortunate that the government defines employment as informal jobs, yet most people involved in informal activities would prefer to get a formal job with a steady stream of income,” Robertson said.

He added that people in the informal sector were hard-pressed to access bank loans because they naturally did not have the necessary paperwork to access credit lines.

“The majority of the people who constitute the informal sector are deprived and have serious disadvantages because whenever one needs a credit facility, a payslip is needed, but these informal traders on the pavements do not have such documentation,” Robertson said.

“Unless Zimbabwe takes austerity measures to address political and economic problems that continue to stress its economy, the country’s unemployment rate will continue to escalate,” he added.