Can 2021 deliver Zim youths expectations?

Zimbabwe’s economy is being ravaged by the Covid-19 pandemic, a youthful nation with approximately 67,7 percent of its 13 million population under the age of 35. Most of these youths face challenges that have been exacerbated by Covid-19 such as a high level of unemployment, limited education opportunities as well as poor-quality education, limited access to quality health services, low participation in economic and political spaces, limited civic engagement opportunities, teenage pregnancies and early marriages.

Tariro Chivige

This has forced most young people into drug abuse and also political violence as most political elites take advantage of these unemployed youths to set their political agendas. The spread of Covid-19 and the uncertainty around its containment is narrowing the hopes of a revival of economic activity and has further disrupted labour markets. With the second wave striking Zimbabwe, it’s almost a year now without any proper physical school classes, and vocational education/skilling opportunities have gone defunct. Issues such as mobilisation of jobs, Fourth Industrial Revolution skills, and social security, just to mention a few, must take centre stage in policy discourse. By the mere fact that the youths, constitute the bigger part of the population, it is their life chances and opportunities that have been most disturbed by this merciless pandemic.

What was promised?

In October 2020, while presenting the 2021 Pre-Budget Strategy Paper, Finance and Economic Development Minister Professor Ncube indicated that Government was going to prioritise youths and women empowerment by capacitating their banks and the National Venture Fund in order for them to play a bigger role in funding small businesses. The NDS1 was expected to find measures to support the youths and women. Among his promises, he said the following statements:

“Youths and women will be primary empowerment and job creation targets in as much as they are the majority who make an important contribution as productive workers, entrepreneurs, consumers, and agents of change”

“The country stands to realise demographic dividend by harnessing the youthful populace to productive use through inclusive growth. In that regard, 2021 Budget will further support and broaden the Youth Employment Tax Incentive (YETI), as well as capacitating empowerment institutions such as the Women and Development Bank, Zimbabwe Women Microfinance Bank, Community Development Fund, Empowerment Bank and SMEs institutions”

“National Venture Fund is coming in 2021. It will fund the national youth’s fund where they can go and borrow money, that I would want to call equity to develop their businesses,”

“Government recognised the importance of building the necessary environment, infrastructure and relationships for developing youths, sport, arts, recreation, and diversity of culture”

2020 performance

The government claims to have taken several measures in 2020 to address some of the youth’s challenges, however there is still a long way to go. Among the measures purported to have been taken include the establishment of a National Venture Capital Fund to the tune of ZWL$500 million, the YETI, improvement in financial inclusion through the implementation of the 2016 National Financial Inclusion Strategy, supporting empowerment programmes for SMEs, youths, artists and sports, through respective financial institutions and capitalisation of empowerment institutions such as Women Development Fund, Community Development Fund, Zimbabwe Women’s Microfinance Bank, EmpowerBank and Small and Medium Enterprises Development Corporation (SMEDCO). However, taking a closer look at things on the ground, an analysis of the previous budgets show that Zimbabwean Government’s spending on youth-focused initiatives has been declining in United States Dollars terms, despite the fact it has a young population as has been alluded to earlier.

Analysis of the performance

The spending on education especially on science, technology, engineering, and mathematics (STEM) has contracted in the past three years. The Ministry of Higher and Tertiary education having realised a lack of skills, has been focusing on bridging the skill gap and this has mainly been done by introducing the new curriculum Education 5.0. It is now demanded of the nation’s higher and tertiary education sector to not only to teach, research and community serve, but innovate and industrialise Zimbabwe.

Under Education 5.0, Zimbabwe’s state universities must launch into outcomes-focussed national development activities towards a competitive, modern and industrialized Zimbabwe. It is now all about problem-solving for value-creation. This will help to harness the youthful populace to productive use through inclusive growth. Zimbabweans may be literate but without fourth industrial revolution (4IR) skills the future of the youth is doomed. While there is a focus on increasing job opportunities for young people by the National Venture Capital Fund and other initiatives stated above, reality suggests that economic & political challenges and the Covid-19 pandemic seem to be reversing all the efforts. Most programmes tasked with enabling and improving employment have seen limited success, our industries are dying and are believed not to even reach below 50% operating capacity. This season, all eyes are now set on agriculture as the rains are expected to be normal to above normal.   If anything, the pandemic has highlighted the need to build the resilience of the youth and to place their concerns at the centre stage of policy discussions because the future is theirs.

2021 Budget allocations for youth

In response to his promises during the presentation of the BSP as empowerment initiatives, the 2021 Budget set aside US$37 million for youths through the National Venture Fund to encourage entrepreneurship by youths and women, and to help start-ups to grow and generate new employment opportunities as this will stimulate economic growth. In addition, an allocation of ZWL$1 billion was set aside for supporting empowerment programmes for SMEs, youths, artists, and sports, through respective financial institutions such as EmpowerBank, Zimbabwe Women Microfinance Bank, POSB, and SMEDCO. Furthermore, the 2021 Budget reviewed and extended the Youth Employment Tax Incentive (YETI), the tax credit was increased by 300% from ZWL$500 to ZWL$1 500 per month for each employee hired, and the limit on the maximum credit was increased by 300% from ZWL$60 000 to ZWL$180 000 in a year of assessment. With youths in mind, ZWL$3.4 billion was allocated to the Ministry of Youth, Sport, Recreation, Arts and Culture. Moreover, through the 2021 Housing Development Interventions, the government intends to build Youth Training Centres and it has allocated $326,400,000 for that project.

The way forward

If Zimbabwe is to take advantage of its young population, it must support it, especially in this ruthless pandemic, there is need for more effort towards youth-focused interventions. The 2021 budget may bring hope to other sectors of the economy, however the youth strong focus and prioritisation mentioned by Finance Minister Professor Mthuli Ncube in October 2020 is missing in the budget. The allocations specifically meant for the youths are concentrated on National Venture Capital Funds which did not take off in 2020 as expected. It’s not about figures, but allocated funds must be disbursed because sometimes these allocated funds do not reach the youths.

There is also need for awareness about these funds because a lot of young people are not aware of these funds or they think they are partisan. The industries are not performing well and with the reintroduction of lockdowns, the situation will be worsened. There is a need to come up with youth-focused initiatives that embrace the 4IR. The Minister must accept that Zimbabwe is highly informalised and Covid-19 may be here to stay, therefore there is need for youth focused policies which consider that. The YETI may not benefit youth as companies continue to retrench employees to sustain operations in a depressed economic environment and does not benefit the informal sector where most youth are working.  There is also need to do monitoring and evaluation of the current initiatives for youth, to see if they are inclusive. Are they leading to youth development and employment creation or it’s just a talk show?

The recent increase in presumptive tax is seen as punitive by youth as formalisation is not as easy as the Finance Minister may think. There is need for increase of social protection spending, clear youth allocation in the stimulus package and increase investment in technology for youth digital skill in this 4IR. Lessons can be taken from Rwanda when it comes to 4IR youth-focused initiatives such as Smart Africa which is aimed at accelerating the continent’s digital transformation through a series of projects & activities. The upcoming budget review unfortunately to be conducted mid-2021, will be a small window of opportunity to bring focus to this segment and to bridge the chasm that has crept in terms of access to opportunity due to the pandemic.

In conclusion, young people must not just wait for budget events to air out their views. They should keep pushing, speaking to the parliament and other institutions likely to take up their concerns. The youths are the majority and they can make important contributions as productive workers, entrepreneurs, consumers, and agents of change.

Tariro Chivige* is an Economist.

These weekly New Horizon column is coordinated by Lovemore Kadenge, an independent consultant , past president of the Zimbabwe Economics Society (ZES) and past president of the Institute of Chartered Secretaries & Administrators in Zimbabwe (ICSAZ) . Email – kadenge.zes@gmail.com and mobile  – +263 772 382 852