An ILO commissioned study analyzes Zimbabwe’s labour market sector
A report on potentials of employment creation explores the nature of economic recovery and structural transformation that are needed to address the employment deficits in Zimbabwe.
ILO News (Harare): A group of policy makers, various civil society groups, UN agencies and development partners gathered together on on 2 June 2016, to discuss a study that was commissioned by the ILO Country Office for Zimbabwe and Namibia, to the Labour and Economic Development Research Institute of Zimbabwe (LEDRIZ).
The report titled Employment Creation Potential Analysis by Sector, explores the nature of the economic recovery and structural transformation that are needed to address the employment deficits in Zimbabwe, indicating sectors with potential for employment creation. The study also projects the number of jobs that could be created, if key reforms are undertaken in the identified sectors that drive Zimbabwe’s economy.
There are a myriad of factors working against growth of the economy and impacting negatively on employment. According to the National Competitiveness Report, the key challenges are policy uncertainty and inconsistency, lack of funding, corruption, inefficient government bureaucracy, inadequate infrastructure, a 45 percent overvalued exchange rate, numerous processes and gridlocks that delay registering and operating a business (90 days to follow processes and be fully compliant).
Furthermore, the country faces structural and infrastructural bottlenecks, such as high debt overhang, liquidity crunch, erratic power and water supply, outdated industrial machinery, high cost of capital (or lack thereof), and widespread company closures. This has seen the country experiencing de-industrialisation and the informalisation of the economy, which has made it uncompetitive, both at the regional and global markets. To unleash sustained growth and employment creation, the most binding constraints should be addressed.
The sectors that could realize growth – agriculture, manufacturing, tourism and mining - have failed to rise up to expectations, in terms of job creation. Despite an average economic rebound at 10% per annum between 2009 and 2010, that growth has not translated into jobs and consequently has failed to impact on poverty. The mining sector that has accounted for over 50% of both foreign-direct investment and exports since 2010 only contributes 3% of total formal sector employment - a paltry 36 000 formal jobs.
Zimbabwe has achieved the highest literacy in Africa at 94 per cent. Unfortunately, this huge potential is on the verge of going to waste as it has not been translated into relevant employable skills that would benefit the country. According to the 2014 Labour Force and Child Labour Survey, 83.3 per cent of the employed population was unskilled, while only 5.4 per cent were skilled and 4.9 per cent were professionals. The skills mismatch is largely due to the absence of a national skills development policy, coupled with an educational curriculum that has not been reviewed for over thirty years, compounded by inadequate learning and teaching materials. This has created a gap in human resources to transform the economy. This has been exacerbated by the out-migration of an estimated 2 – 4 million Zimbabweans, who now live and work in the Diaspora.
The lack of transformation in the economy and the dissonance between the available skills for the existing industries has resulted in limited capacity by the country to absorb the new entrants into the labour market. While this is also largely attributed to the failure to resolve the dual and enclave nature of the economy inherited at independence, the doing business environment, which is critical for sustainable enterprises and employment creation, has deteriorated over the years. According to a World Bank Group’s Doing Business Report 2015/16, Zimbabwe is ranked at 155 out of 189 economies on ease of doing business. Further, the weak implementation of employment friendly policies, including the National Employment Policy Framework (NEPF) has seen the scourge of unemployment and under-employment leading to endemic poverty.
The report calls for a paradigm shift in the manner in which employment and social goals are targeted and urging the government to place full and productive employment and decent work at the centre of all economic and social policies. Under the Sustainable Development Goals (SDGs), employment creation is now at the centre of the development discourse and is viewed as the nexus between growth and poverty reduction.
The discussions that followed the presentation resulted in a number of recommendations:
The report titled Employment Creation Potential Analysis by Sector, explores the nature of the economic recovery and structural transformation that are needed to address the employment deficits in Zimbabwe, indicating sectors with potential for employment creation. The study also projects the number of jobs that could be created, if key reforms are undertaken in the identified sectors that drive Zimbabwe’s economy.
There are a myriad of factors working against growth of the economy and impacting negatively on employment. According to the National Competitiveness Report, the key challenges are policy uncertainty and inconsistency, lack of funding, corruption, inefficient government bureaucracy, inadequate infrastructure, a 45 percent overvalued exchange rate, numerous processes and gridlocks that delay registering and operating a business (90 days to follow processes and be fully compliant).
Furthermore, the country faces structural and infrastructural bottlenecks, such as high debt overhang, liquidity crunch, erratic power and water supply, outdated industrial machinery, high cost of capital (or lack thereof), and widespread company closures. This has seen the country experiencing de-industrialisation and the informalisation of the economy, which has made it uncompetitive, both at the regional and global markets. To unleash sustained growth and employment creation, the most binding constraints should be addressed.
"The Southern African labour market is characterised by low productivity and low productivity growth…..there is need to increase the quantity and quality of work and to create a tightening effect on the labour market. In short: too few jobs are available for too many job-seekers in the market. This results in unemployment, low wages, and overall bad conditions for the majority of workers. Increasing job creation requires focusing efforts on sectors, value chains and enterprises with potential for growth. Improving working conditions inspires improvements in productivity. There is need to have targeted efforts for women, youth and the working poor" - Bernd Muller (ILO Employment Specialist, DWT Pretoria)
The sectors that could realize growth – agriculture, manufacturing, tourism and mining - have failed to rise up to expectations, in terms of job creation. Despite an average economic rebound at 10% per annum between 2009 and 2010, that growth has not translated into jobs and consequently has failed to impact on poverty. The mining sector that has accounted for over 50% of both foreign-direct investment and exports since 2010 only contributes 3% of total formal sector employment - a paltry 36 000 formal jobs.
Zimbabwe has achieved the highest literacy in Africa at 94 per cent. Unfortunately, this huge potential is on the verge of going to waste as it has not been translated into relevant employable skills that would benefit the country. According to the 2014 Labour Force and Child Labour Survey, 83.3 per cent of the employed population was unskilled, while only 5.4 per cent were skilled and 4.9 per cent were professionals. The skills mismatch is largely due to the absence of a national skills development policy, coupled with an educational curriculum that has not been reviewed for over thirty years, compounded by inadequate learning and teaching materials. This has created a gap in human resources to transform the economy. This has been exacerbated by the out-migration of an estimated 2 – 4 million Zimbabweans, who now live and work in the Diaspora.
The lack of transformation in the economy and the dissonance between the available skills for the existing industries has resulted in limited capacity by the country to absorb the new entrants into the labour market. While this is also largely attributed to the failure to resolve the dual and enclave nature of the economy inherited at independence, the doing business environment, which is critical for sustainable enterprises and employment creation, has deteriorated over the years. According to a World Bank Group’s Doing Business Report 2015/16, Zimbabwe is ranked at 155 out of 189 economies on ease of doing business. Further, the weak implementation of employment friendly policies, including the National Employment Policy Framework (NEPF) has seen the scourge of unemployment and under-employment leading to endemic poverty.
The report calls for a paradigm shift in the manner in which employment and social goals are targeted and urging the government to place full and productive employment and decent work at the centre of all economic and social policies. Under the Sustainable Development Goals (SDGs), employment creation is now at the centre of the development discourse and is viewed as the nexus between growth and poverty reduction.
The discussions that followed the presentation resulted in a number of recommendations:
- That there is need to come up with national ‘labour market dialogues’;
- Lobbying and advocating for jobs backed by a better understanding of labour market issues, including informality and the source of jobs;
- Sharing good stories to encourage/demonstrate to other players;
- Create a database for jobs and opportunities under employment services;
- Highlight skills mismatch and develop a strategy for skills development;
- Inclusive business models – i.e. ensuring inclusion of vulnerable groups by procuring from their enterprises;
- Target productivity in small enterprises and cooperatives, as well create networks and clusters for such enterprises;
- Analyze skills gaps, policies and institute pilots that can be replicated nationally; and
- Establish public-private partnerships in infrastructure development and related value chains.