In an economy where the unemployment rate is more than 80 percent, every person who is currently looking for a job is now knocking on the doors of the private sector. In other words, the government has ceded its ‘employer of last resort’ function to the private sector.
The question is – what is the government doing to assist the private sector?
Studying in vain
Although the economy has been growing steadily since 2009, have we managed to create jobs that are commensurate with those growth rates? I doubt it. Many firms have resorted to employing capital and shying away expensive labour – so much for the growth with jobs initiative.
The high unemployment levels, especially among the youth, remain a major challenge in the development process. Young people are beginning to wonder if they are studying in vain, considering that those who have graduated nearly half a decade ago are still roaming the streets.
Given the appalling levels of our joblessness, we really should be giving ourselves ambitious targets of creating jobs across the economic spectrum and taking stock of our progress on a regular basis. Each job created is like a seed of economic progress planted today, to sprout, bud, flourish and bear fruit in the near future.
The creation of jobs contributes to lower unemployment, which is a key macroeconomic fundamental. The current economic situation demands urgency and real job creation should be the focus. How can our ailing job market be cured and what can be done to promote more jobs and descent work across the country?
We need job creation strategies that fit squarely within the fiscal bounds of the political climate today in Zimbabwe. If we want to think about job creation, we have to begin thinking about what’s happening right now.
What is happening now?
We are creating jobs outside the country by exporting raw commodities to be value added abroad. Our laws on indigenisation do not augur well with our need to attract foreign investment to capitalise existing operations and create new jobs. The labour laws are also working against the private sector’s efforts to create sustainable jobs. The government’s top-down economics on the subject of job creation has so far not demonstrated a moral obligation to make things brighter for the next generation.
What is our plan? The unemployment rate in the US is less than 10 percent, but the authorities there are on their feet trying to create jobs for the 23 million people who are looking for employment.
There are currently many impediments to doing business in Zimbabwe. We really should refocus our attention on growing the private sector. The private sector participates in economic activities out of self-interest. If that self-interest is taken away, there remains no incentive for them to participate.
There really is a need for an environment that sparks self-interest and encourages private sector participation and development. The general freeze on recruitment of staff into the public service means that our hope is now pinned on the private sector to create jobs for the unemployed. The government should urgently come up with measures to assist the private sector to create jobs.
Tax cuts
Tax cuts will certainly do the trick of helping small businesses grow and hire more workers. However, this should be only extended to firms with a concrete plan to create more jobs. It is also imperative to prevent further job losses, through downsizings or company closures, by developing ‘red flag’ systems that monitor the financial health of private sector firms on an ongoing basis.
The job creation exercise will not achieve anything if massive layoffs are taking place at the same time. It is also critical for the Zimbabwe Manpower Development Fund to be managed and administered in a manner that fully utilises its role in skills development.
The decade of economic meltdown, which shed most jobs in the economy, was not created overnight, and won’t be solved overnight. The economy requires a job stimulation package, possibly created through the transfer of funds from the National Social Security Authority.
There is also need to fast-track youth loans, SMEs facilities and other loan facilities from banks, which are still not exhausted, so that private sector undertakings can be boosted. It is also no doubt that private sector firms should be helped to export to increase local production since it would be also catering for the export market. The government should also ring-fence a fraction of corporate taxes to create an employment fund that can be accessed by private sector firms which have concrete plans to create jobs.
Post published in: Business