CAUSES OF UNEMPLOYMENT IN ZIMBABWE

 

CAUSES OF UNEMPLOYMENT IN ZIMBABWE

By Wilbert Masamba.

Unemployment in Zimbabwe has largely been caused by political factors though other factors contribute at a lower level.

Economic Structural Adjustment Program

1. the 1990’s less developed countries adopted the Neo-liberal policies upon the advice of the World Bank and the IMF in order to stimulate economic growth by increasing free trade, privatization stiglizt (1994). This created an economic catastrophe in most countries. This is because local infant industries were exposed to stiff competition from other external industries. Therefore, most companies were forced to retrench or downsize at least to remain viable and profitable. For instance, In Zimbabwe the SAPs divested the economy as industries retrenched, lay off and others shut down due to competition from international players. ZCTU (1995) claimed that 55 000 jobs were lost by 1995, 22 000 public service employees were retrenched by 1995. The economy shrunk by 7.5% real wages for the few employed declined bringing the working class to the brink of widespread destitution. This inevitably led the retrenched workers to fall into poverty. Other scholars believe that this had a ripple effect as it also affected those who depended on the workers such as maids, cattle herders in rural areas also lost their jobs resulting in widespread unemployment and poverty.

Fast Track Land Reform

In a haste and ill-conceived desperate attempt to redress the old aged land question, the Zimbabwean government embarked on a Fast Track Land Reform programme (Moyo, 2012). In the process close to 1500 white commercial farmers lost “their land” to indigenous blacks. Thousands of farm workers lost their jobs and some migrated the Capital (Harare) joining the ranks of the urban poor in informal economic activities, as well as contributing to the growth of slums. Most of the job losses by former farm workers were concentrated among some regions (agro-ecological and provinces) and commodities. Job losses were mainly in the farms that produced commodities such as maize, beef, wheat etc. However, in the Eastern Highlands and the Lowveld where sugar, tea, coffee and forestry are located. These had a higher concentration of farm workers, and were largely not affected by the land acquisition programme and still retain most of their labour force.

Indigenization policy

The government of Zimbabwe adopted an indigenisation and empowerment policy which forced all companies to cede 51% shares to the local black people. The policy as claimed by ZCTU resulted in the closure of more than a 1000 companies resulting in de-industrialisation. This inevitably resulted in the proliferation of unemployment as most people lost their jobs and the newly graduates could not get jobs. Despite causing de-industrialisation, the policy also scared the potential investors who wanted to come and open businesses that would have created employment for the masses.

Poor macro-economic environment

Macro-economic policy refers to policies that affect the whole country and concerned about exchange rate, taxes, ………………………….. Macro-economic policy is important as it also influence investment. In Zimbabwe, macro-economic there has been poor macroeconomic policy, banks charge high interest rates (businesses cannot borrow to expand), high tax rates to businesses. This creates an unfriendly economic environment for businesses to expand and grow their operations and high more people. More importantly, poor macro-economic environment discourages investors to come and invest and start new businesses that create employment.

Sluggish (decline) investment and growth

This refers to the decrease in investment in the economy either by the government or private companies which lead to the shrinking of the economy. In Zimbabwe, sluggish growth has been caused by prohibitive conditions such as high input cost ( ), high interest rate (charged by banks to borrowers) and hard cash shortages. This inhibit companies invest, grow and create more employment. At the same time, these factors prohibit full operation of existing companies leading to the massive lay off of workers or companies closing operation. For instance, According to in 200…… 500 companies in Zimbabwe closed down due to prohibitive conditions thereby creating massive unemployment.

Unfriendly investment/business climate

Poor macro-economic environment compounded, sluggish growth makes Zimbabwe a less attractive and unfriendly investment destination for foreign companies to come and invest. Thus the more profitable the business climate, the more firms want to invest and expand. Investors establish businesses in countries where there are high chances of realising profits rather than lose and Zimbabwe has not been able to create that desirable climate for investors hence increased unemployment. Moreover, policies such as the indigenisation policy, workers share ownership trust (Ziminya and Marange), look east policy, political instability all worked hand in glove in making Zimbabwe an unfriendly investment destination and this increased unemployment.

Population growth

Since independence Zimbabwe has been experiencing population growth at a faster rate. This has been caused by increase in access to medical care, reduction in infant mortality and the general improved standard of living especially in the early 80’s and 90’s. Zimstats (2018) has indicated that sixty per cent of Zimbabwean population are youths. Therefore, unemployment in Zimbabwe is caused by a contradiction whereby there is a large army of young people who need jobs to survive, yet economy is not growing and creating more employment opportunities.

NB: There population increase without complimentary increase in job opportunities

Education system and unemployment

Zimbabwe inherited a colonial education system which was meant to create workers and not entrepreneurs. Since independence tertiary institutions have been churning out products without the mind-set to start businesses and create employments. This has created what has been called the employment syndrome where graduates from different tertiary institution all think of getting employed after school. This has contributed in increasing levels of unemployment since there are no creative and innovative people to create businesses that create employment. Moreover, there is a mismatch of skills acquired from tertiary institutions and the ones needed in the job market. This mismatch also results in high unemployment the masses of the unemployed lack the required skills to get employed.

Structure of regional economy

This refers to industries in a country being concentrated in a certain part region of the country. Since 2000 there has been massive de-industrialisation in Zimbabwe (closure of factories and industries). This has resulted in few industries being concentrated in the capital, Harare. Other cities and town such as Bulawayo, Shabani (Shabani-Mashava) Kadoma (David Whitehead) are almost ghost cities without industries leading to massive unemployment. Moreover, this also leads to Geographical immobilities (difficulty to move regions to get a job) as labour (people) in other regions may find it difficult to find suitable accommodation or schooling for their children, hence the people remain stuck and unemployed.