Zimbabwe lost a potential investor from India due to high labour costs in the country, the Confederation of Zimbabwe Industries (CZI) has said.
BY MTHANDAZO NYONI The investor wanted to set up a call centre and employ 2 000 people, but was chased away by the high minimum wage, CZI president Busisa Moyo told the ongoing Local Government Economic Development Forum 2015 in Bulawayo on Tuesday.
He said the country, under the economic blueprint, Zimbabwe Agenda for Sustainable Socio-Economic Transformation, could create 2,2 million jobs by 2018, but that was premised on labour costs.
“This is very possible. It’s not a big problem to create those jobs in three years. I believe it’s achievable. It all depends on what price your labour is. Your price of labour will determine the number of jobs you create. There are companies that are waiting to set up factories in Zimbabwe. Their challenge is not indigenisation (but) cost environment,” Moyo said.
“We talk to them (investors)…they like Zimbabwe, but the problem is labour costs. We had a discussion with a gentleman from India. He wanted to set up a call centre to employ 2 000 people. We’ve got the warehouse here in Bulawayo where he was going to set up. Our telephone service was not top-notch, but he was willing to live with it. His problem was the minimum wage in the ICT (information communication technology) sector. This is what killed the deal.”
Moyo said Zimbabwe had the highest minimum wage in the region of $246. He said Malawi has a minimum wage of $30, Botswana $105, Mozambique $112, Tanzania $125 and Zambia $132.
He said the higher the minimum wage, the higher the unemployment.
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“In Malawi the unemployment rate is 6%. If you want to emerge as an economy (or) get out of poverty, you have to deal with minimum wages otherwise the unemployment is going to stay there,” Moyo said.
He said there was urgent need to correct the major cost drivers in the economy to reduce the cost of doing business adding that Zimbabwe had become unattractive for prospective investors due to its costs of doing business which were above those obtaining in the region.
