According to the International Monetary Fund (IMF), in its economic outlook for October 2023, Zimbabwe has been listed as one of the fastest growing economies in the Southern African Development Community (Sadc).
In the year 2022, the IMF highlighted that the Democratic Republic of Congo (DRC) and Seychelles had the highest economic growth rates in Southern Africa, circa 8.9% for both countries, followed by Mauritius with around 8.7% and Zimbabwe 6.2%.
Other neighbouring countries such as Botswana registered a 5.8% in economic growth while Zambia and Tanzania both registered a 4.7% growth rate, Namibia (4.6%), Mozambique (4.2%), Madagascar (4%), Angola (3%) and Lesotho (2.1%).
Against this backdrop, Zimbabwe’s apparent economic prosperity is marred by a concerning trend of jobless growth.
Jobless growth refers to a significant decline in employment growth despite output growth. It has been prevalent in Zimbabwe over the last few decades.
Despite the expansion of the nation's GDP, the unemployment rate continues to rise, leaving a significant portion of the population struggling to make ends meet.
This predicament is causing alarm among policymakers, economists, and the public, demanding immediate attention and sustainable solutions.
The unemployment rate in Zimbabwe, like in many countries, has been the subject of debate and controversy due to various factors influencing its calculation and reporting.
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This issue arises from discrepancies in defining and measuring unemployment.
According to the definition by ILO, unemployment refers to the share of the labour force that is without work but available for, and seeking employment.
ILO and ZimStats concur that unemployment rate in Zimbabwe was around 7% in the year 2022, however these statistics are not in tandem with the statistics provided by other civic organisations which state that the figure is as high as 90%.
There is no consensus on the actual figure of unemployment in Zimbabwe, it is indeed a contentious issue.
However, I think the challenge for Zimbabwe is not the quantum of employment but the quality of employment.
The 7% unemployment rate reported by Zimstats could be too low because the majority of the people employed in the informal economy would still count as employed under the new standards.
The majority of the population in Zimbabwe is employed in the informal sector which is characterised by low wages, poor working conditions, little or no social security and representation.
Zimbabwe faces a significant policy challenge of generating employment for its expanding labour force despite experiencing robust economic growth.
Although, the Zimbabwean economy is growing, the growth rate is too insignificant to cater for a large number of jobless people in the country.
An assessment of the access to quality employment is important in order to determine the ability of the country to create not only employment for men and women, but to do so in ways that increase incomes and decrease poverty.
A looming crisis
The jobless economic growth in Zimbabwe poses a severe threat to social stability and overall well-being.
This growth is largely fuelled by sectors that do not translate into meaningful job creation.
Mining and agriculture, for instance, have been pivotal contributors to this economic growth, but they employ only a fraction of the workforce.
Many Zimbabweans remain unemployed or underemployed, leading to income inequality and poverty for a substantial portion of the population.
The youth, in particular, are bearing the brunt of this crisis, with high levels of joblessness leading to frustration, disillusionment, and potential social unrest.
So the ability of Zimbabwe to continue to generate and sustain quality employment for its growing population is an important factor for securing the status of the upper middle-income economy by 2030 and indeed reducing poverty.
Factors behind the crisis
The primary cause for pervasive unemployment remains that the economic growth of the last decade has not resulted in significant and transformative job creation.
The growth of the labour force itself is also quite significant, the number of young people entering the labour market every year is larger than what the formal sector can absorb.
Some of these factors are -- rising capital intensity, lack of credit for small firms, and arguably labour market rigidities, which compel firms to hire fewer workers with the larger firms opting for the adoption of more labour-displacing technologies.
Further, insufficient infrastructure and foreign investment have hindered the development of labour-intensive industries that could create more jobs. Zimbabwe has been hit by massive brain drain over the last five years, and this exacerbates jobless economic growth.
Jobless economic growth could be attributed to the country’s inability to retain its highly skilled people, who are critical in creating the space for job creation for others, by innovating in the work place, creating their own companies that can employ others, or contributing to higher economic growth due to their high skills being used in policy formulation and public sector service delivery.
Addressing the problem of jobless economic growth in Zimbabwe requires a comprehensive approach.
Understanding how to foster increased job growth is fundamental for effective policymaking.
Thus, focus should be directed towards the following key areas; (i) Education and Skills Development: Investing in education and skills training programs to prepare the workforce for modern, technology-driven industries. (ii) Labour Market Reforms: Reviewing and reforming labour laws to make it easier for businesses to hire and fire employees while ensuring workers' rights and job security. (iii) Infrastructure Development: Focusing on infrastructure development to attract foreign investment and stimulate the growth of labour-intensive sectors. (iv) Investor-Friendly Policies: Implementing investor-friendly policies to rebuild confidence among domestic and foreign investors.
The way forward
Zimbabwe stands at a critical juncture, where economic growth is possible, but it must be accompanied by measures that ensure the benefits are shared by all citizens.
Jobless growth is a pressing issue that threatens the nation's stability and well-being.
With concerted efforts from the government, businesses, and civil society, Zimbabwe can transition to a more inclusive and sustainable economic path, where economic growth translates into job creation and prosperity for all.
The nation's future hinges on the ability to tackle the root causes of jobless growth and create an environment where businesses can flourish and employ a growing number of Zimbabweans.
It is imperative to diversify the economy by promoting industries beyond mining and agriculture, such as manufacturing and services, to create more job opportunities.
Further, tackling the escalating unemployment rates among the educated youths is key.
As such, efforts must be channelled to fortify the capabilities of our educated youth, priming them to adeptly navigate the ever-fluctuating demands of the service sectors. In doing so, Zimbabwe may find a path toward a more equitable and prosperous future.
- *Courage E Masona is an economist and lecturer at the Zimbabwe Ezekiel Guti University. Feedback:Email: [email protected]
- These weekly articles are coordinated by Lovemore Kadenge, an independent consultant, managing consultant of Zawale Consultant (Private) Limited, past president of the Zimbabwe Economics Society and past president of the Chartered Governance of Chartered Governance and Accountancy Institute in Zimbabwe . Email- [email protected] or Mobile No. +263 772 382 852