Zim unemployment at 70%
By Eric Chiriga
Saturday, 16 April 2011 13:50
HARARE – Zimbabwe’s unemployment rate remains very high at 70 percent, with
only 850 000 people formally employed out of a 12 million population, a
leading economic researcher has said.
Economic analyst John Robertson said the number of formally employed
Zimbabweans is equal to that of 1970.
“Since 1970 Zimbabwe’s population has more than doubled which means the
working populace should have more or less doubled. The country’s economy
remains distressed,” Robertson said.
Robertson said had economic activity and capacity utilisation significantly
improved, the formally employed should have been around 1, 4 million.
“Formally employed people used to be way more than 2 million when Zimbabwe’s
economy operated at optimum capacity.”
According to United Nations office for the Coordination of Humanitarian
Affairs (OCHA) Zimbabwe’s formally employed stood at 3, 6 million in 2003.
Robertson said one third of the 850 000 formally employed were civil
servants, indicating that industry, particularly manufacturers, and
corporates had no capacity yet.
Zimbabwe’s economy remains fragile, with business and industry capacity
utilisation depressed due to liquidity crisis and poor foreign direct
investment flow.
In recently published financial results, corporates raised red flag over
soaring staff costs against thin business volumes with most resorting to
retrenchments, effectively increasing the unemployment rate.
Financial institution FBC Holdings Limited retrenched at a cost of US$3, 5
million while
Barclays Zimbabwe – among Zimbabwe’s top four banks – also shed 206 of its
workforce.
ZB Financial Holdings also retrenched at a cost of US$425 000.
President Robert Mugabe government’s indigenisation policy – demanding 51
percent shareholding in all foreign-owned firms worth at least US$500 000 –
has dampened foreign investor confidence in the country.
“Government needs to formulate policies that promote investment thereby
creating employment,” Robertson said, adding that the greater the number of
employed populace the more tax revenue government collects.
Last year Zimbabwe’s unemployment rate was estimated at 94 percent, meaning
that fewer than half a million people in the country were formally employed.
OCHA said at close of 2008 – at the height of Zimbabwe’s economic meltdown –
only 6 percent of the population was formally employed, down from 30 percent
in 2003.
OCHA said out of the country’s 12 million people, only 480 000 had formal
jobs in 2008.
Zimbabwe’s once-dynamic economy shrunk by more than 50 percent between 2004
and 2009, leaving more than half of its employable urban population relying
on remittances from friends and family overseas.
An estimated three million Zimbabweans fled the country’s economic and
political instability, to support their families from overseas and
neighbouring countries.
More than half of Zimbabweans remain in the diaspora as jobs prospects
remain limited in the country.
Recently South Africa gazetted that Zimbabweans working in the country, at
least two million, should apply for work permits.
This came after reports that SA nationals were complaining that Zimbabweans
were taking most of the jobs.
An International Labour Organisation (ILO) report on global employment
trends released in January this year said more than 1, 5 billion people –
half the global working population – were in vulnerable or insecure jobs.
The report said despite a relatively robust pick-up in growth during 2010,
economic recovery made virtually no dent in the unemployment caused by the
worst recession in the global economy since world war two.