Unemployment still high in Zimbabwe

The following story from a respected economic analyst shows the scewed economics of Zimbabwe. Only 30% of the population are formally employed and heavily taxed, while the rest of the population is either making a living through other means such as cross border trade, reliance on support from relatives abroad etc. 

Zim unemployment at 70%

http://www.dailynews.co.zw

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.

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5 Responses to Unemployment still high in Zimbabwe

  1. unemployment in Zimbabwe is still high. The major reason towards this phenomenon is that people are lacking access to information to develop themselves in terms creating employment for themselves. Its is very unfortunate that most of us were schooled to look for employement after completing high school or tertiary eduaction. The information practitioners have great job in letting people have access to information and knowledge. Over 70% of the Zim population leaves in rural areas and it is the rural areas that supplies the human capital to the cities and towns. we should move from this paradigm shift where resources centres are only concentrated in urban areas.

    My recent visit to the rural areas revealed that most of the rural folks lack access to information that improve their daily lives. Even with the improvement of access to network like econet and netone . Rural people are still legging behind this fastinating ICT driven economies.

  2. kee says:

    For crying out loud stop this nonsense,there aren’t enough jobs to go around. a new way of thinking is needed.job seekers should become job creators.surely it makes sense.If the job seekers do not know where to start, get in touch with infinityworx they sell very affordable biz opps to people you choose what you think you wud be good at.their email is infinityworx@gmail.com

    • it seems like there are jobs and a lot of them at http://www.zimbabwehumancapital.org/home
      are these getting filled?
      If not what is blocking people from working?
      this 94% unemployment rate that has been circulating around the internet cant be accurate….

      • ZLDT says:

        The unemployment issue is a hot topic indeed. If you are in Zim, go to Employment Exchange to see how many unskilled people are looking for jobs. Even “O” level holders are now working as house maids! However thank you for sharing the link – we need ideas on how the un-employed can be helped or supported to find the jobs. Regards, ZLDT Editor.

  3. What’s up, the whole thing is going perfectly here and ofcourse
    every one is sharing facts, that’s actually good,
    keep up writing.

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