By Hilary Chilala Hazele
Recently the Permanent Secretary, Ministry of Labour and Social Security, Mr. Trevor Kaunda launched the ZIPAR Flagship project called 'More and Better Jobs'. The Executive Director for the Zambia Federation of Employers (ZFE), Mr. Harrington Chibanda sits on an Advisory Group which will guide this project in the next 18 months. One key aspect of ZIPAR's project is its desire to reach out to business to help find solutions to some of the greatest challenges that Zambia faces: high levels of unemployment and low productivity among the employed.
No one can deny the scale of the unemployment challenge in our nation, averaging 8%, with this figure rising considerably. For businesses low levels of productivity and underemployment is also a big issue. Left unchecked the problem is bound to get worse. As a nation we can only compete internationally if the jobs created are more productive. In a paper published on the launch of the More and Better Jobs project, ZIPAR argues that 'business as usual' will see the number of unemployed grow to over three quarters of a million by 2030.
There is no doubt that the private sector is essential to responding to this challenge. It is the engine of economic growth and the primary source of job creation. People working for private businesses accounted for over half (53.3%) of all employed people in 2012. The majority of the remainder – around four in ten – was engaged in private household employment while Central Government accounted for a meager 4.3% of the employed population. Without listening to the concerns and ideas of business, Zambia will fail to respond to the jobs challenge.
The good news is that our country has a growing number of innovative and ambitious business leaders and entrepreneurs. Many are already expanding successfully and taking on more employees. But most would also agree that there is potential to do more. They are anxious to become more profitable and be a big part of the solution to creating more and better jobs. However, it is very important to remember that even these local entrepreneurs will not create jobs for the sake of solving the problem. Jobs created by them will have to be products of their businesses growing as they endeavour to take advantage of the increasing opportunities to expand their profits.
The employers we represent often face challenges in trying to grow their businesses. Whether it is limited access to finance, the constraints created by poor infrastructure, onerous labour market regulations or the low skills of many young Zambians, they understand the issues better than anyone. They have witnessed many attempts by policy makers to solve these problems in the past and they have important insights into what has worked or not and why.
Importantly it is necessary to understand the perspectives of different forms of business; the challenges faced will differ according to sector, location and size of the company. The policy ideas and strategies developed must be tailored to respond accordingly.
For example, larger established companies are vital; Zambia needs more of such because they employ workers in the formal sector and have the potential to create more productive and better quality jobs. But the particular barriers they face need to be addressed. A past survey by ZIPAR found that manufacturing, construction and mining industries listed the cost of in-house training to upgrade the skills, the level of legislated severance benefits, and the minimum wage all acted to reduce the likelihood that they would take on more unemployed youths.
The obstacles faced by smaller enterprises are different. According to the 2010 Zambia Business Survey, Micro, Small and Medium Enterprises (MSMEs) account for 99% of the total number of businesses operating in Zambia; they employ 56% of total full-time employees; and generate 35% of annual national business turnover. They too face challenges around access to finance and skills. But particular issues include the cost and ease of formalization. One underlying question is whether existing policies for small businesses are based on a sound understanding of the nature of self-employment in Zambia.
Responding to the jobs challenge means understanding the perspective of the private sector whether it is larger companies eager to expand into new markets or innovative small enterprises looking to grow. Combining the practical experience of business with the analytical rigour of an organisation like ZIPAR promises to help generate a set of ambitious and practical policy proposals. That is why it is gratifying that ZIPAR will be listening to business as its project develops.
Along with others from the private sector, representatives from civil society, academia, government – including the Ministry of Finance and the Cabinet Office are part of the flagship project advisory group.
There are few bigger challenges for our nation than giving every Zambian the opportunity to fulfil their potential in a decent job. But we anticipate that we will play our part as this important ZIPAR project identifies potential solutions for creating more and better jobs.
The author is a Manager- Economic and Policy at the Zambia Federation of Employers.