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NDS 1 can’t create adequate jobs: ILO

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A RECENT survey by the International Labour Organisation (ILO) has established that Zimbabwe’s economic blueprint, National Development Strategy 1 (NDS 1), has no capacity to create the envisaged number of jobs and should be fine-tuned if concrete labour market outcomes are to be realised.

NDS 1 aims to ensure macro-economic stability, promote private investment and create jobs, although current targets might fall short of what is needed to increase employment rates. According to the blueprint, the goal is to ensure that the economy can grow at least at 5% per year, driving the gross domestic product per capita to US$3 205 by 2025 on the strength of the expansion of the agriculture, manufacturing, mining, utilities and tourism sectors.

The government expects that the economy could create around 150 000 formal positions per year. But the ILO’s Labour Market Diagnostic Analysis (LMDA) report established that the current blueprint, which has already missed its growth projection for this year, cannot meet the set targets.

“Indeed, the NDS 1 treats jobs as a cross-sectoral theme, but in practice, there are no explicit links between the proposed initiatives and labour market outcomes.

 “One of the key questions over the short term is about how to manage the trade-offs between the need to have a balanced government budget and the need to stimulate the economy to accelerate the recovery and increase employment rates,” the report said.

The survey suggests that to be able to reduce the unemployment rate, the economy should be creating around 200 000 jobs per year, which would require growth rates above 7.5%. The LDMA observes that there are also several questions regarding the design and implementation of sectoral and regional policies, as to how to ensure that the reforms in the agricultural sector and the initiatives to promote value chains development and the growth of small and medium enterprises can accelerate the creation of formal employment and improve the quality of existing informal jobs.

Observes the LDMA: “There is a need to come up with more specific policies and reform programmes to operationalise the various proposals around labour policies, which are necessary to improve the quality of jobs and help connect workers to better employment opportunities.”

The report suggests that the government needs to offer incentives to key economic sectors with the potential to boost employment growth in the form of tax exemptions, grants, access to loans at preferential rates, or subsidised training, mentoring, technical assistance and access to inputs, among other key issues.

“Thus, in practice, Zimbabwe could be allocating a substantial share of public resources to programmes that might not have the expected results,” the survey said.

The report bemoans the fact that at a time, Zimbabwe needs to create 184 000 jobs per year in the next decade, in order to cut down the unemployment levels and informality bedeviling the nation, the job creation rate would decline slowly, from 2.6% per year today to 1.8 % per year.

“The findings of the LMDA indicated that increasing living standards and promoting economic and social development in Zimbabwe would first require improving employment opportunities.

“Economies grow when more people work and when each job in the economy becomes more productive. At the same time, households escape poverty when labour income, the main source of income for most households, increases,” the report added. — STAFF WRITER.

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