“Ask five economists and you’ll get five different answers — six if one went to Harvard. —-Edgar R Fiedler Opinion by Phillip Chichoni
There have been debates and comments in the past weeks on whether it is possible to create a million jobs in Zimbabwe over the next five years. Many economists and analysts interviewed by the various media say it is a dream. In other words, it is impossible.
When Marconi told people that he was developing a device that would enable communication between long distances without the use of cables, many thought he was insane and that it was impossible. But we have wireless communication now. People have always laughed and scorned at visionary people saying they are dreaming. History has shown that nothing is impossible if one is committed and passionate towards achieving it. And that the greatest achievers started as great dreamers.
Instead of analysing how impossible something is, why not look at how we can make it possible? In this case, let us look at the job creation mission in Zimbabwe.
How many people are unemployed in Zimbabwe? The starting point is to look at how many people are actually unemployed. In the United States and Europe, unemployment is measured by the number of people who are registered for unemployment benefits while seeking jobs at any given time. So you find that every month or quarter, the government releases unemployment figures.
We do not have an unemployment register. Instead, the figures are estimated by various people and range from 50% to 90% unemployment. Now if 90% of the people were unemployed and the state gives no unemployment benefits, that means the majority of the people would be starving and destitute. But they are not.
We have a very high level of informal business activity in this country. It employs a large majority of the “formally unemployed” people. In many cases, it even pays more than formal employment. I have spoken to many informal business owners, like vegetable sellers and clothing traders. Many generate revenues above the US$5 000 a month VAT threshold, with some making as much as US$20 000 in good months, like during the festive season or when the new school year begins. A good number support over six dependents and they live well. So should these people be counted among the 90% unemployed?
Great depression solution— public works When the great depression of the 1930s devastated industry in the US, unemployment reached record high levels. To solve the problem, the government started public work programmes: constructing roads, bridges and other massive state-sponsored infrastructure projects. These created lots of jobs and helped the economy start recovering.
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A similar solution can work in Zimbabwe, but it needs huge financial investments. If the government manages to mobilise funds for infrastructure development, which the country desperately needs after decades of dilapidation, the work will enable businesses in the supply chain to recover and new ones developing. This will create jobs, and possibly over a million if the projects are big enough.
More practical solution — developing SMEs There are thousands of informal businesses operating in the country. Most are one-person outfits while others employ a few people each. Let us say, for argument’s sake, that there are a hundred thousand such informal businesses and SMEs. If each one employs one more person, that will create 100 000 jobs immediately. Five more people and that will be 500 000 new jobs. That is not impossible if the SMEs and informal businesses are growing.
To grow, most of these businesses need support. The majority of the owners lack essential business and financial management skills. As a result, they are not running optimally and efficiently to enable them to grow. Equipping the owners with essential business skills will improve their capabilities in building growing and profitable businesses, which will create employment.
Formalising these businesses will help them get contracts from the state and big companies, thus giving them opportunities to accelerate their growth. Many fear that formalising is an arduous and expensive process, but the government promulgated the Private Business Corporation Act specifically to enable informal businesses to incorporate simply and affordably.
A few weeks ago, the Harare branch of the Zimbabwe National Chamber of Commerce organised a workshop to train SMEs on essential skills. I helped in the training on record-keeping and business planning, while a representative from the SPB facilitated on how to participate in government tenders. The business owners who participated said they couldn’t wait for more such training.
Best wishes in growing your business.
Banks have a role to play
Banks could organise business skills training to customers they lend money to. This will help them run their businesses more proficiently, be more profitable and reduce chances of defaulting on their loans. The facilitation fees could be levied on the loans. That way we can all play a part in accelerating SMEs’ growth and creating new jobs.
- Phillip Chichoni is a strategic business planning consultant who works with entrepreneurs and growing businesses. You may contact him by email on:[email protected] or visit: http://smebusinesslink. com.
