International Youth Foundation (IYF) believes the formal sector is fast getting phased out in Zimbabwe and that 80% of employment in the country is now found in the informal sector.
BY TATIRA ZWINOIRA
Employment in Zimbabwe continues to remain one of the worst hit by the current economic conditions. According to IYF statistics, there is a 67% employable labour force in the 15 to 35 years bracket — people that are unable to get employment opportunities.
In July 2015, a ruling from the Supreme Court, allowing employers to fire employees on three months’ notice saw an estimated 10 000 lose their jobs before a revision was made to the Labour Act.
IYF director, Pamela Chiromo said in an interview last week that the way to raise employment levels in the country was to look at growth sectors.
“I think when you look at the employment sector, 80% are really informal and so as IYF, we try and address the entrepreneurial skills in that sector because we believe that is where most of the employment in this country is taking place. I think there is room for improvement, so one of the things that we do is to look at growth sectors,” Chiromo said.
“We feel that when we bring those [youths] on board and start generating ideas, we have to point them in the right growth sectors as entrepreneurs. So if they take those up, it will significantly help them with chances of having viable employable businesses that give them meaningful income and will really contribute to their livelihoods. She said a study showed that there were a number of areas such as ICT, agriculture, mining and tourism that could offer employment opportunities.
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The informal sector is now contributing an estimated 70% of the gross domestic product (GDP) and analysts have predicted the sector would make more contributions to the GDP.
As such, the informal sector is slowly swallowing the employable workforce in the country as everybody tries to make a living.
Having the right entrepreneurs in the sector would enable the creation of a multiplier effect, which would see more people being employed.
A well-known business consultant from the United Kingdom, Malcolm McDonald said there was potential for entrepreneurial growth in the country.
“The world is the same everywhere. About 95% of British companies are SMEs and they account for 65% of employment.
They are supported by the government. Wherever you are, it is the small-to-medium enterprises that represent the future. The future for all of these companies is in entrepreneurship and innovation because you have got a growing middle class. I think Zimbabwe is going to be great,” McDonald said.
However, most of those employed in the informal sector as entrepreneurs, although over-qualified, might lack the skills required.
Saadat Khan, the chief executive officer for Inbox Corporation, a company that studies market trends and creates brand awareness, said sustainable growth was about “achieving scale and that scale starts in the mind as we have no shortage of entrepreneurs.”
Such entrepreneurs, as explained by Buy Zimbabwe vice-chairperson Oswell Binha, would have to be pragmatic, disciplined and forward-thinking.
“What we have decided to do as Buy Zimbabwe is to approach our institutions of higher learning to provide impetus of development, not only for management, but for leadership into the future. People who are employable, who will be able to get positions of responsibility, but also to create future leadership, people who are confident and pragmatic in making decisions for national interest,” Binha said.
“The job market is very constrained at the moment. It is not only employment, but it is also entrepreneurship. You want to get people who are created in such a manner that they have got the qualities of personal entrepreneurial competencies as a basis around which someone can go and do enterprise development.
“We cannot stop because the economy is on a downward trend. Our circumstances can easily be twitched on a stable upward trend. We need to create an adequate human capital base and competent entrepreneurs to tackle Zimbabwe forward.”
According to data from the National Social Security Authority, 55 443 employees lost their jobs as a result of 4 610 company closures between 2010 and 2014.
The benefit of entrepreneurship is the ability to have a business which uses a cash-based system as the informal market is beginning to dictate.
The pull of these over-qualified individuals into the informal sector is the allure of being able to make hard-earned cash, instead of waiting for the bureaucracy rampant in companies who dish out money on a monthly basis.
