Biti is way off the mark

Zimbabwe at 9 percent is not just shocking but baffling.

The 9 percent is roughly below France and Spain’s jobless rate figures. Indeed, it was quite revealing when he was quoted at the official launch of the Poverty Income Consumption and Expenditure Survey arguing that unemployment statistics are overstated and have been incorrectly and inconsistently reported.

“Textbook, iconoclastic economists will say 85 percent, but that is not true,” he said. Most people in Zimbabwe are actually economically active.

I strongly object to such a parochial view unless he wants to base his assertion on sprucing up his image to be considered a Finance Minister who oversaw the unemployment rate reaching single digits.

Ironically, it would be interesting to hear what he is going to promise his supporters ahead of the forthcoming elections if he already believes unemployment has been reduced by such a margin, considering the macro-economic relevance and need to curtail unemployment notably in the developing world.

The mantra of “textbook economists” is equally shocking when he is the same individual who confronted the central bank chief for breaking the economics rule by lambasting what he termed irrational signorage.

Unemployment by nature can be viewed from a stricter or broader perspective. The willingness to work in both definitions is evidenced by the time period a job seeker has knocked on the doors of a targeted company or employment office to secure employment.

The reason why his Budget remains lacklustre should be evidence of astronomical levels of both unemployment and underemployment.

People opting for menial jobs such as taxi operation, hairdressing, cross-border trading, etc, should assist to indicate that all is not well. Everyone is targeting the market without any productive activity and to our Treasury boss that is employment.

The continuously rising rural to urban migration in the country is testimony of how desperate the able-bodied are to secure employment.

A number of Zimbabwean graduates from all trades who are struggling to meet basic requirements should be considered when defining employment trends.

It certainly does not take a labour expert to appreciate that jobless rate in Zimbabwe is a cancer which needs correction before it gets out of hand.

Hire purchase

Does our minister appreciate that most of the taxi operators are in hire purchase agreements where they pay an average of US$50 per month until they raise enough money to own the vehicles.

The hairdressers are faced with usurious rentals from landlords which leaves them relatively a poor lot.

The decimated manufacturing sector, unco-ordinated informal activities, trade sanctions imposed by the West, lack of pace in infrastructure development and political noise all have had a bearing on the unemployment rate in Zimbabwe which is well above 80 percent.

To gauge the level at which resources are employed in a country, one does not need a degree in economics since the dominance of foreign firms in retail, mining, banking and tourism is a testimony of a crowded out-cum-illiquid local populace.

That his office is complaining about raising a mere US$30 million for elections should be evidence that unemployment is difficult to reduce, it is testimony to why President Mugabe believes it is high time we empowered locals and it is the same reason why his boss, Prime Minister Tsvangirai, promised to create at least one million jobs in his JUICE document.

It is quite misleading to include those in informal, menial activities as being employed the common trend in that sector has been of traders who act as middlemen without adding value to the GDP chain.

These people are willing and prepared to join formal employment anytime a job opportunity arises. They are also aware of the complete absence of job security in the nefarious activities they engage in and they have been waiting all these years for the coalition government to raise Government spending as a solution to the unemployment rate only to be reminded that they are already in employment.

Unemployment will continue being an anathema to Zimbabwean Government until progressive policies are implemented which will promote the return to our local currency, the only jobs which had been indisputably created by the present, bloated administration are those for ministers and legislators many of whom had proved to be ineffective which is the simple reason why an election is needed in Zimbabwe.

There are about 900 000 people who are formally employed, some companies are still restructuring their business through retrenchments and staff costs remain the major cost drivers for doing business in Zimbabwe.

In relative terms, the wage rates for the domestic labour market are fairly at par with regional economies in spite of the lower levels of capacity utilisation currently obtaining thus making the labour cost/unit relatively higher than the regional average.

It is quite appreciated in our discipline to have different opinions in matters to do with inflation, unemployment and even some policy measures, it only becomes disastrous when holding divergent opinions makes one, iconoclastic or bookish.

After all, economics like law reveres the textbook concepts than any other discipline which is the reason why we refer back to case studies and past legal cases in order to make sound and informed decisions. Keynesians and monetarists differ in their prescriptive approaches and we will also differ when unemployment is mischievously understated.

Thank you and God bless you.

Christopher Takunda Mugaga is an economist. He can be contacted on: [email protected] or +263 772 340 353 or / +263 776 266 062.