Online Reporter
JOB creation in Zimbabwe’s formal sector is strong and accelerating as economic reforms and the pro‑business, pro‑investor stance of the Second Republic produce high rates of economic growth, which translate on the ground into new businesses, growing enterprises and expanding workforces.
By the end of last year, 1,9 million people were employed in the formal sector in full‑time jobs that require registration with the National Social Security Authority (NSSA) and payment of levies and contributions for workpersons’ compensation and NSSA pensions.
This was a jump of 235 000 from the 2024 figure of a little under 1,7 million.
The healthy rate of job creation is accelerating, with last year’s new jobs three percent higher than the 226 000 recorded in 2024. This accelerating growth has occurred despite the increasing use of advanced technologies and artificial intelligence, and demonstrates the inherent strengths of the Zimbabwean economy.
The acceleration is likely to continue as more businesses open and existing businesses expand. A critical figure for last year was the 15 percent rise in the rate of registration of NSSA formal‑sector employers.
Last year, 5 500 new employers were registered, compared with 4 600 the year before.
Some, probably most, of the new employers will be small businesses with relatively small workforces, although a new factory or a new mine opening or reopening will add a substantial block of new workers.
Some will possibly be small informal‑sector “mom‑and‑pop” outfits formalising as they grow and add staff.
It all adds up, but it is important to note that the accelerating opening of new businesses is a major driver of new jobs.
Another factor is rising capacity utilisation in the manufacturing sector. When capacity utilisation is low, it is difficult to create new jobs, since even finding enough work for those already on the payroll can be a challenge.
As capacity utilisation rises, workforces become more efficient and fully utilised, until a point is reached where new people have to be hired.
Once a second shift is introduced, there is often a significant jump in jobs. Business owners do not hire additional people unless they are needed. They do not regard their role as one of job creation, but rather of increasing production, output and revenue.
Achieving this requires hiring, training, motivating and paying people. As businesses grow, jobs are created as a consequence.
This approach means that additional employees must be productive from the outset, as no one hires passengers.
Job creation is, therefore, real, meeting the needs of employers, and is one reason private‑sector job growth is so important. Increasing the number of employees is not the goal, but a by‑product of business expansion.
A range of Government policies and measures under the Second Republic have contributed to this economic growth and the accelerating creation of new jobs.
Besides general pro‑business and pro‑investor policies, labour laws were reformed, retaining basic protections for workforces, including the right to collective bargaining, usually within a works council or a national employment council.
In addition, labour laws were streamlined and simplified, which made business owners and employers more willing to hire full‑time staff and create new jobs.
At the same time, economic reforms have produced a stable local currency with low inflation and a positive balance of trade. Foreign‑currency shortages that had previously constrained growth were addressed through market‑based systems that ensure foreign currency for productive business purposes is readily available.
Improvements to infrastructure — particularly addressing electricity supply deficiencies, poor road networks and inadequate water supplies — have made it easier to do business and allowed capacity utilisation to rise. More viable and expanding businesses translate into more jobs and, quite often, better jobs.
At the same time, the Government’s large capital budget has enabled contractor companies to grow in both number and workforce.
Education reforms are also contributing positively.
The emphasis on adding practical applications to theoretical knowledge means more young people are prepared to open their own businesses, while employers can find recruits who are quicker and easier to train.
There remains a danger that employers may become over‑reliant on contract and casual labour, bearing in mind that NSSA, in monitoring job creation, focuses on permanent workforces.
However good, such part‑time or casual workers may be, employers still need to retain skilled staff through permanent positions in order to benefit from the training and experience imparted.
