Zambia must create 1.2 million new jobs in urban areas by 2025

Zambia’s city populations are expanding at an average rate of nearly 4 percent per year and it is projected that Zambia must create 1.2 million new urban jobs by 2025 and 2.8 million by 2035.

A report published today by ZIPAR, the International Growth Centre and Just Jobs Network states that the number of Zambian workers employed in agriculture fell steeply from 71.4 percent to 48.9 percent.

Zambia is witnessing a shift as the workforce moves out of agriculture into services and industry between 2008 and 2014

The report which forms part of ZIPAR’s on-going Flagship Project on “More and Better Jobs” shows that despite the country’s high levels of economic growth, its labour markets are not creating enough jobs that can propel inclusive growth and that this is having a big effect on cities.

It shows that between 2012 and 2014, purchasing power in Zambia’s heavily urbanised Provinces-Lusaka and Copperbelt declined and in Lusaka, urban workers earned nearly 17 percent less in 2014 than 2012.

The report says that in both Lusaka and the Copperbelt, the number of workers who work without pay in a family business or on a farm was growing faster than the number of paid workers.

It notes that most growth recorded in urban employment was in low productivity informal services adding that this is an early warning that productivity may not be rising fast enough to sustain continued job growth in the long run.

“While the situation is likely to worsen with the current economic slowdown, there are some positive trends which could offset the declining rate of urban employment. For example, the construction sector employed 128 percent more workers in 2014 than in 2008. The hospitality sector also expanded formal employment by 63 percent in the same period. But these bright spots cannot outshine the warning signs of a severe lack of productive jobs in urban areas, outside the small, and shrinking, formal sector, which employs just over a quarter of urban Zambians,” the report shows.

The researchers propose policy changes which could inform the development of the seventh national development plan, which is currently being worked on by government.

They proposed strengthened efforts to recognize and upgrade informal settlements and extend cluster-based industrial policy to urban areas and upgrade urban markets.

“The cluster approach to industrialization, which the Zambian government is currently pursuing in rural areas, is well suited to an urban economy. While the cluster approach can also succeed in rural areas there is significant scope to promote manufacturing activities in urban areas in order to create more jobs.”

Improve intra- and intercity connectivity and leverage new infrastructure investment to stimulate growth-intensive sectors.

Connectivity-both within the city and between centres of production is one of the keys to leveraging mass effects of urban economies to create more and better jobs. Effective public transportation networks can help MSMEs to move their goods to markets. Moreover, new investments in national road and rail infrastructure can be harnessed to support the growth of labour-intensive sectors and MSMEs.

The researchers also recommended the revitalization and diversification of the Copperbelt to create a more dynamic, job-creating urban region.

“The Copperbelt is one of the most important urban regions of Zambia, but today its economic fortunes are endangered, largely because of its overdependence on copper mining. Policy makers can reverse the province’s down turn by building on its existing assets and engaging the right mix of interventions to create a vibrant urban labour market through diversifying its economic output.”