Thursday, May 30, 2024

Why are so many youths jobless?

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Youths are deciding 21st-century elections, as they recently did in Senegal

By Mwansa Chalwe Snr

Zambia’s general elections are due in two and a half years, in 2026. With the New Dawn administration having almost sorted out the debt restructuring and mining issues, as well as sufficiently marketed Zambia as a good destination for foreign direct investment (FDI), they should now laser-focus on local solutions for job creation through innovative initiatives to promote Micro and Small Enterprises (MSEs), in order to create millions of jobs for the youths.

According to the latest empirical evidence, the majority of Zambian businesses are in the MSEs category and are mainly informal, as stated by the Bank of Zambia (BOZ) Survey. In its latest Survey of Micro, Small and Medium Enterprises (MSMES), the Bank Of Zambia reported that Zambia has 1,553,892 MSMEs, and out of that total, 98.8% (1,535,245) were micro (less than 10 employees), whereas one percent were small, and 0.2 percent medium-sized. Furthermore, the report stated that 95.6% of MSMEs were in the informal sector and presumably youth-owned. It is, therefore, evident from the data that micro-enterprises provide opportunities for formal critical mass job creation for Zambia.

From the political angle, in the 21st century, it has become abundantly clear that it’s the youth that determine elections in almost all countries. It all started with Barack Obama in 2008 in the US. Then, in 2019, in El Salvador, a 37-year-old Nayib Bukele, an independent-minded leftist former mayor of San Salvador (2015-2018), became the youngest politician to be elected president, and broke 40 years of the two-party rule in El Salvador, by winning in the first round by 53%, because of the Youth Vote. And recently in Senegal, 44-year-old Bassirou Diomaye Faye won 54% in the first round too. In Kenya, it was the same. It is apparent that politicians can only ignore the Youth vote in their economic strategies at their peril.

Causes of Youth Unemployment

According to this author’s research, there are seven major factors contributing to high youth unemployment in Sub-Saharan African countries, including Zambia. And these are: low economic growth, governments’ facilitation of informality, low entrepreneurship skills, low research and development budgets, deficiencies in the education system which have limited relevance to the requirements of industry resulting in skills mismatch between the education system and the labor market. The lack of experience by youth and lack of access to information, communication, and technology facilities and the internet. Let us highlight four of the above causes in more detail.

The first major cause of youth unemployment in Zambia is the low economic growth rate, which is insufficient to generate enough jobs. The Zambian economy grew by 4.6% in 2021, 4.7% in 2022, and 4.3% in 2023. It is forecast to grow by 4.7% in 2024 by the government but IMF recently forecast growth at 2.3%. These rates are insufficient for the country to develop, create jobs, and reduce poverty. And the IMF agrees with this assertion.

“Despite its abundant resources, growth has been insufficient to lift its young and growing population from poverty. More than 60 percent of Zambia’s population lives below the international poverty line compared to 35% across the Sub-Saharan Countries,” IMF said in a statement reviewing the Zambian economy.

It should be noted that in Zambia’s case, even if the economic growth rates were to be as high as 7%, based on past experience in the mid-2000s, such growth rates would not translate into substantial job creation. This is so because Zambia’s growth rates are mainly driven by mining activities, where raw materials are exported with little value addition. Furthermore, the mechanization of most of the tasks that were previously done by human beings means that very few jobs are created. In addition, the low level of subcontracting of Zambian businesses, especially by Chinese multinationals and mining companies, means that few indirect jobs are created.

The second major cause of unemployment is the flourishing informal sector in Africa, which makes up 90% of the economy. This author does not consider informal employment as value-adding employment. This is because informality retards development. African governments, including Zambia, have not realized that they are partly enablers of Youth unemployment through their policies which discourage youth entrepreneurs from starting formal businesses. Governments are facilitators of informality through labor policies, tax policies, and excessive regulations. Excessive regulations can make setting up a formal business cumbersome and expensive. Obtaining permits, navigating licensing procedures, and complying with labor laws can be overwhelming for aspiring entrepreneurs, especially young people.

In addition, stringent tax policies can make formalization unattractive. In a nutshell, these complexities and costs can discourage young people with entrepreneurial potential from starting formal microenterprises. And this hinders innovation and job creation in the formal sector, and reduces the number of formal jobs available.

Importance of Research and Development

When one looks around the world, countries that have succeeded in creating jobs are those that have been innovative. And innovation does not just happen, it must be facilitated. Zambia and other African countries spend very little on Applied research and development, and as a result, they are unable to create jobs through innovation. Applied research can help develop new technologies and solutions suited to Zambia’s specific needs.

Without enough funding, these innovations are less likely to happen. Applied research can identify new business opportunities in Zambia. This could be in areas like agriculture, renewable energy, or ICT. With limited research, these opportunities go unnoticed, hindering the creation of new businesses that could employ young people.

The lack of entrepreneurship skills is another major contributor to youth unemployment in Africa. According to the Organisation of Economic Cooperation and Development research, two out of five or 40% of youths want to start a business, but they do not know how to go about it.

What is the way forward?

The authorities need to realize that to solve a problem, the size of the solution must fit the size of the problem. To solve the Youth unemployment problem, there is a need to press the reset button, and a proper comprehensive diagnosis done before crafting solutions.

The detailed diagnosis should entail taking a systematic approach. First, there should be the identification of the different causes of Youth unemployment, secondly, it’s crucial that there is a recognition of the fact that the Youth demographic is heterogeneous and different demographics which require different solutions. Thirdly, there has to be categorization of solutions in the different timelines of short term, medium term, and long term, and thereafter proper sequencing of interventions should be done.

And finally, a comprehensive road map that captures the above variables should be drawn up. The roadmap document should be the basis for designing the different short term, medium-term, and long-term solutions, for the different Youth demographics. The approach of designing disjointed, one size fits all, theoretical and not well-researched solutions, as has been the case in the past, should be avoided as they have failed.

Traditional methods of internship, financial empowerment, technical and vocational training, alone, will not solve the youth unemployment problem. They will certainly create a couple of thousand jobs, but not the hundreds of thousands or rather even millions required, given that every year 350,000 are entering the job market.

Conclusion

The New Dawn administration should learn from their predecessors, who panicked after Artists conducted a virtual demonstration in the bush about lack of jobs, after being denied a police permit. The virtual demonstration attracted huge local and international viewership such that the previous administration had to take note.

In panic, they decided to throw money at the problem, by introducing a poorly designed K470 million multisectoral Youth empowerment program and a $30 Million Artists empowerment program, having ignored sound advice about initiatives for youth job creation previously, including from this author. The late interventions never made a difference at the ballot box. Financial capital (money), without intellectual capital has never solved problems.

The advice to Zambian politicians is: do not ignore the Youth unemployment problem till the last minute. And to the current administration, they should not entirely delegate the issue of youth job creation with the civil service technocrats, whose jobs are not threatened by elections. They should look for solutions outside the civil service bureaucracy and engage those in the private sector that may have solutions.

The advice to President Hakainde Hichilema is that he should consider taking a leaf from former United States President Barack Obama’s book when facing the 2008 financial crisis. He appointed Steven Rattner, a Restructuring and Turnaround expert as Car Czar to save US motor industry. The President needs consider appointing a “Youth Job Creation Czar” to help him solve the high youth unemployment problem.

The writer is a Chartered Accountant and Author. He is the Founder of Prosper Knowledge Solutions Ltd, a research-based virtual Knowledge and Strategy firm.

20 COMMENTS

  1. The answer is simple. You sold all GRZ owned companies. Instead of selling these companies a study should have been taken to make them profitable. The foreign investor will mainly employ his country men and casuals from the local market.

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  2. No govt creates jobs noooo!!! The govt duty is to create a conducive environment for citizens to create businesses by making easy access to the loans from lending institutions even by the govt itself. Give them easy or no tax for about 2 years so that they can grow. Kay mu ZED kaya!!!

    • If those industries were not sold the way the did the situation wouldn’t be this bad….there should have been a clause that no component should be dismantled or removed from the plant.. take ROP it was bought and the machinery dismantled and shipped out of the country. Unip government did well at creating jobs but we the employees failed the government by pilfering, loafing, laziness etc.

  3. You see, our leaders are NOT exposed to advanced nations, they have never lived or worked in these advanced nations. A degree without exposure is useless.. some of us been living in diaspora and our minds are open. When you change the way you think the world around you changes….lack of exposure is a curse!!!!

  4. It is the entrepreneurs who create jobs not the govt nooooooo!!! Wake up you unexposed govt leaders.

  5. Its becoming very difficult to do business in Zambia….companies have stop hiring….no electricity no water no liquidity to operate….just how do you expect the youths to be employed….??? HH said his priority is to employ children and family members of late Presidents and fellow Politicians children….and Mapani is busy employing only his relatives

  6. Our learning institutions could prove more useful if they include a component of teaching learners how to apply knowledge gained. Knowledge has no value except that which can be gained from its application toward some worthy end.

  7. this writer is a crook and an oportunist. he touches on a topical issue just to enlist attention to his article but hes so blank on solutions. he says’ whats the way forward’ and yet theres no way forward mentioned just waffling around. sorry my frend you are not good at it.

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  8. The Gentleman doing Carpentry on my property is having a hard time….he is forced to do Carpentry late at night when electricity is available and he has reduced the number of his employees……he told me that before loadsheding he had 16 employees but now he is only working with 4 employees…so this explains as to why the youths are unemployed …corruption is on the rise under HH

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    • The one who has down thumbed your comment is a blind follower. A government that accuses ERB of increasing prices without government approval but doesn’t reverse the ” unauthorized” changes cannot not be trusted.

  9. The problem is over population. in african countries 90% of adult men above 40years have more than 4 kids. what the hell is that. reduce on the number of kids please.

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    • You are part of that overpopulation are you not happy? China and India have bigger populations but don’t use it as an excuse….. because they have their own brand business systems…..imwe everything is UK or USA… nothing original. And if a businessman is suspected to be an opposition simpathizer the business is closed…. savages you are only fit for the jungle.

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  10. @ Chipampe
    Very true and if you go to villages its even worse…8 to 11 children in one family and they all end up in the big cities looking for employment which is non existence due to loadsheding and water challenges….

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    • Why does every Zambian want to go to town? There are numerous potential commercial ventures in every one of our nine provinces but sleepy government after sleepy government prefers to exploit the same ones left by Roy Welensky. As a result every Zambian wants to live in Lusaka.
      If you look at Zambia its a huge country full of opportunities but government is nowhere to facilitate entrepreneurship. Government just yaps and yaps and does nothing. Government keeps watering the same plants it inherited with no thought of planting new ones. If we were progressive, 60 years of independence would have seen a railway from Lusaka to Mongu, from Chingola to Mwinilunga, from Lusaka to Chipata but we are happy with seeing a few individuals showing off big mansions in New Kasama. Niye development??

  11. In Zambia, and in Africa generally, we essentially have a liability population who consume more than they produce. life ‘favors’ those who take action and not those who do nothing other than just pointing fingers. 200 years from now, Africa will have no natives. Stop being lazy. Earn your right to survive with your work.

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  12. IMINGALATO ISHAMUNGULU SHIBI SANA, when done by ba boya!!! You guys back home you elected ba boya.. look now hey!!!

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  13. Dependence syndrome is high in Zambia. Some people use the social cash transfer they receive for buying kachasu and then continue begging for help from relatives and complaining of hunger!!

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    • It’s sad that people don’t want to take personal responsibility. Me and my cousins, uncles etc we went to the same schools and along the way they dropped out in preference to things like ukugwandila( golf caddy). I finished school got a job and a nice flat. Then all of them started trooping to my house…. I never allowed them to spend even a single night… they despised me but in the long run they to accept my stance.

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