Unemployment kills hope for graduates

The economy of Zimbabwe shrunk significantly after 2000, resulting in a desperate situation for the country and widespread poverty and an 80% unemployment rate. The participation from 1998 to 2002 in the war in the Democratic Republic of the Congo set the stage for this deterioration by draining the country of hundreds of millions of dollars. Hyperinflation has been a major problem from about 2003 to April 2009, when the country suspended its own currency. Zimbabwe faced 231 million per cent peak hyperinflation in 2008.

 Many graduates from Zimbabwe’s tertiary institutions have lost hope of ever getting formal employment, as the economy continues to shrink. Companies are either downsizing or closing down, sending thousands of workers out of employment, making it virtually impossible for school leavers to get jobs. Independent economists say Zimbabwe’s unemployment rate is at over 80% but the government puts it at 11% arguing that most people are now employed in the informal sector.

It is estimated that over 300 000 students are churned out of schools, colleges and universities every year to join millions already unemployed. Out of desperation, some school leavers have resorted to drug abuse and at times gambling to eke out a living and some have resorted to become vendors. Zimstats estimates indicate that 65% of Zimbabweans live on less than US$1 per day. The government says our industries will soon be up and running and many jobs will be created as we revamp our dilapidated infrastructure. Experts have blamed the high unemployment rate on unfriendly policies adopted by President Robert Mugabe’s Zanu PF administration over the years. The Indigenisation law, first promulgated in 2007, was cited as one of the most investor unfriendly policies.

Low GDP growth and low investment in Zimbabwe are direct causes of the shrinking demand for labour. Our government should consider reforming its economy to allow more labour-intense industries to develop. A 2013 report titled: Nexus between Growth, Employment and Poverty in Zimbabwe: The Economics of Employment Creation by the Labour and Economic Development Institute of Zimbabwe (Ledriz), said unemployment worsened even before the economic crisis.  There was need to attract investors but “investors are worried about the policies we have deliberately imposed — they need to be changed.”

 The Indigenisation law compels foreign-owned companies to cede 51% of their stake to locals. High taxation, government interference and the indigenisation policy especially in the mining sector, needed to be changed. Unemployment is so high that it’s a social curse to Zimbabwe. It’s actually a time-bomb. It’s really a cancer in Zimbabwe, more serious than the liquidity crunch. The leading economist, John Robertson told business daily that unless Zimbabwe takes austerity measures to address political and economic problems that continue to dog its economy, the country's unemployment rate will continue to escalate. Zimbabwe's economy remains fragile, with business and industry capacity utilisation depressed due to liquidity crisis and poor foreign direct investment flow among other constraints although the average Gross Domestic Product (GDP) rate following the adoption of a multi-currency regime.

ONE IS LEFT WONDERING WHAT WILL BECOME OF US IN THE NEXT YEARS TO COME.

Foreigners have killed our economy

The World Bank says the 2014 outlook for Zimbabwe’s ailing economy is increasingly uncertain. According to the World Bank’s September economic briefing, the economy faces uncertainty both from expected volatility in the global economy and on the domestic front after the contested July 31 elections amidst worsening macroeconomic indicators and increased vulnerability of the banking sector. Below are excerpts of the outlook report: As the US Federal Reserve Bank starts unwinding the recent expansionary monetary stance, emerging markets may face increased volatility due to expected capital outflows and possible volatility of international commodity prices. Year 2013 global growth is expected to remain slow, at 2,2%, held back by rather weaker high-income countries growth (1,2%). Although financial conditions in high-income countries have generally improved, growth in the Euro area remains subdued by the still weak confidence and continuing banking sector and fiscal consolidations.

The World Bank says the outlook for Zimbabwe’s economy for 2014 remains uncertain due to a number of internal and external factors, including the expected volatility in the global economy. Zimbabwe's increased political repression, descent into economic collapse, and growing international isolation have an impact well beyond the country's borders. Donors, who have been developing strategies for dealing with 'difficult partners,' have been frustrated by their inability to encourage a more positive direction for the country. Some analysts always lie that the future is blooming but the truth is our future lies in the hands of the Chinese hence, the introduction of their currency into our country. On current trends, Zimbabwe’s economy is about five years away from a full gravity-defying recovery.

By the normal laws of economics, Zimbabwe’s government ought to have collapsed – but the global spike in mineral prices has changed things. Suddenly, the diamond mines became more valuable than ever and Chinese investors turned up willing to do business with Mugabe without any of the qualms shown by the West. Instead of being lectured by the International Monetary Fund, he was being offered his gilded place in China’s fast-growing African empire. Even now, officials in the Foreign Office talk about what to do with Africa as if the old colonial master still had substantial clout to wield. Tony Blair has admitted that he laboured under this delusion until he left office, only later realising that China had come from nowhere to be Africa’s biggest single client and most influential ally. That influence can come via Chinese government enterprises. In Zimbabwe, the press is full of signs of China’s growing influence. There is talk of giant television screens being erected in Harare to transmit Chinese news.

But the other old argument for change – that Zimbabwe’s prosperity can only come with the restoration of its old freedoms – has taken a knock in recent years. Mineral mining vies with oil trading as the worst form of capitalism, bringing money without the need for liberty. To grow rich on farming and manufacturing requires the rule of law, education, property rights and economic liberalisation. We just need people who can cut deal with foreigners who want to drill for oil or diamonds.

IF WE JUST LEAVE OUR LIVES’ IN THE HANDS OF THE CHINESE, WE ARE GOING TO REMAIN POOR FOR THE REST OF OUR LIVES.

ZIMBABWEANS WE NEED TO BE WARY!!!!!