Economy creates 200 000 new jobs in first quarter

Zimbabwe’s economy created an additional 2 00 000 new jobs in the first three months of this year, raising hope the economy may perform better than expected despite headwinds that include drought and other external factors.

The global economy has faced challenges that include higher inflation and reduced demand from major markets, amid the weight of risks associated with the impact of geopolitical factors and hangovers from Covid-19.

Zimbabwe’s economy is estimated to have grown by 5,3 percent last year while the impact of El Nino climate conditions is expected to slow down the agriculture-driven economy’s growth to 3,2 percent in 2024.

But the latest data released by the Zimbabwe National Statistics Agency (ZimStat), shows that the number of employed (formally and informally) individuals rose by 116 650 to 3,29 million compared to 3,17 million in the previous quarter.

This means the economy created 200 000 jobs after 101 352 workers lost their jobs in the same period.

However, the overall positive development marks a significant milestone, being the first quarter-on-quarter rise in employment observed since the onset of economic challenges brought about by the Covid-19 pandemic.

The employment-to-population ratio (EPR) experienced a positive shift, increasing by 1,5 percentage points to 38,2 percent from 36,7 percent in the last quarter.

This growth reflects the improving labour market conditions as more Zimbabweans, particularly those within the working-age population, secure employment opportunities.

The total labour force, comprising individuals aged 16 years and above, also expanded, rising to 4,14 million from 4 million in the previous quarter.

ZimStat said the 3,5 percent increase indicates a growing participation in the labour market, which is further substantiated by the rise in the Labour Force Participation Rate (LFPR).

The LFPR climbed from 46,3 percent to 48 percent, signalling that nearly half of the working-age population is now engaged in the labour market either through employment or active job seeking.

A closer examination of the employment structure reveals a mixed performance across different sectors.

Formal (non-agriculture) employment grew by 1,4 percent, reaching 988,586 individuals, which constitutes 30 percent of the total employed population.

This growth in formal employment underscores a gradual shift towards more stable and regulated job sectors, providing better job security and benefits for the workforce.

Conversely, informal employment witnessed a decline, decreasing by 2,4 percent to 1,36 million people. Despite this reduction, the informal sector still accounts for a significant portion of the workforce, making up 41,3 percent of total employment.

The decline in informal employment suggests a potential transition of workers from informal to formal sectors, reflecting improved economic conditions and potentially better enforcement of labour regulations.

The agriculture sector remains a vital component of Zimbabwe’s employment landscape, employing a total of 752 844 individuals.

This sector accounts for 22,9 percent of the country’s total employment, highlighting its critical role in providing livelihoods for a large portion of the population, especially in rural areas.

Notably, the national unemployment rate for individuals aged 16 and above saw a slight reduction, falling by 0,2 percent to 20,5 percent.

This translates to 850,326 unemployed individuals, down from 20,7 percent in the previous quarter.

While the unemployment rate remains high, this decrease is a positive sign of an improving labour market, potentially driven by policy measures aimed at stimulating job creation and economic growth.

Economic analysts attributed this uptick in employment to several factors, including recent Governmental efforts to stabilise the economy, attract foreign investment, and implement job creation programmes.

Additionally, improved business confidence and a relatively improving macroeconomic environment have likely contributed to the increased hiring across various sectors.

The growth in formal employment, in particular, is seen as a positive indicator of economic restructuring.

“The increase in formal employment is encouraging as it signifies a move towards more sustainable and secure job opportunities,” said Tinevimbo Shava, an economist.

“However, the persistence of high unemployment and a substantial informal sector indicates that more comprehensive measures are needed to ensure inclusive economic growth.”

Looking ahead, maintaining this positive momentum will require continued focus on creating an enabling environment for businesses, improving infrastructure, and fostering a favourable climate for investment.

Additionally, targeted efforts to upskill the workforce and align educational outcomes with market needs will be crucial in addressing the structural challenges that have historically plagued Zimbabwe’s labour market.

The first quarter of 2024 has brought a wave of optimism for Zimbabwe’s labour market, with significant gains in employment and a slight reduction in unemployment.

While challenges remain, the positive trends observed in this quarter provide a foundation upon which further economic recovery and growth can be built. The Government’s role in sustaining these gains will be pivotal as the nation continues to navigate its path towards economic stability and prosperity.-herald