As a concerned PF youth and supporter, I have felt the deep need to make a contribution through a valuable article on my views with regard to the pertinent issue in the country that boarders on job creation. In this publication, I put faith in small and medium enterprises to create millions of jobs Zambia needs- with crucial help from the government.
Mr Editor Sir/ Madam, if there is one thing which I believe all Zambians agree on, it is that the creation of jobs as the foremost challenge facing our country today. It is critical not only for the achievement of a better life for all our people – employment is central even to the notion of human dignity; equality and justice as well as it were even to our government, “putting more money in our pockets.” Unemployment stands in the way of our efforts to eradicate poverty and reduce inequality. It undermines the achievement of sustainable economic growth, and erodes social cohesion. Though unemployment may not be the cause of all our social ills, it severely hampers our ability to effectively address them.
But, while there may be consensus on the need to create jobs, there is less agreement on how we should go about doing so. This is not necessarily a bad thing though. We pride ourselves on the diversity of views in our society, and our ability to engage in vigorous debate. But we also pride ourselves on our capacity, through this engagement, to find common ground and achieve outcomes that serve the interests of all our people.
Just as we were successful in working together to define the values, principles and form of our democratic constitutional order, so too do we need to work together to determine how we can most effectively create jobs, and do so in a sustainable manner. This task stands at the centre of the Patriotic Front Government Manifesto, which was produced in 2011 as a basis for a nationwide engagement on Zambia’s development programme for the next 5 years. It envisages the creation of the much needed jobs and a reduction in levels of unemployment. These are ambitious targets, and will not be realised unless all Zambians work together in a coordinated manner to implement bold and innovative measures irrespective of our party, social and religious affiliation. As a country, we have had enough of the debate and that is important, but “action” is critical.
In this, the” government”,” business” and” labour” all need to play a role. The government needs to strengthen the works programme as it remains an important poverty-alleviation measure that provides skills and work experience to the unemployed. There should be a scope to further expand this intervention, although it has inherent limitations. What the unemployed need are permanent, sustainable jobs. We need to agree on mechanisms for encouraging greater labour absorption by the private sector. These should include a wage subsidy for companies that employ young entrants into the labour market. It is necessary to ensure that it does not undermine the wages and working conditions of existing employees and does not lead to their displacement.
We need to make our economy more competitive. Zambian companies have to compete with foreign companies in both the domestic and export markets. To make our companies successful, there is need to reduce their costs of doing business. They must increase the value products and services they produce. We should focus on developing those sectors in which we have a comparative advantage, and which are capable of creating more jobs.
A contentious issue that we need to confront is the” cost” of labour. We face the difficult task of improving our global competitiveness while protecting the gains that workers have achieved over years. In a country with such extreme income inequality, it is difficult to argue that workers must constrain their wage expectations. At minimum, any effort to moderate wage increases needs to begin with the highest earners in Zambia, while safeguarding middle and low earners.
A critical component of any effort to moderate wage growth is a concerted programme to reduce the cost of living. The PF government needs to look at how to reduce the burden on the poor in particular. The reduction of energy, transport, food and other basic costs will go a long way to reducing wage inflation.
At the same time, we need to reduce other business costs including energy, transport and telecommunications as well as costs related to unnecessary regulatory compliance. Many of these efforts are already under way. Some progress – on the regulatory front, for example – could be achieved relatively speedily. Other efforts, however, require a long-term investment in infrastructure, not only in Zambia, but in Southern Africa as well.
The most pressing task, of finding employment for a largely low-skilled population, must not undermine our longer-term goal of cultivating a working population with the skills needed to thrive in a rapidly changing, modern, global economy.
For this reason, we need to place at the heart of our job-creation efforts the achievement of quality education for all. Despite significant improvements in access to education and an increased education budget, Zambia is lagging behind to comparable countries on most educational indicators. This is arguably the single greatest constraint to the creation of jobs and eradication of poverty.
We need a bold, focused and concerted effort to fix the problems in our education system – to address issues of management, school leadership, teacher competence, the teaching culture, the learning environment and the role of parents.
As we work to address all these challenges, we need to acknowledge that the government, parastatals and large companies will not create most new jobs. Jobs will be created by small and medium businesses. As a society we need, therefore, to reconsider the role and place of small and medium businesses within the economic life of our country.
For too long we have tended to view large corporations as the central drivers of economic growth. We have viewed corporate jobs, professional careers and public-service positions as the surest routes for personal advancement. Among countries at a similar stage of economic development, Zambia’s levels of entrepreneurial activity are significantly low. This needs to change. We need to recognise the great opportunities that entrepreneurship presents, not only for individuals, but for society as a whole.
By concentrating our efforts on job creation, by each of us taking responsibility to contribute in whatever way we can to alleviating this problem, and by acting together in a common purpose, we will be able to ensure that all Zambians can enjoy the dignity, fulfilment and opportunity that come with work. Our resolve to create jobs should be executed with a determination and speed akin to how one would save another person from a burning building.
In most countries, small businesses create more jobs than any other sector. We need to significantly improve our efforts to support and facilitate the growth of small and medium enterprises. The PF government has to recognise many of the shortcomings in its efforts to date, and should work to enhance both its financial and technical support to small and medium enterprises. But the development of this sector will require more than that. There needs to be far greater collaboration between the government, the private sector and financial institutions in supporting SMEs. There is need to engage with a new approach to the incubator concept. This is eminently achievable. There are several examples across the world, and even some in Zambia, of approaches to SME financing that have been able to account for increased risk and lack of collateral. These need to be multiplied.
The government has a direct role to play in reducing the regulatory burden on SMEs. Many small businesses cite the cost of compliance with business and labour regulations as a key hindrance to their growth. Other countries have demonstrated that it is possible to significantly reduce these costs and make the regulatory requirements less onerous without completely exempting small businesses from necessary regulations.
Both the government and the private sector have a role to play in improving market access for SMEs. Many struggle to get contracts from the government and corporations, who tend to prefer larger, established businesses. By simply relooking at their supply chains and their procurement criteria, the government and the corporate sector could make a significant contribution to the development of SMEs, and especially locally-owned SMEs.
Zambia is defined as a middle-income country. Yet most of its people live in conditions typical of a low-income country. This suggests that our greatest problem is not that we do not have enough money, but that we have not found effective, sustainable and just ways of distributing it.
By concentrating our efforts on job creation, let’s put aside our political differences, give the due support to the president and his government. Each of us should take responsibility to contribute in whatever way we can, to alleviating this problem, and by acting together in a common purpose, we will be able to ensure that all Zambians can enjoy the dignity, fulfilment and opportunity that come with work. Our resolve to create jobs should be executed with a determination and speed and this alone can help PF retain the people’s mandate, come 2016 .
Edwin M Hatembo Junior