Economic diversification, key to job creation - The Nation Online

Economic diversification, key to job creation

The sentiments made by United Transformation Movement (UTM) leader Saulos Klaus Chilima to create one million jobs if elected next year have been put on a spotlight with opposing views from sectors of the economy.

At the launch of his movement at Masintha ground in Lilongwe, Chilima in his 12-point plan, promised the jobs which in essence means 83 000 jobs in a month and 2 700 jobs in a day.

Job seekers captured at the Labour Office in Limbe

But economic commentators and industry insiders argue that the fact that the Malawi’s economy is not diversified with productivity still low is enough reason for the country to continue failing to produce jobs arguing plans to create more jobs in the economy should accompany economic diversification.

Speaking in an interview, Chancellor College economics professor Ben Kaluwa noted that unless the country boosts productivity by diversifying the economy creating a million jobs is wishful thinking.

“Talk of diversifying the economy first before talking about creating such number of jobs. We are not saying creating a million jobs is not possible in Malawi but taking from the state of affairs, it could take more than what we think to achieve this,” he said.

On his part economic commentator Gilbert Kachamba said though possible, creating a million jobs would require a lot more than focusing on a single component of the economy.

He said: “Creating a million jobs is no joke. We are talking about real employment not seasonal or casual and to achieve this there are a lot of supply side constraints that need to be addressed to achieve that goal.

“For instance, the energy sector needs serous scrutiny because no serious investor can come to invest in the country in its current status but also the education sector needs some reforms to feed the growing industry with the skilled labour.”

But spokesperson for the movement Joseph Chidanti Malunga in an interview on Tuesday maintained the position, saying the party believes it can use the available resources in the country to create jobs.

“We know that reducing the amount of money that goes into people’s pockets will certainly make a difference in the country. What we are saying is that we are going to build roads, hospitals and other infrastructure and we know this will translate in jobs,” he said.

Malawi has been facing a labour crisis with National Statistical Office (NSO) figures showing that unemployment rate in Malawi is at 23 percent, according to a labour survey conducted in 2015.

In neighbouring Zambia, Tanzania and Zimbabwe, unemployment is also an issue though relatively lower compared to Malawi.

For instance, in Tanzania, unemployment rate stands at around 10.3 percent as at 2015, 7.79 percent in Zambia and in Zimbabwe it is at 5.6 percent.

The 2018 Malawi Annual Economic Report shows that the country has a total workforce of 5.5 million people. The private sector creates more jobs in the economy at 300 000 compared to 200 000 jobs in the public sector.

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