More job losses bloodbath feared

04 August 2020 | Social Issues

OGONE TLHAGE



WINDHOEK

With the release of the unemployment statistics for the first quarter of the year by the ministry of labour, commentators are pessimistic and say the latest report could paint a grim picture, largely as a result of the Covid-19 pandemic.

Namibia’s unemployment figure currently stands at 34%.

“I see massive retrenchments and more unfair labour practices. The effects of Covid-19 on the job front are still ongoing,” said labour commentator Herbert Jauch.

Job losses would also be more wide-ranging compared to the first lockdown, which saw the construction, tourism and aviation sectors hit the hardest.

Jauch said retail and transport may see similar job losses from now on.

“It’s going across the board; we see it now in the retail sector and we will see this even in the transport sector because the transport sector has been severely limited,” he said.

Economist Klaus Schade holds a similar view.

“The retail trade sector will feel the impact because of the loss of income due to retrenchments, wage and salary cuts, as well as more conscious consumer spending patterns due to the prevailing uncertainty,” he said.

Grim forecast

Jauch predicted that unemployment could reach 50%.

“We started off with 34% before Covid-19; our unemployment figure could reach 50%,” he said.

Schade would not comment, saying it is difficult to speculate about future unemployment.

“The extent of the impact on the labour market is difficult to estimate, since some companies have retrenched employees in order to survive, while others try to retain employees despite the slump in demand. However, the longer the pandemic drags on, the less likely it is that businesses that suffer from the drop in demand can keep the workforce, even at reduced wage and salary levels,” he said.

Schade urged frequent publication of labour statistics.

“Because labour market data is a vital economic indicator, the Namibia Statistics Agency needs to be well resourced to conduct at least annual labour force surveys, if not on a quarterly or semi-annual basis,” he said.

Where to now?

Jauch said the government could curb the rising unemployment by prioritising healthcare, agriculture and value addition.

“There needs to be value addition of local products, further production of vegetable products and provision of quality healthcare.

“Additionally, we could look at the production of pharmaceutical products that can be manufactured in Namibia, a greater focus on self-sufficiency,” he advised.

Jauch also supported the introduction of a basic income grant to assist households affected by the Covid-19 pandemic.

Employment noose tightens

Statistics provided by the ministry indicated that 853 workers were laid off between October and December last year by close to 100 companies, Namibian Sun reported in February this year.

The highest job losses were recorded in the Khomas Region (449) followed by Kavango East (129), Erongo (136) and //Karas (76). The lowest job losses were recorded in Otjozondjupa (31), Oshikoto (15), Hardap (13) and Oshana (four).

This comes as the country grapples with high unemployment figures. The results of the latest Labour Force Survey (LFS) showed that the overall unemployment figure was 33.4%, or 349 383 people. For the youth, the statistics were even grimmer, with 265 770 young people, or 46.1%, without work.

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