N$500k to create jobs

Labour commentator Herbert Jauch says government has not done anything to reduce the country's soaring unemployment rate and that the next Labour Force Survey, due for release later this year, will show that joblessness has worsened.

18 February 2020 | Labour

The labour ministry only received N$500 000 in its annual budget for employment creation, its executive director Bro-Matthew Shinguadja has confirmed.

“We budgeted N$500 000 and it was approved,” he told Namibian Sun during an interview.

The ministry will further not be able to spend the money on its intended purposes as the 2019/20 fiscal year draws to a close at the end of March. Shinguadja also noted that his ministry would not be able to implement projects because of the limited timeframe it has to carry out job-creation activities.

“As we are sitting here, money meant for job creation was just released recently. The government books are closing next month. How can we do that within a month? We need to follow the Public Procurement Act,” Shinguadja said.

He noted that his ministry embarked on regional visits to conduct assessments on what type of job-creation activities existed. This occurred when the ministry was given the employment creation mandate in 2015. Prior to that, it dealt with labour and social welfare issues.

“We visited all the regions, talking and asking what programmes should be implemented. The projects were assessed and we went to inform the authority about how many jobs can be created. We requested an amount and never got anything,” he said.

Money meant for ministries to carry out projects was also only availed on a month-to-month basis, further curtailing any work that was intended for job creation, he said.

According to him, the ministry's first priority was to ensuring that its employees were paid. The ministry then had to turn its attention to ensuring that other obligations such as water and electricity accounts and payments meant for security provision were paid.

Shinguadja also lambasted the lack of coordination between various government ministries and said it was vital for a commission to be established that would be comprised of government, the private sector and labour union representatives. According to him, various ministries had their own job creation programmes, and it would be better if the labour ministry would be tasked with overall job creation.

“We drafted an Employment Creation Bill to establish a national body with the mandate to create employment. The Bill has not yet been approved.”

Going forward, Shinguadja said it would be helpful to implement an employer creation assessment impact programme. This, he said, would be vital for government to question prospective companies regarding the amount of jobs they envisaged creating before any tenders are issued.

Shinguadja said there were good projects that had been identified but there was a problem with getting them off the ground.

“There are good ideas but implementation is a problem sometimes because of our laws. Employment creation is doable but needs a coordinated effort,” he said.

He noted that job creation was not the sole responsibility of government and that there was need for cohesion between government, the private sector and labour unions to look for solutions to the job crisis.

Employment noose tightens

Statistics provided by the ministry indicated that 853 workers were retrenched between October and December last year by close to 100 companies.

Of the 853 workers retrenched, the highest job losses were recorded in the Khomas Region (449) followed by Kavango East (129), the Erongo (136) and //Karas (76). The lowest job losses were recorded in Otjozondjupa, Oshikoto, Hardap and Oshana regions, with 31, 15, 13 and four job losses respectively.

This as the country grapples with high unemployment figures. The results of the latest Labour Force Survey (LFS) showed that the unemployment figure was 33.4% or 349 383, while the statistics were even more grim for the youth, with a total of 265 770 or 46.1% of the youth unemployed.

This is just slightly worse than Botswana which has a comparable population to Namibia's.

The diamond rich country's unemployment rate grew by 1.6 percentage points from 25.1% in 2015/16 to 26.7% in the third quarter of 2019, according to a quarterly survey by Statistics Botswana.

In South Africa, a report released by the Centre for Development and Enterprise showed that 10.3 million people in that country are looking for work.

Finance minister Calle Schlettwein had in his 2019/20 budget statement motivated a pro-growth job creation budget, but would not comment when asked whether it had served its intended purpose. He however said signs of recovery in the economy prevailed.

A total of N$7.9 billion had been set out from the development budget to spur job creation.

Government is idle

Labour commentator Herbert Jauch said government has not done anything to reduce the soaring unemployment rate and that the next Labour Force Survey, due for release later this year, will show that joblessness has worsened.

“Government has not done anything to bring the unemployment rate down. It will get worse as more young people enter the job market looking for work every year. The next survey will show that unemployment got worse,” Jauch said.

He listed government's mass housing project as a possible solution to Namibia's unemployment woes.

“The State needs to intervene in the economy. That could include deliberate value-addition in Namibia. We need to create local value chains. Instead of importing material, take deliberate action that will see material needed to build houses provided locally to protect local industries,” he said.

Economist Klaus Schade echoed these sentiments.

“The LFS will most likely see an increase in unemployment because the economy contracted. We will most likely see job losses. It remains to be seen if there will be recovery in the agricultural sector. The other is the construction sector; it declined but might recover, but that may not be enough to see a recovery in employment,” Schade said.

He added that interventions such as increased local procurement could help incentivise employment figures.

“Government has started some initiatives such as local procurement. Raising local procurement by government and the private sector [public entities] should encourage stabilisation,” he said.

Schade also advised government not to underspend on the development budget. Money not spent in a fiscal year by offices, ministries and agencies is returned to the treasury to be reallocated.

“What is furthermore necessary is that government spends the development budget on infrastructure projects to create and sustain jobs in the construction sector. Government should expedite project management,” he said, to see that the development budget allocated was spent as required.


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