Youth Unemployment in Zambia

 

By Michelo Maunga

Introduction

Zambia is grappling with an unemployment crisis amongst its young people. Institutions of higher learning and in general the education sector are churning out graduates, only to roam the streets owing to inadequate opportunities. The situation makes for sad viewing. Young, vibrant, enterprising and hardworking young people are left with no income and no opportunity to exercise their skills. Many have to accept being underemployed. Personally, I had to work as a taxi driver for year with my Economics degree from UNZA, something I did with the same enthusiasm I would as an economist at the Ministry of Finance.

The Facts

Without trying to point figures, the buck ultimately ends with government. It is the responsibility of the state to create a conducive economic environment that provides job opportunities. When the economy is growing, jobs for young people and all other age groups are created. It is interesting to note much of talk on youth unemployment is centred on Africa. Allow me to draw your attention to a few statistics. In the US, there are 10 million unfilled vacancies. Secondly, it has been reported that for one unemployed person, there are 1.7 job openings in the USA, where roughly 200,000 jobs are added every month and unemployment is at 3.5%. A similar situation is evident across the UK and other parts of Europe. Coming to Zambia, the Minister of Finance recently revealed that more than 6 million Zambians are actively looking for work. The youth unemployment rate as at 2021 was 26.05%. One only need to look at pictures of youths scampering for openings such as census enumerators, where a 55,000-seater stadium was filled, those in the defense forces and many more.

The Economic Cost of Youth Unemployment

On face value, it may seem that unemployment hurts the person without a job most. It is however, equally pernicious for society and the government. Look at it this way, if even half of the millions looking for work were in formal employment, they would be contributing to PAYE. The economy’s tax base is largely constrained amongst the few Zambians in formal employment. As a consequence, these few are heavily burdened with income tax which can syphon nearly half of an individual’s pay. Secondly if more of the unemployed had an income, consumption in the economy would rise. Due to disposable income, they would channel this income into the economy, into various goods and services. Thirdly, they would save, which would provide a pool of capital for the private sector, thus lowering the cost of credit. The above concepts are components of the Aggregate Demand function which, in economics, is the centerpiece of a growing economy. Lastly, unemployed youths are more likely to turn to illicit vices such as crime, alcoholism and drug addiction.

Possible Remedial Measures

The new government has made several efforts to address this problem. They have recruited significantly in the government across several line ministries. The state however can only absorb so many youths, the bulk of who should be absorbed by the private sector. An economy must not be driven by the government, rather by the private sector. It is interesting to note that other jurisdictions aim to make their government’s smaller. The government must continue to unlock all rigidities currently constraining the private sector and not stifle Foreign Direct Investment as was the case under President Lungu. This will allow the private sector to be the engine of growth it needs to be.

Recently, the National Union of Government and Allied Workers (NUGAW) and the NEU in the UK reached an agreement to recruit 5,000 Zambian nurses into the NHS (UK). More of such initiatives should be explored. Much of the developed world is starved for young people to enter the labour force, a situation which is due to shifting demographics. Similar agreements could be instituted for doctors, engineers, teachers etc.

Lastly, the government needs to restore the economy to a growth trajectory. 3.1% is satisfactory, however we need to be aiming for more. A growth rate in the region of 6% would be more ideal to absorb the youth who enter the labour force every year.

Conclusion

Youth unemployment is a ticking time bomb. Efforts need to be built upon as it threatens the fabric on which society is woven. An idle mind is the devil’s play ground as the saying goes. I am assured nonetheless of the current administration’s resolve to address the issue. This notwithstanding I believe they can do better. As with much of economic policy, results will not be overnight. However, I am hopeful than 5-7 years down the line, there will be tangible results.

The Author is an Economist and member of the Economics Association of Zambia.