The Sunday News
Noble Ncube, Business Reporter
ZIMBABWE has the highest minimum wage and highest unemployment rate compared to other Southern African countries, a study by the Confederation of Zimbabwe Industries (CZI) has revealed.
The study shows that the country’s minimum wage was at $246 against an unemployment rate of 85 percent. Malawi, Botswana, Mozambique, Tanzania and Zambia had minimum wages of $30, $105, $112, $125, and $132 respectively.
The unemployment rate of the compared countries was also marginally lower to that of Zimbabwe.
Malawi had the lowest unemployment rate of six percent, Botswana was 18 percent, Mozambique 27 percent, Tanzania 11 percent and Zambia 16 percent.
CZI president Mr Busisa Moyo said there was urgent need for the country to raise capacity utilisation. He said as unemployment was declining so was capacity utilisation. Last year the country recorded a 2,2 percent drop in capacity utilisation ending at 34,3 percent from 36,5 percent in 2014.
“As CZI we are embarking on strategies to raise capacity utilisation to 65 percent by December 2017. In order to change our reality, we have to look at productivity and prices in depth. These things need to be controlled so that consumers do not pay more for less. There is need to educate consumers when they buy local products.
“We should also look at policies and practices. There is need to curb corruption in all departments. There should be fact based responses. There also is position and paradigms where we look at our import bill. We have to reduce it because it is too high.
With position we will be looking at geographical location of different companies and products, resource and human capacity.
Then lastly there is pace where we look at how much energy we are giving to implementation of ideas.
“If we want to alleviate the current challenges we face as a country, it is imperative for us to do internal devaluation. In that regard we will see an economy that will strive,” said Moyo.
Moyo said other interventions that can create employment were business linkage programmes, contract farming, Special Economic Zones, Education Centre of Excellence for Sadc and growing the Information Technology Industry.
Zimbabwe Congress of Trade Unions secretary general Mr Japhet Moyo acknowledged the state of the country’s economic derails.
He said as it was undeniable that Zimbabwe has the highest minimum wage, it was also imperative to look at the total average cost of a food basket for a family of six.
“We now have the information of minimum wages and unemployment rate, but then they should also show us the research of shopping basket. In Zimbabwe they have to show that the price of shopping basket is higher. So if the price of the shopping basket is higher, then it would be normal for the minimum wage to be higher too.
“In general, their products make us the consumers to demand higher wages. With the use of multi currency system we could be the ones living better lives. The US dollar is stronger against other southern region currencies,” said Moyo.
He said products produced locally were charged higher than imports which resulted in people going to shop outside the country at cheaper prices. The country in that instance loses all the foreign currency to neighboring countries.
Moyo said there was need for banks to ease their stiff regulations and work together with companies to revitalise the economy. Capitalising companies leads to creation of employment.
“Banks should give flexible loans to companies for retooling. There is need for banks to be lenient and work together with already ailing companies. There is no reason for banks to be stiff on companies in this type of situation.
“There is need for new equipment for companies to produce at full capacity. Companies and the Government should also look for partnerships from within the country going into the Sadc region. With the success of that we are sure to see decrease in unemployment,” he said.
Consumer Council of Zimbabwe Matabeleland manager Mr Comfort Muchekeza said the future of the country’s economy was dependant on Government polices. On capacity utilisation, he said it was important for manufacturers to produce quality goods to compete with foreign products.
“The Government needs to urge producers to be competitive. With the use of multi currency we should be having better improved products. However, people travel to other countries to buy what we used to produce ourselves. We have abused the US dollar because you find that what a $1 buys in Zimbabwe can buy ten times more in those countries.
“With closing of many companies in the country, it has resulted in fewer people being employed and that means less buying local products. The little foreign currency that we have is used by consumers to buy from Sadc countries things that we used to produce,” he said.
Mr Muchekeza said most of the products and goods people buy from outside the country, used to be produced in Zimbabwe and even get exported.
He said the Government needed to create a platform for companies to receive direct foreign investments. On internal devaluation he said there was need for proper thorough research and monitoring systems.
