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How can Zambia create 1 million jobs?

Ina-Marlene Ruthenberg's picture
What needs to happen over the next five years if Zambia’s National Development Plan to reduce poverty and inequality is to be realized?
What needs to happen over the next five years if Zambia’s National Development Plan to reduce poverty and inequality is to be realized? (Photo: Arne Hoel/World Bank)


During a meeting with top government officials in Zambia recently, the World Bank Regional Vice-president for Africa, Makhtar Diop, asked what was at the top of their minds. "Jobs!", was their unanimous response. He turned around to his team and said: "Please continue to focus on jobs and support the government in achieving their ambition." Indeed, jobs is an issue we have been focusing on in Zambia for over a year.

Job creation has become a mantra in the country, since the government has set the goal to create a million jobs in key sectors over the next five years under the Seventh National Development Plan. But, despite this ambitious target, two World Bank reports presented this week are a wake-up call for Zambia: Despite solid economic growth, extreme poverty increased in Zambia, and inequality widened. While Zambia's economy grew rapidly between 2000 and 2014 at an average rate of over 7 percent, employment only grew at 2.8 percent. In other words, job creation has not kept up with the countries' robust economic growth. According to the reports, the gaps in labor market outcomes and earnings across Zambia are widening: between formal and informal workers, between rural and urban workers, between regions, and between unskilled and skilled workers. This means that for the majority of Zambians living in rural areas life got harder, and living conditions got worse. The challenge is particularly severe for the youth.

What needs to happen over the next five years if Zambia’s National Development Plan to reduce poverty and inequality is to be realized?

First, Zambia must create many more jobs. Just to keep the unemployment rate steady around 7.5 percent, Zambia must add 300,000 new jobs every year, three times as much as the current wage jobs created every year. To achieve inclusive growth in fact, 11.8 million new jobs must be created in Zambia by 2050.

These must be better jobs as well, meaning jobs at higher levels of productivity, with higher wages and higher earnings. To be inclusive they must be available especially to the majority of the population which lives with less than $1.90 a day, and mostly in rural areas. Jobs have to go where the poor are by investing in rural growth poles like secondary rural towns linking agricultural production with agro-processing.
 
The youthful population cannot wait. Zambia remains one of Africa’s youngest countries, but it can only benefit from its demographic advantage over the next two generations if the economy can generate faster growth of jobs for youth, women, and rural communities. Without more, better and inclusive jobs, Zambia’s economic growth will not be inclusive, and inequality gaps will only become wider.

To address these gaps and support the country's job creation strategy, the World Bank has developed a Jobs Diagnostic report to help inform the policy debate and the formulation of policies based on evidence, facts, and figures. The report points towards three policy dimensions:

  1. The need for macroeconomic management and regulatory policies to be made with jobs in mind. For example, when choosing tax instruments or to reducing entry costs for new firms.
  2. Strengthening labor supply and skill policies to expand Technical and Vocational Education and Training (TVET) programs though tax incentives for firms offering on-the-job training, and to encourage the growth of formal jobs through subsidizing social security payments for low-wage jobs.
  3. From a labor demand side perspective, promoting sectoral and regional policies in high potential value chains, including agro-processing and manufacturing. For example investments in public hatcheries for aquaculture promotion.
To examine areas with job creation potential, we’ve also put together a value chain analysis, which provides a closer look at how two sub-sectors — poultry and aquaculture — can create more and better jobs for rural people in Zambia.
 
To quote Dr. Roland Msiska, the secretary of Zambia's cabinet, “People escape poverty through better jobs." He also emphasized the need for "cleaner jobs" being mindful of the environmental impact of growth and labor. The World Bank is committed to work together with the government and the private sector to promote those urgently needed jobs to help lift Zambians out of poverty.
 
This work has been made possible through a grant from the World Bank’s Jobs Umbrella Trust Fund, which is supported by the Department for International Development/UK AID, the governments of Norway, Austria and Germany, the Austrian Development Agency, and Swedish Development Agency SIDA.



Click for the press release and a feature story on the studies. 


Follow the World Bank Jobs Group on Twitter @wbg_jobs.