Graduate vendors – a clear sign of failed govt policies

Source: Graduate vendors – a clear sign of failed govt policies – The Zimbabwe Independent June 3, 2016

RECENT revelations that more than 2 000 university graduates in Harare and Bulawayo have resorted to street vending as a means of survival are a damning indictment on the government’s failure to manage the economy competently and create employment for millions of the country’s jobless population, analysts say.

By Kudzai Kuwaza

They say it is also a key indicator of the country’s economic demise under the stewardship of President Robert Mugabe.

According to a survey by the Vendors’ Initiative for Social and Economic Transformation (Viset) conducted between February and April this year, at least 2 187 graduates in the country’s two largest cities are surviving on vending.

The report titled Unemployment and Economic Shrinkage: From University to the Street revealed that 381 graduate vendors additionally hold postgraduate qualifications. Approximately 75% of them have never been employed.

The statistics are a clear testimony of the desperate state of unemployment in a country with an imploding economy characterised by a debilitating liquidity crunch and cash shortages. Capacity utilisation has plummeted from 57,2% in 2011 to the current 34,3%, partly explaining the widespread company closures and the attendant massive job losses.

This a far cry from the lofty promises made by Zanu PF in 2013 in its election campaign manifesto to create 2,2 million jobs by 2018. Thousands of workers lost their jobs last year after a July 17 Supreme Court ruling allowed employers to dismiss workers on three months’ notice without paying a retrenchment package. Trade unions estimate that nearly 30 000 jobs were lost, while the Employers’ Confederation of Zimbabwe put the figure at 9 115 workers.

Whatever the real figure, it is clear that the job market has been decimated, especially when this adds to the closure of 4 610 companies which resulted in the loss of 55 443 jobs in a three year period between 2011 and 2014 as revealed by Finance minister Patrick Chinamasa in his 2015 budget statement.

The sad plight of students is made more acute in that thousands of students are being churned out by the country’s state universities with no corresponding jobs to absorb them.

Alarmed by the rapidly growing number of unemployed graduates on the streets, Higher and Tertiary Education deputy minister Godfrey Gandawa in June last year said his ministry had signed agreements with several countries for labour exportation — another admission of failure — officially termed “brain circulation”.

Gandawa also said this would benefit government as the countries would pay as well as cater for the welfare of staff.

To this end, government said it is drawing up a database of unemployed graduates dating back to 1980 with a view to sending them to countries such as Botswana and Angola.

The invitation for skilled workers to ply their trade abroad is in stark contrast to an ambitious skills retention programme carried out by government in 2006 in order to fight the debilitating brain drain prompted by the country’s economic meltdown.

The programme’s aim was to offer incentives for Zimbabweans in the diaspora with critical skills to return to the country. Millions of Zimbabweans are immigrants or economic refugees all over the world, as the country’s economic fortunes continue to worsen.

Economist and Buy Zimbabwe chairman, Oswell Binha, said the sad state of affairs shows the lack of correspondence between the development of human capital and the country’s ability to absorb graduates.

“The government has gone into a massive production of human capital and have not attended to the flip side which is the country’s ability to absorb the human capital,” Binha said. “There has been an oversupply of developed human capital against an undersupply of opportunities and positions to be filled.”

Binha said there was an urgent need for government to develop productive sectors in the economy which dovetail with the various human capital skills being imparted in tertiary institutions through an appropriate mix of policies. He added that the Stem programme put in place by government emphasising the study of scientific subjects should be implemented with the industry’s capacity of absorbing them when they graduate.

“As long as this intrinsic link is not addressed students will finish Stem and go and sell airtime,” Binha said.

Economist and Bulawayo South MP Eddie Cross said there was need for leadership renewal to reverse the country’s decline.

“The graduates going into street vending are a tragic waste of human resources,” Cross said.

“We need new leadership and new policies because the old leadership and old policies have failed.”

The effect of this on government revenues has been devastating. Tax collections, including Pay-as-You-Earn revenue, continue to plunge, according to a first quarter report of 2016 by the Zimbabwe Revenue Authority (Zimra) chairperson Willia Bonyongwe.

Bonyongwe said companies owe Zimra US$692 million in income tax, up from US$578 million last year.

“This largely reflects the incapacity of most companies to pay, some of which may no longer be operational. In the short term, this tax head will remain under pressure and performance is not expected to improve all things remaining equal,” she said.

She said individual tax collected in the quarter amounted to US$167,43 million which fell short of the targeted US$196 million and a further reduction to the US$200,18 million collected during the same period last year.

She added that value-added tax on imports and customs duty both dropped by 1% to 12% and 9% respectively. Corporate income tax contributed US$52,55 million which was a miss on the targeted US$76 million.

Government is feeling the pinch of company closures as it now struggles monthly to pay its 550 000-strong workforce. Official figures show that the public sector spending accounts for 83% of total revenue.