‘Zim should address high wage levels’

Source: ‘Zim should address high wage levels’ | The Herald October 24, 2016

Enacy Mapakame Business Reporter
ZIMBABWE should address high wage levels, which are in some cases 10 times more than those prevailing in the region, as this is contributing to the erosion of competitiveness for local products, the Minister of Policy Coordination and Promotion of Socio-Economic Ventures in the President’s Office Simon Khaya Moyo has said. Since wages are factored in the cost of production, the higher the wages the greater the cost, and this makes prices of goods and services higher.

In a speech read on his behalf by Industry and Commerce Deputy Minister Chiratidzo Mabuwa at a competitiveness conference last week, Ambassador Moyo indicated that investors, who use minimum wage as an indicator, could look elsewhere.

A regional comparison puts Zimbabwe at a disadvantaged position as its wages are significantly higher. “One erudite economist made a comparative analysis of the regional wages. He indicated that Zimbabwe offers minimum wages of $275 to $300, Malawi offers $30, Mozambique $120, Botswana $93 and Zambia $100.

“It is obvious that using this criterion of minimum wages, investors will not invest in Zimbabwe,” he said. Competitiveness is a key driver for growth and development. Zimbabwe is poorly ranked on competitiveness by global organisations.

According to the global competitiveness report, Zimbabwe is ranked number 125 out of 144 economies. Additionally, the World Bank’s 2016 Ease of Doing Business ranks Zimbabwe 155 out of 189 economies. Investors world over, take cognisance of such rankings before making any investment into a country, thus affecting foreign direct investment flows.

“Competitiveness can be enhanced through the attraction of FDI into the economy. Countries which have managed to compete on the global market have done so predominantly on the back of attracting huge FDI inflow.

“However, attraction of huge FDI inflows presupposes that our country has investor friendly policies,” said Ambassador Moyo. Countries like China, Brazil, Malaysia, Singapore, India, Rwanda and Uganda have managed to be competitive on the global market predominantly on the back of attracting huge FDI inflows.

According to the 2016 Zimbabwe National Competitiveness Report, local industry competitiveness is affected by three key factors, that is costs and fees relating to Government, utility charges and private sector inefficiencies and structural rigidities.


  • comment-avatar
    Morty Smith 6 years ago

    ZANU has the solution for this. They are going to make an inflation spiral with their bond notes

  • comment-avatar

    SK Moyo is just over exposing the idiotic zanu pf mentality – the “chandagwinyira mentality”. Dohwayi: hanzi vashandi vari kubhadhagwa mari dzakawandisa muZim. Saka, according to SKM, vanhu vose (maticha, manesi, maDoctor’s, Engineers, lecturers, etc ) vari kunyika dzose dzataugwa naMoyo “vamwe vachitogera twuchembere twevarungu mhiri kwemakungwa” as Mugabe puts its when in his happy mood, vakatiza mari kuwandisa kwayo muZim nhaii? Saka tose tinopenga vanhu veZim. Kutiza mari!

    Bvaa, Moyo awana solution yacho nhasi; ko anga aripi makore ose nhaii? Just reduce salaries & all Zimboz in Moz, Bots, Malawi, etc, will rush back home & work to develop there country. Interesting diagnostics from some former zanu pf ambassador who has been busy sleeping, puffing on duty & obviously snoring heavily. Thanks for working up “zanu pf ambassador SKM” and for making your debut by hallucinations of monumental measure.

  • comment-avatar
    nelson moyo 6 years ago

    Trust in markets comrades – wages if not adjusted will level out to equal what is paid regionally.

    With the introduction of bond notes ( the new ZW dollar number 6 or ZWDBOND$ for short or counterfeit USD)
    the market value of these bond notes ( some also call them Dr John “Bond”Mangudya notes) will collapse by 90 per cent as nobody will accept them – simple – the market will do its job to level out wages etc. in the region.

    Economics is not a difficult subject – only ZANUPF seem to find it hard to understand !

  • comment-avatar
    The worker 6 years ago

    The regional wage comparison by SK Moyo is not justified at all. Can he tell us the cost of living in those countries he compare Zim with ie What is the cost of food, accommodation, water school fees in those countries? South Africa, Botswana, Mauritius have safety nets for their citizens in the form of old people grant, child grant, foster grant, unemployment grant etc. In Zim where are they SK. You allowed the US$15billion looted Chiadzwa now you think workers are paid more for you to get even more. you are not in touch with reality.
    Zimbabwe cannot compete with its high taxes, indigenisation law that require 51% from an investor, and administered by a failed state that survive on looting. kutoita competition yokutindakaba shoma vana Jono, sorry yo