THE collapse of Zimbabwe’s manufacturing and agricultural industries has cut the size of the economy by half and left the southern African nation with fewer people in formal employment than at any time in almost half a century.
About 700,000 people have formal jobs, almost equally split between the state and private companies, government and independent statistics show.
That’s the lowest number since 1968, when Robert Mugabe was a jailed freedom fighter, and Rhodesian Prime Minister Ian Smith’s white-minority government was under sanctions for unilaterally declaring independence from the U.K. The nation’s population was then 5.2 million compared with about 13.8 million today.
“Based on figures published by the employer organizations and the occasional announcement from government on the size of the civil service, about 700,000 people are employed in the country,” John Robertson, an independent economist, said in an interview in the capital, Harare. “People survive because they have to. Remittances sent from family members abroad are a huge element of survival.”
Thousands of Zimbabweans have flooded city streets as informal vendors of everything from tomatoes to pirated DVDs to support their families. More than 3 million others had left their homeland in search of work as of 2010, the bulk of them to neighbouring South Africa, according to the United Nations Development Programme (UNDP).
The roots of the jobs crisis date to 2000 and the start of government-backed seizures of white-owned commercial farms that displaced agricultural workers and slashed exports of crops ranging from tobacco and roses to paprika.
Inflation that accelerated to 500 billion percent prompted the government to abandon its currency in favour of the use of foreign exchange, including the U.S. dollar and South Africa’s rand in early 2009.
Now the 49% weakening of the rand against the dollar over the last four years has made many Zimbabwean manufacturers uncompetitive as they pay their costs in the U.S. currency.
With civil servant wages accounting for 83% of government expenditure, more job cuts are expected as the government seeks budget savings.
84% in informal sector
The size of the civil service has tripled in 35 years, according to Robertson. Finance Minister Patrick Chinamasa said government pay devours an “unacceptable” proportion of revenue.
Chinamasa said the exact size of the civil service would be made public after a full audit of all government departments and state-owned businesses is completed. While government employed about 315,000 people in 2009, “it has certainly risen since then,” he said in Harare in March.
A 2011 survey by the Zimbabwe Statistics Office, known as Zimstat, said that about 84% of Zimbabweans worked in the informal sector and about 11% were in formal employment. The Zimstat survey was based on surveys with 9,359 households.