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Speaker 1: And as you know, one of the most important conversations

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Speaker 1: we have on the Money Show all the time is

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Speaker 1: about our unemployment rate and how and why nearly thirty

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Speaker 1: three percent of our people don't have jobs. But sometimes

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Speaker 1: I think we miss the fact that most of the

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Speaker 1: countries around us have the same problem. Just to throw

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Speaker 1: some numbers, Namibia's unemployment rate is nearly thirty seven percent.

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Speaker 1: In Iswatini, it's thirty four, in Lsutu it's thirty. Zimbabwe

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Speaker 1: officially claims their rate is eight point six percent, but

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Speaker 1: I think you and I both know that's not true.

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Speaker 1: So what's happening in the Southern African region that's leading

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Speaker 1: to such high levels of unemployment in so many countries?

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Speaker 1: We start this conversation with Titus mccorve and economists based

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Speaker 1: in Zimbabwe. Titus, good evening, and thank you for your time.

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Speaker 1: I've seen estimates of Zimbabwe's unemployment rate ranging from five

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Speaker 1: percent to ninety five percent. Do you have an idea

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Speaker 1: of what the real figure might be?

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Speaker 2: Okay, thank you very much for that important question.

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Speaker 3: Yes, indeed, the official figures that will get from Zimbabwe's

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Speaker 3: that inflation is sorry, unemployment is just above eight percent.

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Speaker 3: Which may be misleading, and some economic agents indicate that

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Speaker 3: the unemployment could be above eighty percent. But to what

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Speaker 3: causes this huge disparity in the figures that are disclosed

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Speaker 3: is that Zimbabwe is highly informalized and the argument that

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Speaker 3: comes from the government in Zimbabwe is that yes, indeed,

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Speaker 3: people are employed in the informal sector. Would you consider

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Speaker 3: them as unemployed or they are employed? So about seventy

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Speaker 3: percent of zimbabwe economic activity is done in the informal

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Speaker 3: sector and there's huge employment in the informal sector. So

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Speaker 3: it depends from the point of view that you are arguing.

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Speaker 3: Are you saying that those that are in the informal

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Speaker 3: sector and those that they have employed are the employable citizens?

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Speaker 3: Is employment in Zimbabwe or should we excluded from calculating

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Speaker 3: the unemployment rates? And if you know, Zimbabwe has when

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Speaker 3: has gone through a series of economic changes, structure or

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Speaker 3: changes in the economy. We were in agriculture driven economy

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Speaker 3: and a significant number of people was employed in the

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Speaker 3: agricultural sector, but there was a structure of declining that

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Speaker 3: in that creatural sector due to interventions that were done

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Speaker 3: by the government, the lend reforms, things like that. It

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Speaker 3: just significantly affected the supply chain and that is disrupted

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Speaker 3: employment formal employment in those along the supply chain. So yes, indeed,

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Speaker 3: it's always a problem that we have in Zimbabwe in

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Speaker 3: that do we classify people that are employed in the

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Speaker 3: informal sector, is employed or should we exclude them. If

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Speaker 3: we do include them, yes, the unemployment rate in Zimbabwe

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Speaker 3: is significantly low. But if we are to exclude those

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Speaker 3: that are into subsistence way of surviving and those that

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Speaker 3: are employed in the informal sector, you find that unemployment

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Speaker 3: rates Zimbabwe is significantly high. So the form formal employment

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Speaker 3: in Zimbabwe excluding the informal sector, yes, it's what are

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Speaker 3: some trend. But if we are to filter in the

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Speaker 3: informal sector and those that are employed in the informal sector,

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Speaker 3: you find that the unemployment red is significantly low. So

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Speaker 3: that is the reason why we have got a huge difference,

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Speaker 3: is huge margins in terms of the figures that are

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Speaker 3: disclosed in terms of the unemployment rates in Zimbabwe and titles.

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Speaker 1: I mean, has the government over the years, and they've

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Speaker 1: been different presidents and power, has it just not invested

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Speaker 1: in development and moving away from mining and of course

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Speaker 1: agriculture's decline so quickly.

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Speaker 3: So so you find that we have moved in phases

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Speaker 3: and the economic cycles in Zimbabwe, they move very fast.

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Speaker 3: We move into economic recessions quickly, we move into economic

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Speaker 3: recovery as quickly we get into booms and then we

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Speaker 3: got into the slums like again.

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Speaker 2: So that is significantly affected.

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Speaker 3: The police approached by the government in terms of trying

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Speaker 3: to create unemployment and the focus in Zimbabwe mainly has

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Speaker 3: been drifted away a build from employment police targets to

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Speaker 3: mainly targeting inflation. Was the problem that we've experienced over

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Speaker 3: the last ten years or so.

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Speaker 2: He has been inflation.

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Speaker 3: We have recorded the highest levels of inflation in the

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Speaker 3: world some figures by the end of two thousand and eight.

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Speaker 3: If I'm mistaken, we're not even able to covert inflation.

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Speaker 3: So the focus of Zimbabwean policies mainly you have been

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Speaker 3: on current stability as well as inflation targeting. We have

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Speaker 3: not been really focusing as a country on unemployment. But

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Speaker 3: to answer the question, years the government has been trying

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Speaker 3: to come up with ways in supporting the supply chain

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Speaker 3: along the war supply chain because these dependence on extraction industry. Yes,

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Speaker 3: it creates serious problems of unemployment and the significant about

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Speaker 3: s underd percent of economicativity in Babwe is around the agricultural.

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Speaker 2: Sector, of which it was disrupted by lend reform.

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Speaker 3: So most of the people that are in the creatural sector,

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Speaker 3: which is the primary or the first first stage of

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Speaker 3: the supply chain, they are a significant number of people

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Speaker 3: that are there and it does affect the wole supply chain.

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Speaker 2: And this is the cost of doing business is significantly.

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Speaker 3: I saw you find that areas such as the manufacturing

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Speaker 3: sector in the civil sector actually first significant.

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Speaker 2: I love II coast of running business.

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Speaker 3: That's why we have been mainly relying on them on

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Speaker 3: the primary sector. But of related the government is trying

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Speaker 3: to come up with an economy that is private sector

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Speaker 3: driven by supporting the manufacturing center. To register business only

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Speaker 3: five firs are going to take about thirty days or more.

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Speaker 3: But of late they've come up with ears of doing

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Speaker 3: business reforms in order to support that is of doing

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Speaker 3: business a site by producing the the licenses as well

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Speaker 3: as some registrations is which are district in growth in

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Speaker 3: the latter stages of the subplachin.

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Speaker 1: When I am title nakover, I'm afraid we are going

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Speaker 1: to have to leave you there. Thank you. I really

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Speaker 1: appreciate a very clear explanation. And economists based in Zimbabwe.

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Speaker 1: Doctor Padil Hotler is our former statistician in general, but

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Speaker 1: a man with a lot of experience of the situation

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Speaker 1: in la suited Doctor Hotler, good evening, Good to talk

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Speaker 1: to you again. The unemployment rate in Lasuitu is thirty percent.

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Speaker 1: Why is it so high there?

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Speaker 4: Oh? Yes, Lusutu unemployment relatively high, not really far from

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Speaker 4: the line in South Africa. But this unemployment came about

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Speaker 4: punctually since the mining activities in South Africa's flood. Otherwise,

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Speaker 4: Lasuti enjoyed the levels of employment that we're very high.

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Speaker 4: For one hundred thousand or two hundred and thirty thousand

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Speaker 4: men would be employed in the mines in South Africa

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Speaker 4: and maybe another five thousand people employed in their farms

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Speaker 4: in South Africa. So those levels of atlantic this current

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Speaker 4: levels of unemployment. Saying with the closure of the mining industry,

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Speaker 4: particularly in the gold there to amiliorate the situation, there

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Speaker 4: has been a lot of manufacturing that came by, particularly

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Speaker 4: employing women. Agriculture, Yes there is, but drought and land

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Speaker 4: erosion minimized the scale at which agricultures performed, although I

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Speaker 4: could see now that the kind of stock livestock that

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Speaker 4: was true now really improved quite improved. The Centental, the

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Speaker 4: Brahman they moved away from the Africana and unfortunately also

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Speaker 4: from the Gurli had bulls. They they've moved to the

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Speaker 4: Brahman Cenental and then of course ship So our culture

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Speaker 4: is a very predominant that time, but largely in animal husbands.

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Speaker 4: But yes, the unemployment have increased because of the closure

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Speaker 4: of mind industries of Africa.

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Speaker 1: And has the government there not try to develop the

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Speaker 1: economy there to employ Basuto people in Lasutu.

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Speaker 4: They have, but they's very difficult when historically you have

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Speaker 4: a relationship with the country for over two hundred years

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Speaker 4: where you're almost your structure of society is destined to

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Speaker 4: a mind to work in the minds, come back home

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Speaker 4: to the so too now young boys go over through

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Speaker 4: their circumcision schools, and then you can see that that

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Speaker 4: culture emerging. And it's previously there was the way out,

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Speaker 4: which meant a person once it's gone to in the

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Speaker 4: world and we're on't the minds and then come back.

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Speaker 4: But now people are trapped in the of course, if

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Speaker 4: they think like the highlands, what are scheme and the

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Speaker 4: what there's a lot of construction.

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Speaker 1: There, Doctor Pardi Lahotla, thank you, our former statistician general.

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Speaker 1: But as you can hear vast experience of Lsutu, Isaac

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Speaker 1: Matzerho's an economist at ned Bank. Isaac, good evening. I

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Speaker 1: mean they're very variable estimates for unemployment in Mozambique. I

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Speaker 1: presume there's a big informal sector there too. Which figure

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Speaker 1: do you think is the most accurate?

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Speaker 5: Well, Stephen, if we have to look at formal sector employment,

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Speaker 5: I will say that, you know, it's praasically the mining sector.

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Speaker 5: We've got the fishing sector and you know now the

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Speaker 5: construction of the L and gfils and tourism, so you

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Speaker 5: know it's it's sort of a similar situation in South Africa's.

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Speaker 5: You know, unemployment could be as high as stay till forty.

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Speaker 5: But as you highlighted, you know, the informal sector is

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Speaker 5: quite big in Mozambique, so that tends to you know,

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Speaker 5: be a source of income for the rural communities.

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Speaker 1: In particular, the MOSL smelter is closing, and I mean

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Speaker 1: some figures say it's been responsible for five percent of

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Speaker 1: Mozambiques GDP. I mean, I presume that's going to push

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Speaker 1: unemployment or formal unemployment if I can use that phrase

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Speaker 1: still higher.

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Speaker 5: Sure, the numbers I've seen indicate that five thousands direct

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Speaker 5: jobs will be lost, and the number for indirect jobs

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Speaker 5: i e. All the suppliers for restance to this muscle plant,

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Speaker 5: it's estimated at almost double that. So definitely that's a

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Speaker 5: huge impact on the Mozambiquin economy, only not only through jobs,

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Speaker 5: by the way, but also text collections for instance. You know,

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Speaker 5: the estimate is that muzzle directly accounted for about zero

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Speaker 5: point two percent of government taxes, so the most boiling

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Speaker 5: up the plant is unfortunately a negative factor for government finances.

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Speaker 1: Isaac, I mean, the real bigger question with all of

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Speaker 1: this is we have these really high rates of unemployment

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Speaker 1: across Southern Africa. Are there any particular reasons as to

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Speaker 1: why it's so high across this entire region? I mean,

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Speaker 1: there are other countries in the world with high unemployment,

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Speaker 1: but for us, it's the entire region.

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Speaker 5: Stephen, I always sort of argue that it is due

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Speaker 5: to the history of dependence on primary sectors, particularly mining,

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Speaker 5: the Southern African economies unfortunately have not been able to

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Speaker 5: significantly di specify from the mining sector primarily and even

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Speaker 5: or the excuse me, some of the major sectors are

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Speaker 5: highly tied to mining, and that we've seen mining being

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Speaker 5: on decline relative to other sectors across the globe for

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Speaker 5: a number of decades. So as a result of that,

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Speaker 5: you know, unfortunately South Africa, Southern African economists have not

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Speaker 5: been able to create jobs on a large scale.

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Speaker 1: I mean, all of this was foreseeable, and I realized that,

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Speaker 1: you know, there's a very difficult political history in these countries,

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Speaker 1: but all of the governments at the time, no matter

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Speaker 1: which government they were, would have known mining wouldn't go

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Speaker 1: on forever. And yet it seems that none of them

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Speaker 1: really did much about it. I mean, do we need

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Speaker 1: to stop seeing unemployment is just a South African problem

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Speaker 1: and see it maybe as a regional problem.

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Speaker 5: It is definitely a original problem. And I will say

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Speaker 5: to you, you know, another point I'll add is that

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Speaker 5: historically we know that the South African mining sector, which

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Speaker 5: was much bigger than in the region, drew a lot

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Speaker 5: of labor from the neighboring countries. So with this African

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Speaker 5: mining sector shrinking at least relative to the science of

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Speaker 5: the economy. We saw employment being lost and of course

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Speaker 5: that affected neighboring countries such Assoto for reastance. And you know,

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Speaker 5: we've been quite slow in diversifying, and that diversification, for instance,

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Speaker 5: should have started with upskilling labor in Southern Africa, you know,

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Speaker 5: moving away from the primary sectors and ensuring that, for instance,

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Speaker 5: the educational outcomes are better and help or at least

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Speaker 5: pushed the labor forcess chances of being chainable in non

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Speaker 5: mining sectors of the economy.

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Speaker 1: So I mean, if you look, the regional economic history

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Speaker 1: of Southern Africa is kind of still in a way

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Speaker 1: being dominated by what dominated it from I suppose around

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Speaker 1: eighteen fifty, the discovery of diamonds in Kimberley, then the

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Speaker 1: huge influx of people into the advatas runt when gold

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Speaker 1: was discovered after eighteen eighty six. We all are kind

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Speaker 1: of suffering from the same problem, the same kind of

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Speaker 1: I don't know, what would you call it a minerals

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Speaker 1: hangover if.

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Speaker 5: You like, yeah, you know, like economic history, you know,

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Speaker 5: literally a faid as the Dutch disease or the case

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Speaker 5: of natural resources if you like, and this is basically

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Speaker 5: referred to economists that were based on natural resources have

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Speaker 5: and sort of you know, grew there very high dependence

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Speaker 5: on natural resources. Can extend that when they are natural

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Speaker 5: resources were depleted, those economists were not able to move

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Speaker 5: away from that dependence. You know, it's happening a lot

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Speaker 5: in Botwana right now, Bosana and even Namibia and Ancola

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Speaker 5: to a large extent due to the decline in the

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Speaker 5: market for natural diamonds. Those economies are just under so

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Speaker 5: much pleasure and diversification of what have not really benefited

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Speaker 5: or really brought in you know, significant results.

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Speaker 1: If our economy, South Africa's economy starts to grow again

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Speaker 1: and we created jobs, would that have an impact on

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Speaker 1: our neighbors listuit to Mozambique, Namibia.

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Speaker 5: Well, I mean, we've got to be honest about the

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Speaker 5: fact that we draw a lot of labor from these economists.

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Speaker 5: But even you know, in addition to that, let me

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Speaker 5: say we as suppliers of goods and services to the

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Speaker 5: laboring economists, and what would they have to happen in

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Speaker 5: those economies is that, you know, they would have to

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Speaker 5: generate secondary jobs from the economics in talentages with South Africa,

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Speaker 5: i e. You know, just don't just buy finished goods

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Speaker 5: from South Africa. You can source you know, semi processed

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Speaker 5: are goods and then you know there's value feather value

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Speaker 5: addition in those economies that would be quite helpful in

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Speaker 5: creating jobs in those economies.

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Speaker 1: Isaac Matzko, economists at Netbank, Thanks very much