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Zambia needs more, better jobs to reduce poverty and inequality


Zambia needs more, better jobs to reduce poverty and inequality

Zambia needs more, better jobs to reduce poverty and inequality
Photo credit: WorldFish Center

The World Bank has launched new reports confirming that Zambia needs a lot more jobs and created at a much faster pace. They also need to be of jobs with higher wages for the majority of Zambians still trapped in poverty. We call them good jobs because they promote inclusive growth. The youthful population cannot wait.

“The Zambia Jobs Diagnostic and the Jobs in Value Chains reports are an important contribution because Zambia remains one of Africa’s youngest countries. Faster job creation for youth, women, and rural communities is crucial to reducing poverty,” said Ina Ruthenberg, World Bank Country Manager for Zambia. “

New comparable results on poverty and inequality between 2010 and 2015 in Zambia are a wake-up call. The troubling fact is that for the majority of Zambians living in rural areas, life got harder and living conditions got worse.

“As this Government starts the cycle of the new 5-year National Development Plan, its top priority is to create more and better jobs, especially for youths living in the rural areas,” said Dr. Roland Msiska, Secretary to Cabinet. He added, “Government therefore welcomes the input of the Lets Work Partnership into its job creation agenda, and will continue to engage on the policy actions needed for jobs.”

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. With the workforce growing rapidly, Zambia will only benefit from its demographic advantage over the next two generations if the economy can generate faster growth of jobs with higher productivity, particularly in agriculture and agro-processing, and in secondary towns.

The report recommends smoothening the effects of copper price fluctuations on the economy so as to facilitate investment and job creation; designing labor regulations to support the growth of formal sector jobs, and skills development to raise the productivity of farming and informal enterprises; and undertaking sectoral and regional policies to increase labor demand in high potential agro-processing and manufacturing value chains in regions with high poverty density.

These reports were presented to policymakers, and representatives from the private sector, development community, and civil society organizations. The event was hosted by the World Bank in collaboration with the International Labour Organization as part of the Let’s Work Program, a global partnership that unites organizations dedicated to providing effective solutions to harnessing the potential of the private sector in job creation. The Secretary to Cabinet, through the Jobs Office in Cabinet under the Private Sector Development Reform Program (PSDRP), coordinated representation by Government across Ministries to discuss policy actions for jobs.

The Zambia Jobs Diagnostic report contains two volumes on analytics and a policy framework for jobs. “Volume 1: Analytics” outlines the main challenges to Zambia’s jobs agenda at the macroeconomic, household, and firm levels. “Volume 2: A Policy Framework for Jobs” presents a set of policies that may be prioritized by policymakers under a jobs strategy. The “Zambia Jobs in Value Chains: Opportunities in Agribusiness“ report looks at jobs at a sectoral level, with a focus on backward linkages into value chains.

In Zambia, a need for faster and more productive job creation

The population of Lusaka, Zambia’s capital city, has grown tremendously from one million people in 2000 to an estimated 2.3 million in 2016. Much of this growth is attributed to the influx of large numbers of young people, who have fled the rural life of farming and poverty. In search of economic opportunities, Jonas Phiri 24, travelled 300 km from Katete to Lusaka, to look for a job. Unfortunately for him and many others in his shoes, it has been challenging to find a good job. For two years now, Phiri has resigned himself to selling cellphone air time on the streets of Lusaka, while he boards with a relative who lives in one of Lusaka’s over crowded peri-urban areas.

“The competition with others to sell talk time on this street has intensified. There are too many of us. Income is also irregular. But I would rather be here, than go back to the village where poverty is worse, and the order of the day,” says Phiri as he waves a wad of air time vouchers, to attract customers.

Phiri is optimistic that he will find a job with good wages in Lusaka. Such jobs however, are inaccessible to large groups of rural Zambians, especially Phiri’s age group and women. Many young Zambians and women share Phiri’s story, particularly those with little or no education.

Despite economic growth, the number and distribution of jobs did not improve

Zambia experienced rapid economic growth between 2000 and 2014. The economy grew by an annual average of 7.3 percent between 2000 and 2014, and per capita GDP grew by 4.3 percent. But at the same time, employment grew by only 2.81 percent per year. The problem is mineral-driven growth brought about by the copper-driven boom was not labor intensive enough. Wage employment has not kept up with Zambia’s fast growing workforce, productivity and hours worked for people like Jonas Phiri in the urban informal sector has not improved substantially, and smallholder farmers aren’t better off. Zambia’s growth was not shared.

New poverty analysis by the World Bank in fact shows that per capita consumption only rose for the top 3 deciles of income earners in Zambia between 2010 and 2015. The bottom 6 deciles of income earners actually got worse off in real per capita consumption. In particular, rural workers, youth and women are struggling to find the improved farm productivity and off farm jobs they need to escape poverty.

In the new National Development Plan and under the National Strategy for Industrialization and Job Creation, Government of Zambia wants to create one million jobs in 5 years, through economic diversification. Government aims to create waged jobs in non-mining sectors, including agriculture, manufacturing, and tourism. It will be a tall order to dramatically increase the number of good jobs in Zambia compared with what has been achieved during a decade of rapid growth. It will require careful prioritization of policy reforms, and strong implementation of investments under a focused jobs strategy. But the reality is, it has to be done for Zambia to maintain prosperity and stability, because over 300,000 young people like Jonas Phiri are set to join the workforce every year in the next generation.

Growth potential in sectors

On June 13, 2017, in Lusaka, the World Bank published a comprehensive study of jobs in Zambia. The study contains three reports: the Zambia Jobs Diagnostic, a policy Action Plan, and the Zambia Jobs in Value Chains. The reports stress the need for Zambia to take comprehensive action at a macro level, through institutions and labor markets, and through targeted interventions to create more demand for good jobs. The studies explicitly highlight the potential of growth in agribusiness and agro-processing to connect more Zambians, especially those that are young, rural and poor, to jobs through value chains. Policies and programs on jobs must support linking the poor working as self-employed in agriculture or unpaid family work to where the jobs are: along the central corridor from Copperbelt to Livingstone. 



Source: Dino Merotto. 2017. “Zambia Jobs Diagnostic: Volume 1 - Analytics.” World Bank, Washington, DC.

The World Bank supports Zambia’s ambitious jobs plans, as articulated in the Vision 2030 and National Strategy on Industrialization and Job Creation. The forthcoming World Bank Systematic Country Diagnostic emphasizes that inclusive growth in Zambia requires faster growth in labor incomes of the poor through jobs. As a result, the World Bank’s portfolio will be increasingly focused on supporting Zambia’s jobs agenda.

The World Bank reports emphasized that Zambia will need to invest in raising smallholder agricultural and informal productivity, supporting urbanization in secondary towns for off-farm jobs, and improving labor mobility among women and young people. The study also recommends strengthening monetary and fiscal policy to mitigate the effects of copper price fluctuations on investment and job creation; liberalizing input and product markets to reduce production costs and allow freer cross-border trade for farmers and agro-processing firms; strengthening technical training to improve productivity for the self-employed and to reduce formal sector skills gaps; and designing labor regulations to support the creation of more formal sector jobs.

The World Bank Country Manager Ina Ruthenberg is emphatic about the need to create more and better jobs for poverty reduction. “Jobs need to be at the heart of economic development policies in Zambia,” she says, “faster job creation for youth, women, and rural communities is crucial to reducing poverty. The analysis presented will help identify how Zambia can achieve its goal of creating a million jobs in five years.”


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