The Employers Consultative Association of Malawi (ECAM) says the current economic situation, with increased cost of doing business and cost of living, has made it difficult for employers to engage more staff.
In an interview with Business News on Wednesday, ECAM executive director Beyani Munthali said the continued depreciation of the kwacha and reduced power output for manufacturing companies—which it says is now at 40 percent—is chocking employment opportunities for the country whose citizens are in dire need of income generating opportunities.
The International Labour Organisation (ILO) says that lack of economic diversification in sub-Saharan Africa has been a factor in subdued labour productivity growth, especially in comparison to other developing countries.
ILO, which recently released, World Employment and Social Outlook: Trends 2016, observes that unemployment rates for countries in the sub-Saharan Africa—Malawi included—moved up slightly to 7.4 percent in 2015 from 7.3 percent in 2014. Unemployment rates for women were estimated at 8.5 percent in 2015, up from 8.4 percent in 2014 and 6.4 percent for men in 2015 from 6.2 percent in 2014.
“The incidence of vulnerable employment remains pervasive in the region, at almost 70 percent of total employed against a global average of 46.3 percent. More importantly, this share shows no sign of decreasing in the foreseeable future, casting doubts on the region’s ability to reduce informality and improve job quality.
“In almost all sub-Saharan African countries, a higher share of women than men is estimated to be active in the category of contributing family workers in 2015,” reads the report.
The report adds that “the youth unemployment rate stood at 11.1 percent in 2015, up from 10.9 percent in 2014. It is higher for young women (12.5 percent in 2015) than young men (9.8 percent in 2015). Youth employment growth remains below overall employment growth. As a consequence, informal employment tends to be the first job for most youth in sub-Saharan Africa.”
A job seeker interviewed on Wednesday lamented that despite earning a degree in business administration from the University of Malawi last year, he is yet to secure a job.
“I have been working hard to secure a job, but I have been unlucky to the point that even internships are hard to come by,” said the graduate who requested not to be named.
However, Munthali said in Malawi—just like in the rest of the sub-Saharan African countries under study—companies and institutions are failing to add human capital due to high costs of doing business which has been brought about by the fall of the local currency. He said the situation makes it more difficult to pass over additional costs of production to consumers, who are already faced with the rising costs of living.
Munthali suggested that one way of tackling the situation would be to ensure that skills development among the country’s unemployed sector, which largely constitutes the youths, is in line with the employers’ present and future needs.
“We need to build capacity by sourcing materials that is up-to-date and engaging government and industry captains on relevance of skills being imparted in the colleges in the near future,” he said.
Munthali said the association has since, in partnership with Global Acquaintances Membership, developed a policy which will promote as well as influence government employers to take more interns in a bid to build more experienced human resource.