Blantyre – A year after promising to create one million jobs within 12 months of taking over government, Malawi’s Tonse Alliance led by President Lazarus Chakwera says it is going all out to unleash the power of the youth to accelerate socio-economic transformation.
The Alliance promised to make “job activation and creation” the focal point of government policy through establishment of mega farms, promoting and supporting SMEs, establishing youth loan facilities, and improving labour productivity.
This week, Information Minister Gospel Kadzako conceded they had failed to hit the one million jobs target in the anticipated timeframe, but the government was diligently pursuing its economic development objectives.
“It is sad to say that in the first year, we have been busy trying to stabilise the economy and setting up systems and structures in the government because when we took over power these were either dysfunctional or non-existent,” he explained.
About 20 percent of the country’s labour force is unemployed; 27 percent of those in employment are underemployed; and 89 percent are informally employed, according to available data. The unemployment rates are highest among people aged 15-29 years (30 percent).
The government has been trying to pursue its targets in an environment characterised by COVID-19’s impact on productivity and high inflation rates.
President Chakwera’s government has focused on creating an enabling environment for private sector growth as the fulcrum for job creation; as well as including promotion of SMEs by enhancing their management capacities and access to financial services; and improving key economic infrastructure to ensure reliable energy, transportation, and communications services.
For the 2021-2022 Budget, Finance Minister Felix Mlusu announced several government efforts to increase job creation, including programmes to enable SMEs to produce quality products for local and export markets.
Minister Mlusu highlighted that the government had enacted regulations under the Public Procurement and Disposal of Public Assets Act to empower small businesses to participate in public procurement and provision of goods and services.
“The SME public procurement order is expected to prioritise locally made products to enable the SME sector, where most of its players are in the informal category to contribute towards national development through participation in public procurement and remittance of taxes,” said Minister Mlusu.
Further, the Reserve Bank of Malawi established a structured minerals market and started buying gold from artisanal and small-scale miners.
Meanwhile, Minister Mlusu said government had rebranded the Malawi Enterprise Development Fund into the National Economic Empower Fund, with renewed focus on empowerment of youth and women, and support for agricultural productivity and value addition.
According to a government policy brief, Malawi will provide incentives to attract FDI, such as tax holidays for new and existing companies that pledge to generate defined levels of jobs for youth.
The government wants to enhance agricultural productivity and profitability by diversifying and modernising activities, promoting value addition, reforming produce marketing systems and pricing policies, and building resilient systems to minimise the impact of climate change.
Efforts to expand investments in other potential areas of comparative advantage such as tourism, fish production, mining, and ICT are also underway despite low savings and investment ratios as a percentage of GDP, reflecting inefficient resource mobilisation that constrains domestic investment.
Government is further addressing the deteriorating fiscal conditions, characterised by wide budget deficits and high government expenditure and the depreciation of the country’s currency against major currencies.