By Mbatjiua Ngavirue WINDHOEK The growing unemployment problem in Namibia could potentially pose a serious threat to the peace and social stability the country has enjoyed since independence. Unemployment has an important impact on poverty, homelessness, family cohesion and even human rights as it denies those affected the right to human dignity. It leads to despair, hopelessness and ultimately social evils such as increased crime, violence, family break-up, alcoholism and prostitution. Based on the 2004 Namibia Labour Force Survey, the country’s unemployment statistics are frightening by any standards. Using the strict definition of unemployment, which counts only those who are unemployed and still actively seeking work, it is a deceptively low 21.9 percent. When applying the more realistic broad definition of unemployment, which includes those who have simply given up looking for work, the figure is a staggering 36.7%.This means that out of the total 223ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 281 unemployed people in the country in 2004, 115ÃÆ’Æ‘ÀÃ…ÃÆ”šÃ‚ 162 were able and willing to work but gave up hope of ever finding a job. The figures are even more dismaying when one looks at unemployment among women and youth separately. The unemployment numbers for women are 43.4 percent, but for school-leavers 25-years-old and below the figure is a disheartening 60-70 percent unemployment rate. Lost Generation Youth unemployment is potentially the most explosive crisis facing the country and could lead to widespread social dislocation and discontent. During the apartheid era – before independence – black people had no real expectation of being able to live even a half-decent life. Independence was supposed to have changed that, leading young people to believe that if they studied hard and acquired the necessary qualifications they could look forward to a good life. Whether explicitly, or implicitly, they were promised heaven on earth and now feel badly cheated by the system and robbed of their future. One leading expert recently pointed out that ten years ago virtually anyone graduating from the University of Namibia could expect to be snapped up into a top job almost immediately. Now the country is beginning to see a situation where university and polytechnic graduates languish for even three, four or five years before finding a job appropriate for their qualifications. Diversification Andrew Ndishishi, Permanent Secretary at the Ministry of Trade and Industry, says the Government is extremely concerned about the unemployment situation. According to him the Government is trying to do everything it possibly can to reduce unemployment by creating additional job opportunities. However, it faces several challenges, and one of the main ones is that the Namibian economy is so heavily dominated by the primary sector. Climatic conditions affect the fishing industry, which means that sometimes fish are just not available. Consequently the factories and canneries are also affected and have to lay off workers. In agriculture, there is the problem of droughts, which threaten job opportunities in this sector. “What we are trying to do is diversify the economy by increasing the contribution of the manufacturing sector in order to increase job opportunities on a sustainable basis,” Ndishishi says. Another area the Government is looking at is developing the service sector. “We believe the service sector can contribute greatly to employment, which is why we are making efforts in the transport and logistics sector, construction, communications and tourisms,” he adds. Structural Problems Herbert Jauch of the Labour Resource & Research Institute (LARRI) says the unemployment crisis is of such proportions that it is difficult to understand why people ignored it for so long. He is however encouraged by the fact that Prime Minister Nahas Angula raised the issue after returning from leave at his village after the December holidays. Unemployment, he explains, is mostly of a long-term nature, brought about by structural problems. These structural problems ensure that the Namibian economy simply does not generate enough jobs to keep up with the number of people entering the workforce. The manufacturing sector has remained very small since independence and employed less than 25,000 people. The whole mining sector in Namibia creates only 5,000 jobs, much lower than the number at independence because of greater efficiencies brought about by technology. One expert points out that at independence, the then TCL copper mine, employed 7,200 people alone at peak production. “We are stuck in terms of employment creation. Since independence people have hoped that the private sector would create more jobs but this has hardly happened,” he notes. Local Processing Namibia still imports almost all its consumer goods, and we export most of our consumer goods in an unprocessed form. He points out that even the recently signed new agreement with Namdeb and De Beers stipulates processing of only 16% of diamonds locally. Namibia’s fishing companies only partially process the country’s fish resource domestically, and the rare and valuable Devil’s Claw is manufactured into pharmaceuticals overseas. Jauch advocates several measures the country could take to make a dent in the intractable unemployment problem. The first one is to adopt a policy of systematic processing of the country’s natural resources inside Namibia and a moratorium on the export of unprocessed raw materials. He further urges the State to adopt a more developmental role, meaning it should not just wait for the private sector to create jobs. State Intervention The State should intervene to kick-start industrialisation, which is what happened in most South East Asian countries leading to the emergence of the much-vaunted Asian tigers. “I am not advocating a State Planned Economy, but a move away from just allowing market forces to determine development,” he explains. The State would identify possibilities for creating manufacturing industries as part of job creation efforts. The idea is that it would then support manufacturers, including SMEs to develop and create those jobs. He also suggests the state should make rules to encourage local shops to sell locally produced goods. In addition, he feels the State could also provide a certain amount of protection for local producers against unfair competition from outside. Asked whether this would not bring Namibia into conflict with the World Trade Organisation (WTO), he says that as a WTO member the Namibian government had the right to fight what it regards as unfair rules. In the short term, Jauch advocates labour-based work to alleviate unemployment. “This would only be a partial and not a complete solution because in the long-term we need to restructure our economy and move towards manufacturing. There is a gap between the primary sector (mining and fishing) and the service sector that needs to be filled by manufacturing,” he feels. Foreign Investment Jauch says that another aspect to solving the unemployment crisis is how the country deals with foreign investment. “Currently the Government hopes foreign investment will solve the unemployment problem but Namibia is a net capital exporter. Double the amount of capital leaves the country than what is coming in,” he points out. The country needs to look at how it can use local resources for local economic development. Namibia, he says, should only seek foreign investment in those areas where the country does not have sufficient resources and know how. Whenever we receive foreign investment, we also need to insist on a mechanism for skills and technology transfer. Prescriptive Laws Secretary General of the Namibian Employers Federation (NEF), Tim Parkhouse, is as worried as Jauch is about unemployment but takes a slightly different view on the causes of, and solutions to the problem. “The NEF is very worried about the employment situation because our mission is to promote the growth of employment in Namibia,” he stresses. Parkhouse points out only 20,000 jobs have been created in the formal sector in the 17 years since independence. He says enough jobs are not created. The country needs to create jobs and to do that it needs to attract investors. “Labour laws should not be too prescriptive, but should rather be there to act as a safety net,” he argues. When Namibia’s new Labour Act becomes law, annual leave will be set at 20 days, and provides for 5 days compassionate leave. South Africa only grants employees 15 days annual leave, while in Lesotho it is only 12 days, and no other SADC country has legislated compassionate leave for employees, Parkhouse adds “We need to attract investment and encourage local businesses to expand and invest. But if the cost of employment increases people will turn to mechanisation,” he says. He recently found that 20-30 casual labourers lost their jobs at a big distribution warehouse. Because of the rising cost of labour the company turned to using forklifts. “This is the kind of reaction we have had,” he says with a sense of frustration in his voice. Affirmative Action The onerous requirements of the Affirmative Action Act (AAA) also place a heavy administrative burden on companies. The AAA only applies to companies with more than 25 employees, and according to Parkhouse, many businesses have now decided to reduce their staff numbers to below 25 through a process of natural attrition. “It is not because they don’t agree with the principle of affirmative action, but because of the red tape and the amounts of time they have to spend preparing affirmative action reports,” he says. Other problems looming on the horison are imminent power shortages, inadequate vocational training and an escalating brain drain from the country, particularly in the financial sector. Another aspect is that the public service has grown from 42,500 posts at independence, to a massive 77,800 posts filled in 2006/2007. The size of this huge bureaucracy places a massive tax burden on businesses and individuals that stifles investment and entrepreneurship, Parkhouse points out. (J