What are the main causes of high unemployment in Zimbabwe? How serious a problem is it? Will land resettlement and HIV-AIDS ease or worsen the situation? Give reasons.

Essay by VikkyUniversity, Master'sB, September 2004

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The unemployment rate is the proportion of the economically active population that is unemployed and actively looking for employment. In 1990, Zimbabwe embarked on a programme of Economic Reforms popularly known as Economic Structural Adjustment Programme (ESAP) and 1991-1992 saw one of the worst droughts. With close to 70% of the population living in the rural areas (CSO 1992) and dependent on agriculture for their livelihood, this constituted a major disaster. One result of these events was increased migration to the urban areas by people in search of employment. A further drought in 1995-1996 compounded the effect. Worsening economic conditions plus ever increasing corruption and crime have been the norm since 1995. Unemployment is currently soaring and the current rate stands at 70%. This has been from retrenchments, business closures e.t.c. According to EMCOZ survey, about 6000 jobs in the different sectors of the economy were lost by the end of 2001.

The figure for 2002 was much higher as a result of the worsening business environment as the government fails to create opportunities to stimulate industrial expansion.

Causes of Unemployment

Unemployment is Zimbabwe has been caused by quite a number of factors. Most of these are mainly because of political reasons. The following are some of the factors that are causing unemployment:

Sluggish investment and growth

Weak export performance

Poor macroeconomic policy environment

The investment/business climate is unfriendly

Population growth rate/age structure

The growth path - reliance on primary products - is suboptimal

Geography (proximity to South Africa, no direct access to the sea)

Tertiary Education

These are now explained below:

Sluggish investment and growth

The investment and growth of the Zimbabwe Economy has been shrinking of late. This has had a significant impact on the Zimbabwean companies. In the past 3 years, over 500 companies closed operations...