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Saturday 19 January 2019
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The tipping point of unemployment

Christmas is here and many out there are romancing their bonuses, making head-rushes into shopping centres with bold expectations of instant cashflow, oblivious about the rising tide of unemployment.
 
We always dig deeper in our pockets whilst surpassing our convictions of how bleak the picture is in domain of unemployment. December is a month of high expectations as we reflect on our yearly breakthroughs and outpour of blessings.
The high school and tertiary graduates are preparing resumes for new potential appointments and interviews in 2017, seeking employment recognition in a narrowing job market.
 
The true fate lies in the minds of the once credible breadwinners that stand by the road-side and others that wallow mercilessly under the scorching sun. In this desperate times we guzzle on prayers and seek potent ways to tap into some form of compensation as depression of some are ready to bust their mental fuse. We drift away from the realities of the traumatic onslaught resulted by the staggering fall in jobs.
 
In recent headlines we see more “dream killers” than “dream feeders”, the way things are going, I don’t know. Just like Marvin Gaye says it really “Makes me wanna holler”(Song Inner City Blues). The current news headlines are a good reminder of how the destinies of job seekers are hijacked by a fray of broken development promises, the economy is like aged lady sitting in a wheelchair refusing to walk after a TB Joshua miracle crusade. This time around job creation should get on the operation table and undergo some serious deep surgery with adjustments, cuts, implements and reconstructions.
 
The RCC is facing a possible shutdown whilst some time ago they partnered into a monopolistic bitumen shareholding deal.
 
This is so unexpectant while they have so much plant equipment whilst there is need for serviced erven. RCC was formerly known as “Paaiekamp” of “Teerkamp” and formerly employed diverse number of men. When outsourcing of road construction tenders surfaced under Roads Administration, the highly-inflated road tenders deepened the line institution’s financial demise. Some key former employees of the institution benefited from these tenders to become multi-millionaires.
 
The works ministry is responsible for the country’s key infrastructure projects and is responsible for a large number of job creation in engineering, construction and auxiliary works. Their position on job creation supersedes that of the entire private sector in construction as they spearhead national development.
Recently more engineers where brought in from abroad and I linker as to what will happen to them in this time of cuts, considering the high costs of maintaining their stay in Namibia. Reportedly, more projects are halted for 2017.
 
Job creation is a cross cutting economic principle and it influences every facet of our social wellbeing. Job creation has strongly dependence on predictions and interventions based on development budgets and infrastructure demand. Previously, The Ministry of Economic Planning formerly known as the National Planning Commission was responsible for setting out employment creation initiatives such as TiPEEG but now there is no clearer streamlined instrument for 2017 that I am not aware of.
 
State owned enterprises plays a vital role in capturing and cultivating more experienced, competitive and educated pool of employees with above average remuneration. In the current situation, most of the SOE’s tend to depend on bailouts and the credibility of their financial stability remain unknown. The picture depicts that liquidity of the central government is indirectly drained from all corners especially its primary sources of income.
 
The most sporadic pattern in budget cuts will be depress the employment sector with unprecedented labour capping and appointment constraints, followed by shedding and layoffs.
According to www.romeconomics.com, the causes of high unemployment on the government is:
 
  • Lower tax revenues – government will receive lower taxes.
  • Lower economic growth – the GDP growth will slow down and depress income.
  • Higher welfare costs – more people will be claiming benefits and expect more from the government and they will be depending on the few that are employed.
 
The effect on companies is:
  • Lower wage costs – there will be downward pressure on wages as people will be desperate to work for any amount and more workers might be exploited.
  • less demand for goods and service – spending will fall and most people will buy less, especially luxury items will not attract buyers.
  • increase in demand for inferior goods – replacement inferior goods become dominant.
 
In our country, the cost of basic services is becoming too high and people can barely afford basic services subsequent to the growing unemployment rate, services providers are exerting pressure on society without improving the quality standard of the services they provide. This will drive inflation even more. National savings is also dropping, while debt is growing.
 
In Conclusion, we must consider open dialogue between the government and the private sector to reverse the situation by implementing required structural or policy changes.
 
There might be serious trade-offs to make valuable adjustments that will balance the formula for keeping people employed in primary, secondary and tertiary sectors of the economy.
 
Sacrifices or trade-offs must safeguard employment by responding to globalization, downgrades, FDI, manufacturing value addition, services imports and exports, high import rates, employment market assessment, skills upgrade, vocational changes and improvement in training in specialised skills.
God bless
 
Rodney Dan-Ao !Hoaeb is a Trade and Investment Researcher Committed to seeing a radical economic shake-up in Namibia.



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