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Malawi’s agro-based economy poses job creation challenges

The fact that Malawi has refused to shift from subsistence to market oriented agriculture has seen the country failing to generate enough formal jobs to go round.

This has seen most Malawian youths either unemployed or in low quality informal jobs, with only 3.6 percent of the country’s youths in formal employment, according to the International Labour Organisation.

ILO says countries in Sub-Saharan Africa, including Malawi, face an urgent need to create quality jobs that guarantee the necessary income and material independence for workers and their families considering that close to 10 million young people enter the labour market each year.

“The low quality of jobs does not allow either the youth or the countries they are living in to fully tap into the region’s true economic potential,” says ILO in the report.

Employers Consultative Association of Malawi (Ecam) Executive Director, Beyani Munthali says that as long as the majority of the population continues to earn their income from agriculture, Malawi will continue to be faced with major challenges to formalise the informal economy.

According to Munthali, even though labour bodies such as Employers Consultative Association of Malawi (Ecam) and Malawi Congress of Trade Unions act as vehicles in implementing the Decent Work Country Programme which captures the formal economy, it still remains a challenge to get enterprises to join these two associations as many of them cannot afford to pay the subscription rates and, in turn, the organisations fail to extend their services to the informal sector.

“Another challenge is the fact that since there is huge informality, adherence to laws and regulations is minimal. Adherence to the laws is one way through which decent jobs can be attained or provided. So, what happens is that both the employer and the employee in the informal sector, not being aware of the law, feels they are not obliged to know or implement provisions of the law. For example, not many enterprises and employees are aware of Occupational and Safety issues which are also part of Decent Work,” he said.

According to Munthali, as much as it is a well-known fact that job rich growth drives economic growth, Malawi’s labour bodies are failing to carry out their duties effectively due to financial constraints.

“The effectiveness of ECAM and Malawi Congress of Trade Unions (MCTU) has been a major challenge due to financial and institutional constraints. Both institutions have constitutions but their only source of income is through members’ subscriptions. This poses a challenge because due to the high administrative costs, their presence is not in all parts of the country and they are limited to employing enough personnel to pursue the decent work agenda.”

He said the same applies to the Ministry of Labour which remains under-funded.

“As the Ministry responsible for man power it surely needs to be funded accordingly and not be deemed as just another ministry contributing to employment in the public sector. The Malawi Decent Work Country Programme provieds for capacity of social partners to be developed under priority three. I hope that government will allocate resources accordingly for programmes and initiatives to be advanced under that country priority,” said Munthali.

ILO presents a number of other policies to translate growth into decent work creation, such as:

Supporting returns to self-employment as well as switching from the informal to the formal economy through stronger incentives. The labour body also cites reinforcing the implementation and relevance of labour market regulations to increase workers’ protection without reducing job creation by private employers.

“Expanding social protection coverage to improve the income security of workers and their families. Improving access to and the quality of education and training, while making sure that employers are involved in order to reduce skills’ mismatches and shortages. Strengthening labour market policies that address both long-term structural problems and mitigate the impact of economic and natural shocks through both targeted measures,” ILO says.

But, according to Munthali, in addition to these policies, there is also need to strengthen the capacity of social partners to improve service delivery by increasing access to the services of social partners through membership of the informal economy.

He commended efforts the country is doing to develop the National and Employment Labour Policy which he said will be a resourceful tool for the players in the labour market.

“Before this, there was no guidance on where to seek information regarding the skills available in the labour market and which jobs and in which sector were available, but now through the Labour Market Information System such info will be available. What this does is tell the education sector what skills are needed in the formal economy in order to graduate the informal economy to the formal, the sort of skills needed for self employment etc.

He added: “We signed the Decent Work Country Programme in 2012, I think we have to critically asses our performance as a country and furthermore establish how far we have gone in creating a conducive environment for diversification in the agricultural sector which employs the majority of Malawians.”

Although African countries have experienced incredible economic growth over the past several years, the ILO says the quantity and quality of jobs for the youth remains a huge challenge.

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