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Study pegs formal employment at 11%

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The latest Financial Literacy and Capability Survey, commissioned by the Reserve Bank of Malawi (RBM), has pegged Malawi’s formal employment at 11 percent.

The study commissioned under the Financial Sector Assistance Project, and conducted by A2F Consulting Group, has pegged informal employment at six percent.

The survey results come at a time initiatives by the current administration to fuel job creation, such as technical colleges, are yet to register tangible results.

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According to the survey, 72 percent of Malawians work in self-employment activities.

The survey says only 1.4 percent of respondents reported ‘looking for work’ or ‘waiting for the busy season’, indicating very little cyclical unemployment amongst survey respondents.

It further says at the time of the survey, one percent of respondents indicated that they were studying.

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“In the urban areas, almost one in five (18 percent) are employed in the formal sector compared to only 10 percent in rural areas. In rural areas five percent of respondents indicate that they are employed informally, this proportion is doubled in urban areas where 10 percent are informally employed.

“Additionally, five percent of females in Malawi are identified as housewives. This appears to be more common in the urban communities, where the proportion of housewives is six percent compared to the rural areas where it is two percent,” reads part of the survey results.

On sources of income, the study reveals that the primary source of income for all households is self-employment or working on one’s farm.

“Self-employment and farming activities are the main source of income for 69% of Malawian households. The second most common income source is short-term labor contracts or ‘ganyu’. The public and private sector then provides income for roughly 15 percent of respondents, informally and formally.

“Selling livestock and crops is the primary source of income for only 1 percent of Malawian households. Another one percent of households indicate that their primary source of income comes from family, friends, or their community. Of these households (1 percent), 87 percent receive their support from family, friends and community living in Malawi while 47 percent receive repatriated funds from people living outside of Malawi,” the survey says.

It adds that less than one percent of the population relies on the national pension fund for their primary source of income while less than a tenth of a percent indicated that they have no source of income.

In terms of households’ monthly income, the survey says about 49 percent of Malawian households make more than K25,000 or $34.5 a month.

“Less than 2 percent of households make less than K1,500 a month. The share of households steadily grows after this, with 13 percent making between K1,500-6,000, 20 percent making between K6,000- 15,000, 16 percent making between K15,000-25,000, and as mentioned above 49 percent making more than K25,000,” the survey says.

It adds that in the urban areas, about 76 percent of households earn more than K25,000 a month, while the proportion of rural households is far less at 44 percent.

President Peter Mutharika recently said government will create 17,000 jobs for the youth.

Speaking at Milonga Community Technical College in Thyolo, Mutharika said the jobs will be created through the Job for the Youth Initiative supported by the African Development Bank.

In the 2018/19 national budget, Capital Hill has allocated K10 billion towards youth internship and tree planting in a desperate attempt to keep the youth busy.

But the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) in its post budget analysis described the programmes as temporary fixtures that will not solve the predicament faced by the youth presently.

“There is need to revamp the economy and turn our focus to growth oriented sectors which will invariably create jobs for the large number of unemployed youths in the country.

“A private sector led growth is the only way that this unemployment problem can be mopped. Only then, will we see the economy moving towards the [Malawi Growth and Development Strategy] MGDS III aspirations of a productive, competitive and resilient nation,” says MCCI.

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