The World Bank has reiterated that unemployment remains one of Malawi’s pressing concerns and a setback to sustainable economic growth strides.
Unemployment rate remains high in the country albeit the government’s effort to narrow it and setting ambitious target of creating a million jobs by June 2021—an aspiration which is, however, yet to be attained.
But the Britton Woods institution says creating more and better jobs for Malawians requires the infrastructure, enabling environment and good governance to foster economic transformation.
The bank said this in its latest Country Private Sector Diagnostics (CPSD) report for Malawi titled The Road to Recovery: Turning Crisis into Economic Opportunity.
The sentiments also come as the Covid pandemic has wreaked havoc on the job market in the country, with figures contained in the report showing that an estimated 12 percent of the employed population lost jobs in Malawi through August 2020, with those in services and industries in urban areas being heavily affected.
“The new administration has put job creation at the centre of its development agenda. Continuing a campaign promise, the president has pledged to create one million new jobs by June 2021.
“This is an ambitious target, and one that will be difficult to meet— especially considering the effect the pandemic has had on external market conditions and the government’s fiscal space,” says the bank.
It says the country already faces the challenge of being landlocked, with underdeveloped infrastructure to connect to regional and global markets, and a relatively small and poor domestic market.
It says economic activity is split between its two commercial hubs—the cities of Lilongwe and Blantyre— and with one of the least urbanised societies in the region, the country lacks the agglomeration effects that typically attract private investment.
“Yet there is significant private investment potential in Malawi, with a few lead firms already actively transforming key areas of the economy,” reads part of the report.
It says nearly 9 out of 10 jobs are informal, with three-quarters of Malawi’s firms consisting of only the proprietor, and only 3.6 percent of all nonfarm enterprises having four employees or more.
The World Bank says, now more than ever, Malawi needs new drivers of growth to jumpstart an economic recovery and help meet the jobs challenge of a rapidly growing, youthful population.
But Employers Consultative Association of Malawi Executive Director George Khaki said in an interview yesterday that the country has registered some headway towards creating an enabling environment for job creation, including enhanced infrastructure development.
“The enabling environment is rather uncertain and very fluid. We are trying to find our feet after the devastating impacts of the Covid pandemic,” Khaki said.
He said while the opening up of global economies and the Covid vaccines rollout offer stepping stones to come back to pre-pandemic levels, further recovery is being threatened volatility of key fundamentals.