Strengthening and stabilising the country’s subsistence farming and introducing controlled farming methods that are not reliant on seasonal rainfall patterns can go a long way toward mitigating job losses due to persistent drought.
In addition, identifying bottlenecks in the services sector could unlock the full potential of job creation in this critical component of the economy.
Economic advisor to President Hage Geingob, Dr John Steytler, said this in reaction to the latest figures by the Namibia Statistics Agency (NSA) indicating that broad unemployment increased by 6.1 percent to 34 percent.
The NSA’s Labour Force Survey, which it released late last week, states that the main reason for the sharp increase in unemployment is the prolonged drought that has affected the agricultural sector throughout the length and breadth of the country since 2015.
The Labour Force Survey results once again demonstrate the importance of the agricultural sector in the economy and in the livelihoods of people.
The sector is not the number one contributor to the GDP of the country, but is the sector that employs the largest number of workers.
In 2014 about 207 000 people, or 29 percent of all employed people were from the agricultural sector. In 2016 this figure declined sharply to 136 000 people or only 20 percent of the national workforce.
“It shows that if we would like to make a dent in the unemployment rate then we have to pay more attention to this sector. The immediate cause for the sharp decline over the two years was of course the severe drought that we experienced in 2015 and 2016, which affected in particular the rain-fed communal agriculture.
“President Geingob’s call to implement controlled agriculture should therefore be embraced by all,” Steytler said.
The survey indicated that other services such as accommodation and food services, financial services, information and communications services, professional services and even arts and entertainment all recorded positive job growth.
“Similarly to manufacturing, our services sector could therefore play a bigger role in local job creation,” Steytler commented.
The latest Labour Force Survey also notes that the other sector that contributed to the shedding of jobs was the wholesale and retail trade where employment dropped from 97 000 employees, or 13.7 percent of the workforce, to 65 000 employees or 9.7 percent of all workers.
Steytler pointed out that this reduction could be attributed to the slowdown in economic activity that was in part affected by contractionary fiscal and monetary policies. He emphasised that were it not for the severe drought unemployment would not have increased.
Furthermore, if the wholesale and retail sector had not shed jobs then unemployment would actually have decreased.
Meanwhile, the transport and storage sector also experienced a decline in its employees from 27 000 workers, or 3.7 percent of the workforce, to 22 000 or 3.3 percent.
“The slowdown in this sector can be directly attributed to the global slowdown, which affected activity at our national port. As the global economy recovers, this situation should be reversed.
“However, given the fact that one of our national goals is to become a logistics hub for the region, more needs to be done to stimulate this important sector, in particularly our ageing railway system,” Steytler said. He was however, pleased with the good progress made with the port expansion and road upgrades.
“To be able to benefit from an anticipated global economic recovery and the concomitant movement of goods, in particular minerals, it is essential that the ageing railway be upgraded in line with the Harambee targets,” Steytler remarked.
The latest Labour Force Survey shows that employment in other economic sectors remained more or less unchanged.
“However, to reduce unemployment to single digit level, one would like more economic contribution from all sectors,” Steytler said, and noted that although the employment share from manufacturing had increased from 25 000 to 44 000 employees, or from 4.1 percent to 6.6 percent, it remained one of the sectors with untapped potential.
“Here the Growth at Home strategy that advocates more beneficiation of our raw materials, including minerals, fish and agriculture, should be supported by all. Moreover, as was documented in the 2016 Labour Force Survey, manufacturing jobs also attract higher wages and tend to be more stable,” Steytler added.