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The job creation as the challenge

Job creation is where a person creates his/her opportunities in his/her creative ability and creates job opportunities according to his/her wants in future. The job creation as the challenge can be tackled as follows.

The e-commerce companies should announce that its creations of like two million jobs within one year. Where it can be the astounding announcement and woke people up to the potential of this sector for job creation. Companies can say 60 per cent of these jobs would come from the logistics and warehousing sector, and mostly from their home place. E-commerce has the potential to connect thousands of small and medium industries which become sellers via the marketplace to its large consumer base. Companies claimed that they had many people who registered users who were potential buyers. As one of Rwanda’s homegrown and preeminent Internet companies, company’s statement about job creation needs serious attention. Of course, this column is not about the company per se but about identifying the future of job creation in Rwanda. (As an aside, it must be noted that since late last year, the e-commerce juggernaut seems to be slowing down. Companies have announced layoffs, sales slowed down, and company valuations were marked down. Perhaps this is a sign of early euphoria giving way to realism).

Can ecommerce be a major job-creating engine? As Rwanda struggles to create at least 12 million jobs annually, this question is very pertinent. To the extent that ecommerce does require logistics (including last mile delivery) and warehousing, all of which can be labour intensive, the jobs promise is credible. But these are not high quality jobs. If e-commerce can also create entrepreneurs who produce everything from garments, home furnishings and office equipment, which are then sold via the Internet, then the jobs promise is more credible. However, the bigger promise may be in B2B (business to business) e-commerce, which is at a very nascent stage in Rwanda. Even in the B2C (business to business) space, the merchandise currently is crowded with mobile phones and electronics, much of which is simply imported from abroad. So a booming e-commerce business may be supporting entrepreneurs and low-cost producers abroad, not in Rwanda! Hopefully, this is only a transitory phase.

Are there sectors that will provide large-scale and well-paying jobs on a sustainable basis? So this sector too creates more than a million jobs every year for new workers. We do not have a systematic way of tracking employment data. More than 90 per cent of the labour force is working in the informal and unregistered sector, with no employer-provided pension or other benefits. Their jobs are much less secure, and churn is significant. The Labour Bureau tracks eight employment-intensive industries – textiles, leather, metals, gems and jewelry, transport, IT/BPO and power loom/handloom. Through quarterly sample surveys of firms in these sectors, we get a representative glimpse of the jobs situation in the country.

The data is very discouraging. These sectors used to add atleast more than a million jobs every year, till six years ago. That annual rate declined by half, and then further. In previous years, these sectors added merely 1.35 laky jobs, and in 2016 there has been a net decline. The reasons could be numerous. But one proximate reason is decline in Rwanda’s exports. For the past months in a row, exports have been shrinking by an annual rate of about 15 per cent. This is unprecedented, and our export strategy needs an urgent correction. Manufacturing output and employment growth in Rwanda is impossible without commensurate growth of exports too. Even during a global slowdown, most East African countries continue to show positive growth unlike Rwanda. The jobs challenge is global, and is especially acute for the youth. Many African countries have youth unemployment of more than 10 per cent.

The World Bank reports that 1.8 billion young people are jobless and also not studying or in any form of training. Even economies which are growing show signs of “jobless growth.” The advent of automation, 3-D printing, robotics (and of course, driverless cars!) is not making it any easier to tackle the challenge of job creation. In the near future, in Rwanda, it is clear that job creation will be linked to the rebound of the investment cycle. Since the private sector is already burdened with high debt and spare capacity, it is unlikely to lead the resurgence in investment. Hence the lead will be from public investments like those in highway construction, railways and ports, airports and urban infrastructure. All of these do create jobs, as also lead to demand for materials like steel and cement, leading further to revival of those ancillary industries and second round effects. Rwanda also has to tap into the emerging opportunity of job migration out of other countries, due to labour shortages and rising costs. In the services sector, tourism is a labour intensive sector with high potential. This can also be a significant foreign exchange earner. For instance, more people from outside countries come to Rwanda. That is even when we are right next door, a short flight away. Surely, we can attract at least one laky European or American tourists annually. Rwanda can also be a global hub for higher education. We spend more money in sending our kids to colleges overseas.

If similar facilities come up in Rwanda, it will save foreign exchange and create jobs here. Healthcare too is a sector with a large potential. The challenge of employment creation should be restated in terms of livelihoods and incomes. As most entrepreneurs usually say that, if you can’t find a job, create one. It is better to be an employer rather than an employee. Livelihoods can come from entrepreneurship, not just jobs. That calls for focus on ease of doing business and reforms. All economic policy discourse should firstly be answerable to the question of job and livelihood creation.

In conclusion, I may say we should also promote the jobs that can hinder in their development as entrepreneurs also think creatively and innovatively to the job creation in the country.

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