Creating Productive Jobs for Africa's Youth: A Huge Challenge with Global Implications by Birger Fredriksen
By Birger Fredriksen, Results for Development.
In an article in the Financial Times (“Africa’s youth, frustrated and jobless, demand attention”, April 13), Mo Ibrahim – chair of the Mo Ibrahim Foundation focusing on leadership and governance in Africa – rightly called for more attention to the rising unemployment among young Africans. The article discussed several factors that risk “turning sour” Africa’s “demographic dividend” including “…the worrying mismatch between the skills our young people are taught and those needed by the contemporary job market”.
Clearly, education must do a much better job in preparing young people for work. But, as I noted in a letter to the FT editor (April 19), current efforts to address skills mismatch are largely limited to the tiny modern sector of the economy. To make a real difference in sub-Saharan Africa (SSA), such efforts must also address skill needs in the informal sector where most people work. This blog expands on this theme.
- The magnitude of the youth employment challenge is much greater in SSA than in other regions. This is largely due to the juxtaposition of two increasingly SSA-specific conditions: Continued rapid population growth and very slow modern sector job creation. Between 2015 and 2030, the age-group 15-24 years is projected to grow by 48% in SSA as compared to 4% in South Asia, and to decline by 4% in Latin America and 9% in East Asia. In addition, urbanization is still low in SSA but accelerating (from 40% in 2015 to 47% by 2030). This further adds to the increasing demand for employment in urban areas.
Those who will enter the labor force up to 2030 are already born. Thus, the only way to affect supply is to improve peoples’ employability. And the informal sector will remain the main employer, including for most secondary and higher education graduates. Therefore, efforts to generate employment must give much more attention to investing in that sector, including in training relevant to informal sector jobs. This will help improve young peoples’ ability to find jobs/create their own jobs, increase their productivity, and facilitate their access to more productive jobs higher up the value chain.
As regards labor demand, the transformation of SSA dual economies is in its infancy; 80-90% of the labor force is still engaged in the informal farm and household enterprise sector. Even in middle-income Nigeria, in 2011, 86.5% of those employed were in the informal farm (57.6%) and non-farm sector (28.9%). As much as 33% of the labor force had never attended school, reaching 45% in agriculture. On average for SSA, the manufacturing sector’s share of employment has remained around 6% the last three decades.
- The challenge is multi-sectoral; there is no quick “education alone” fix. This said, radical improvements in education survival, quality, relevance, and coverage are essential. On average, only about 60% of those starting primary education complete the cycle (unchanged since the 1970s) and, of those who complete, a low share acquires basic literacy and numeracy (only 40% on average for the 10 Francophone countries covered in the 2014 PASEC survey). Adding that one in five children of school age is out of school, together this represents a massive failure in basic skills development, especially in rural areas.
As regards relevance and coverage, SSA’s high youth unemployment largely reflects the failure to generate jobs. This said, “skills mismatch” is a serious problem. Countries are addressing this mostly by making technical and vocational education and training as well as tertiary education more responsive to modern sector jobs. However, the most serious “skills mismatch” results from training policies that mostly neglect skills needs in the informal sector. As a result, while most secondary and higher education graduates end up in jobs for which they are “overeducated”, as illustrated by the figures quoted above for Nigeria, a high share of the agricultural labor force is illiterate. And, while SSA obviously must develop the post-basic education skills needed to support national development, the labor market for, especially, tertiary level skills is very narrow. For example, a recent study for Ghana found that less than 2% of the about 250,000 tertiary graduates joining the labor market annually found modern sector jobs (Ansu, 2013).
This broader “skills mismatch” challenge calls for major skills upgrading in the informal sector. Given the low level of basic human capital, especially in the rural sector, this is a massive and complex task. Public sector training providers often serve poorly the particular needs and conditions in this sector. Further, in addition to basic literacy, numeracy and technical skills, to strengthen young peoples’ ability to become entrepreneurs and innovators, they must also acquire basic “21st century” life and career skills.
- Developing agriculture holds the key to unlocking many of SSA’s development challenges including generating jobs. Several recent reports call for addressing the general neglect of this sector since the early 1990s. For example, the 2014 Report of the Africa Progress Panel, led by Kofi Annan, calls on governments (p. 83) “…to take off the handbrake that has been holding back agricultural growth. That means investing in infrastructure, removing barriers to regional trade, and applying the lessons of science to embrace a uniquely African Green Revolution”. Similarly, the 2014 “African Transformation Report” from the Ghana-based “African Center for Economic Transformation” emphasizes the key role increased agriculture productivity plays in the industrialization process. But, again, to rise productivity will require massive investments, including in skills development at all levels, from enhancing the basic skills of subsistent farmers to agricultural research capacity.
In addition to generating employment, enhanced agricultural productivity is also a precondition for achieving other key development objectives, such as improved agricultural yields, rural incomes, and food security. The 2016 Global Education Monitoring Report notes that (pp. 45-46) in China “…agricultural growth is estimated to have been three times more effective in reducing poverty between 1980 and 2011 compared to growth in other sectors of the economy. Similar magnitudes are found in studies examining other developing regions” including 3-4 times in some SSA countries.
- Education must improve its ability to enhance young people’s employability. This issue figured prominently at ADEA’s (Association for the Development of Education in Africa) recent flagship education and training conference (March 15-17, 2017, Dakar, Senegal). Perhaps more strongly than at any previous such conference, African ministers of education and other high-level officials called for reforms to align education programs better to national economic, social and cultural realities. This is important. Countries must reset education priorities to better serve the large population groups and economic sectors that benefit little from education spending (including aid). To develop the basic skills of people who have not even benefitted from primary education – and who eke out a meager living in insecure, low productivity jobs in the informal sector – is a basic development stage that SSA countries cannot “leapfrog”.
Birger Fredriksen is a senior fellow at Results for Development and a leading expert on the development of education in developing countries
Other references
Ansu, Y. (2013) “Skills development for economic transformation” in The Africa Transformation Report, ACET. Accra.
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