Will emerging Africa employ its youth?

May 08, 2014
Arjan de Haan and Flaubert Mbiekop
Africa is the world’s youngest continent.

Close to 70 percent of its population is aged below 25, and Africa’s youth constitutes about 37 percent of Africa’s labour force, with numbers of young people searching for work are expanding more rapidly than anywhere else in the world.

How Africa handles its youth bulge will determine whether this is to become an important economic opportunity, or a terrible curse for decades to come.
And it’s on the African Union’s agenda as its policymakers meet this week in Windhoek, Namibia, to review the commitments African governments made in 2004 to promote employment for the continent’s growing population. The meeting’s outcomes will inform the special summit of the AU’s Heads of States, in September 2014.
Policymakers and researchers met in Senegal at the Putting Youth to Work in sub-Saharan Africa conference in January, to discuss the challenges and opportunities that Africa’s burgeoning population presents to its economy in the light of the looming jobs crisis. This underlined the urgent need of stronger and more concerted efforts to capitalize on the potential of a whole generation of youth in desperate need of opportunities.
Failing to meet the youth’s aspirations not only risks undermining societal stability, but also curtails prospects for sustained economic growth.
“If we don’t take care of the youth, they will ‘take care’ of us”, Senegal’s Minister of Youth and Employment stressed at the end of the conference.

The scale of the African youth employment challenge is clear. According to a McKinsey report, almost 12 million young Africans enter the labour force every year, but only 5 million jobs are created despite impressive rates of growth, resulting in growing unemployment and expanding informal sector.

A recent World Bank report comes to even more pessimistic projections, as its estimates show that the growth in jobs in the non-agricultural sector is still very low. Data presented by Ismael Fofana at the Dakar conference showed that Senegal’s current economic growth provides jobs only for slightly over half of the new entrants.

The constraints for young women are even larger than for young men. They tend to have less access to assets in agricultural production, and in the transition to urban employment family responsibilities and social norms may additionally constrain their potential and access to opportunities. In Rwanda, research led by Ibrahim Kasirye showed that women are less likely to find paid employment than men.  And as opportunities increased in 2005, so did the wage gap between men and women.

Geographically too, the jobs challenge is not evenly divided. Richer countries on the continent, particular South Africa and Nigeria, for example, have very high unemployment rates. Countries with relatively high rates of GDP growth, often those that are benefiting from the commodity boom, have created relatively few jobs.

Policymakers are very much aware of the challenge and understand that unemployment breeds unrest - youth that join rebel movements or criminal gangs often cite unemployment as a reason. The Government of Côte d’Ivoire, for example, highlighted at the conference’s Ministerial panel that it needs to create 200,000 jobs in 2015 alone.

While the spectre of youth unemployment is apparent, solutions are far from clear. As highlighted in a special panel at the conference, African governments lack detailed information and data, employment statistics are poor, and official definitions lead to under-estimating the severity of the employment challenge.

At the same time, while the lack of wage-paying jobs is the primary issue, it is also increasingly evident that many countries’ education systems – despite tremendous progress in the last two decades – are not preparing their youth for Africa’s rise on the world stage.

So where are the jobs going to come from?

In many countries, the fastest-growing sectors those depending on natural resources have not generated enough jobs. Africa’s growth potential in manufacturing and a modern service sector has remained unexploited. Serious bottlenecks, including in infrastructure, continue to hamper the potential.

Professor Aly Mbaye, Cheikh Anta Diop University, Dakar, for example, highlighted Africa’s high energy and unit cost of production; this makes it unlikely African countries will be able to replicate China’s economic miracle.
Most jobs are now, and in the foreseeable future, going to remain in agriculture and the so-called informal sector. But even that job generation potential will not materialise by itself. Policies need to promote the potential of agriculture, and indeed make this attractive for young people. This can be done through developing and promoting agriculture as a commercial opportunity, by adding value through processing and better distribution of produce, and by promoting the organisation of farmers, among other strategies. New approaches, such as youth organized around agricultural commodity value chains in Nigeria, and Uganda’s Youth Venture Capital Fund, are being explored, and their efficiency evaluated.
The informal sector cannot be left to itself either, and support is needed for the numerous small enterprises that employ most of the labour force outside agriculture, to enhance social protection, productivity, access to credit, and security.
Silver bullets do not exist, however, and specific approaches for local contexts are required. Credit schemes have become popular, but need to be accompanied by training and other measures.  As described by Rosemary Atieno and Winnie V. Mitullah at the conference, Kenya’s Youth Enterprise Development Fund seeks to enhance youth participation in socio-economic development through the provision of credit to youth enterprises.  South Africa's Community Work Programme, which provides two days of guaranteed work per week on projects that are identified as a priority by communities, has created self-reinforcing learning processes that involve youth and older generations in delivering services, growing food, and raising livestock.
But these efforts are still small compared to the size of the challenge of employing Africa’s youth, and simple measures – like providing finance for start-ups or tax incentives – may not have the desired effects.  
As Gemma Ahaibwa of Uganda’s Economic Policy Research Centre highlighted, more concerted efforts by governments, the private sector, international organisations, and researchers are needed to start addressing the growing problem of a generation that is not finding the opportunities that match its potential.

Arjan de Haan is the program leader for IDRC’s Supporting Inclusive Growth (SIG) program and Flaubert Mbiekop Ouahouo is a senior program officer with SIG.