JOBLESS FUTURES OP-ED
Youth unemployment is Africa’s biggest crisis and puts the continent at risk of becoming home to centres of chaos
Nearly two-thirds of this African youth cohort is already unemployed. It is a crisis that causes millions to enter a life of poverty and hopelessness.
A recent BBC documentary on the rampant use of a relatively expensive illegal drug, kush, in Sierra Leone is frightening. The addiction to kush has disrupted the lives of many young people. Tindem is one of many Sierra Leoneans who rummage through raw sewage in the streets with the hopes of finding something valuable to sell and survive — and buy kush. “I smoke kush to ease my stress,” he says. “If I had a good job, I could save money to take care of my family.”
While one may question the validity of this assertion, the truth remains, the plight of Sierra Leone’s young is dire. The BBC narrator closes out with “drugs have, for many here, been an escape from the trauma of poverty and other disasters. The unrelenting march of kush threatens to consume our young people with no pity. … They and the youth of this country deserve better.”
And that they do. The lack of jobs and underemployment where jobs exist are significant concerns in places beyond Sierra Leone — the Democratic Republic of Congo, Nigeria, Ghana, and across the continent. Fourteen per cent of the world’s population lives in sub-Saharan Africa. Yet, the total combined annual economic output of sub-Saharan Africa as measured by the World Bank World Development Indicators is just $1.8-trillion — roughly the same as Italy, which has just 60 million inhabitants.
Nigeria, South Africa and Kenya make up more than half the region’s official economic output, leaving a population of some 825 million people across 45 countries with a combined GDP under $900-billion. In these countries, less than half of this population are in the labour force, and a majority are under 25 years. One-fifth of the global population under 25 now resides in sub-Saharan Africa (SSA), making it the youngest continent globally. Africa’s youthful population could be an incredible asset for development and offer a comparative advantage in global markets with the proper education and training.
The contrary is also true. Where there is not adequate education, jobs or training to take advantage of the opportunities for innovation and creativity, African countries risk becoming centres of chaos. By 2050, the continent’s young population is expected to exceed half of its total population.
What does that mean if nearly two-thirds of this African cohort is already unemployed? It is a crisis that causes millions to enter a life of poverty and hopelessness.
The African unemployment challenge is complex: an inadequate demand for unskilled workers occurs concurrently with an insufficient supply of skilled workers.
The International Monetary Fund (IMF) has estimated that to maximise the continent’s booming population growth, an average of 18 million high-productivity jobs per year will be needed until 2035. The surge in young people will necessitate a rapid, possibly unprecedented, rate of job creation. Yet, as Mona Iddrisu, Head of Youth Employment and Skills at the African Centre for Economic Transformation (Acet), describes, we are not doing enough. “We’re not creating enough jobs. We’re not even close; we need to increase the job creation by a staggering 90% to be able to absorb our youth growth rate.”
Iddrisu adds that “we have supply-side factors such as skills deficits in young people, so we have young people coming out of education, without the necessary skills. In a recent study, we found that about 20% of secondary school graduates are coming out without the necessary skills in ICT in foundational literacy and numeracy. And there are more soft skills like communications skills, problem-solving and the rest. And so we have the supplies side issue where education systems in Africa are not adequately preparing young people for current jobs and future jobs,” she says. “So that becomes an issue.”
And unemployment has been gradually rising because neither the rate nor composition of economic growth has been favourable for absorbing new entrants into the labour market, let alone lowering the reserves.
Ghana, for instance, epitomises the challenge — and the opportunity. Except for 2014 to 2016, when real GDP growth was about 5%, Ghana’s growth performance has been quite strong. Growth in 2017 was 8.1%, 6.3% in 2018, and 7% is expected in 2019, far above the 3.5% average for sub-Saharan Africa, placing it among the world’s fastest-growing economies.
The growth of Africa’s independence-pioneering legend, Ghana, has been fuelled mainly by its oil output, although in recent years, non-oil growth has accelerated, expanding faster than the country’s total growth in 2016 and 2018 — a positive indicator among others. Despite the Ghanaian economy’s recent substantial success (in theory), employment patterns have failed to budge, not by much at least.
With an estimated employment elasticity of 0.47, meaning that for every 1% increase in yearly economic growth, there is a 0.47% increase in total employment, Ghana’s employment growth has lagged behind its economic development. This has prompted worries about the quality of its growth and points to Ghana’s track record, like that of many African countries, of amplifying soothing rhetoric and a repeated failure to fix where it hurts the most.
Over the years, Ghana has begun to implement several policy initiatives to enhance its young population’s skill development and human capital base, not in the least the much-acclaimed Free Senior High School programme. Similarly, while the government spends millions of dollars on “entrepreneurship” and “employment schemes”, technical and vocational education (Tvet) — which many case studies indicate is instrumental for skilling youth for the kinds of jobs needed — continues to be neglected, receiving less than 2% of the entire education budget for decades.
Thus, the question must be asked about what is performative and what is not. If countries perform job creation without fixing the real underlying factors and structures that lead to it, they will continue to experience a “jobless growth” — a scenario that will not produce social, economic and politically desirable outcomes.
African politicians consistently lament the persistent youth (un)employment statistic when elections roll around, yet do little to move the needle. The bottom line is that work follows business, and businesses prefer to follow governments interested in supplying what it requires.
In his recent State of the Nation Address, President Cyril Ramaphosa acknowledges this all-too-important connection:
“We have been taking extraordinary measures to enable businesses to grow and create jobs alongside expanded public employment and social protection.
“We all know that government does not create jobs. Business creates jobs.
“Around 80% of all the people employed in South Africa are employed in the private sector.
“The key task of government is to create the conditions that will enable the private sector — both big and small — to emerge, to grow, to access new markets, to create new products, and to hire more employees.”
It stated the obvious and perhaps was a belated attempt to steer the country onto the right economic road. Nevertheless, it is an acknowledgement that is overdue. The reality of creating an environment in which jobs can emerge cannot be understated.
Africa’s leaders ought to do a better job acknowledging the importance of inadequate economic strategy and labour market policy decisions that have led to these outcomes. This includes addressing the persistent corruption, nepotism, populist redistribution and internal patronage politics, and the subsequent implications in low investment returns; high transaction and frictional costs; political instability; and skills and capital flight, among others — all manifestations of the economic rot.
African countries need a job strategy to get more of their unskilled and inexperienced workers into employment. They should, practically speaking, make it easier for businesses to enter, stay, and compete in labour-intensive manufacturing and service sectors. The months and years some companies face to get permits, licences and approvals to operate is far from sensible. And on the other hand, it also necessitates securing a supply of highly skilled people and enticing more skilled immigrants to increase the economy’s competitiveness.
Will that solve all problems? Not entirely. But it is a step in the right direction.
As a recent CDE study reminds us, expanding employment as a strategic imperative will be beneficial today. Labour costs in China are on the rise, and the shock of supply chain disintegration from the lockdowns at the onset of Covid-19 make for compelling cases. Companies are thus on the lookout for new bases closer to home and target markets. There is no bigger market than the march to integrate the African continent under the African Continental Free Trade Area (AfCFTA). However, significant adjustments are required at the country and continental level if we take advantage of the opportunity.
Rapid employment growth is a necessary condition and direct path to improving its citizens’ social, economic, and political status and the country’s development. Increased and steady growth in employment is intimately linked to economic growth. As the economy expands, jobs are created, and contrarywise.
Old habits die hard. African governments choosing to make things simpler for business ought to be encouraged as this is a critical next step in Africa’s ongoing emancipation from outmoded ways of operating the economy and providing the employment the region so desperately needs, among other things.
Like Tindem, Africa’s working population, especially its youth, deserve more of a fighting chance to create a life for themselves and their families — and less kush. DM
Marie-Noelle Nwokolo is with the Brenthurst Foundation. She is the host of a refreshing podcast that shares insights from practitioners, researchers and policymakers on relevant gains, challenges and concerns on and about Africa. Check out the recent episode with Mona Iddrisu here.
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