Tackling Africa’s Employment Crisis in the Face of Jobless Growth

African countries often rank among the world’s fastest-growing economies, with the African Development Bank (AfDB) projecting that by 2024, Africa will comprise eleven of the twenty fastest-growing economies globally. Nevertheless, the stark reality is that despite this impressive growth, job creation remains a major hurdle. Each year, millions of young people enter the job market, yet securing opportunities that meet their needs and provide a decent standard of living is exceedingly challenging.

The International Labour Organization warns of a looming “youthquake” in Africa unless the continent rapidly creates new job opportunities, suggesting that sub-Saharan Africa will require around 72.6 million new jobs by 2050 for its youth. The pressing question is: which policies can deliver a sustainable solution?

Mavis Owusu-Gyamfi, the president and CEO of the African Centre for Economic Transformation, argues that economic transformation is vital for generating the jobs Africa desperately needs. She highlights that transformation involves diversifying economies through value addition, improving export competitiveness, and boosting productivity levels. “While growth is crucial, it is insufficient. We are experiencing growth but failing to transform in a manner that creates employment,” she explains. She warns that countries that overlook transformation are more vulnerable to economic shocks, noting, “Our research indicates that during the last financial crisis, African nations with less transformed economies faced quicker declines and slower recoveries.”

“The only way to achieve transformation is by enhancing the value of what we produce. This will diversify our economies and strengthen our export competitiveness,” she adds.

Skills Gap

However, Owusu-Gyamfi contends that achieving transformation hinges on investing in initiatives designed to boost labor productivity. She points out a substantial gap between the skills provided by the education system and those required by the job market as a key factor contributing to Africa’s persistently low productivity. This mismatch results in reduced productivity as workers are not sufficiently prepared for the demands of modern industries.

“When you hire someone, instead of the average three months to acclimate them to your company’s processes, you often spend two years retraining them because they fall short of the required standards. It’s an expensive endeavor,” she remarks.

Anthony Simpasa, director of macroeconomic policy, forecasting, and research at the African Development Bank, notes that a recent analysis of South Africa’s mining sector revealed that companies invest nearly $2,000 per employee annually on retraining.

“While mining may absorb this cost, how many businesses in other sectors can sustain that? It’s simply not feasible. The financial burden of retraining can be substantial and impact profitability,” he adds.

Simpasa stresses that policymakers must seek innovative approaches to enhance foundational sectors such as education to avert the costs of retraining in the future.

“As we move toward a knowledge economy, technology is becoming increasingly important, making a focus on STEM fields essential.”

Scaling the Informal Sector

Raymond Gilpin, chief economist and head of the strategy, analysis, and research team at UNDP’s regional bureau for Africa, believes that tackling jobless growth and skills shortages must include the informal sector. “Though often criticized as ‘informal’, this sector is the backbone of the economy. It funds school and university tuition and covers rent,” he explains. “We must find innovative ways to assist those in the informal sector so they can grow and consolidate. Currently, they encounter numerous challenges concerning taxation, regulations, and logistics.”

According to him, policymakers need to shift from a public sector-driven approach to prioritizing the support of small businesses and the private sector to create more job opportunities. “That’s where employment will stem from. We must acknowledge that the future does not lie in ongoing government funding and public sector job creation—those days are over. A shift in perspective is essential.”

  • Related Posts

    Assistance and Market Opportunities for Growing Township Businesses

    Johannesburg – A duo of emerging black-owned enterprises has received support to enhance their presence within the local township economy, thanks to an initiative by Tiger Brands designed for business…

    Continue reading
    They Treated Us Like Beasts!

    Mzansi artist Mawhoo has voiced her anger following a distressing experience at Life Fourways Private Hospital. The singer, renowned for her hit “Gucci,” took to social media to share claims…

    Continue reading

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    Assistance and Market Opportunities for Growing Township Businesses

    Assistance and Market Opportunities for Growing Township Businesses

    They Treated Us Like Beasts!

    They Treated Us Like Beasts!

    AVAX Price Drops, QUBIC Stays Steady, and BitLemons Shines as a New Contender in GambleFi

    AVAX Price Drops, QUBIC Stays Steady, and BitLemons Shines as a New Contender in GambleFi

    Gauteng Derbies Shine in Vodacom URC Spotlight

    Gauteng Derbies Shine in Vodacom URC Spotlight

    Trump and Putin Align on Ukraine Negotiations Amid Shift in US Policy

    Trump and Putin Align on Ukraine Negotiations Amid Shift in US Policy

    National Epilepsy Week: Raising Awareness About a Global Condition Impacting Millions

    National Epilepsy Week: Raising Awareness About a Global Condition Impacting Millions