The youth employment challenge in Africa
One of the most defining challenges of the 21st century will be to provide productive and decent jobs to more than 40 million additional people who enter the global labour market every year. For Africa, this is a race against time.
By 2035, the number of Africans joining the working age population will exceed that of the rest of the world combined. According to the IMF “Regional Economic Outlook: Sub-Saharan Africa” (April 2015), the region will need to create about 18 million jobs per year until 2035 to absorb this growing labour force.
The stakes are high. Africa’s growth rates have outperformed the global rate over the last decade, but job creation has not kept pace. Moreover, the gap between Africa’s youth and decent work has not reduced. Nevertheless, youth employment has the potential to become Africa’s most powerful development engine.
A compelling priority
According to the ILO’s “World Employment and Social Outlook: Trends 2015”, sub-Saharan Africa has the highest labour force participation of all regions, estimated at 70.9% ‒ compared with a global average of 63.5% in 2014. Unemployment stood at 7.7% in 2014, while the youth unemployment rate in the continent was 11.8% in 2014; only East Asia and South Asia had lower rates at 10.5% and 10.0% respectively.
However, these rates only reflect the fact that the vast majority of employable active youth cannot afford not to work. The quality of jobs in Africa is of considerable concern. The vulnerable employment rate ‒ the share of own-account workers and unpaid family workers in total employment ‒ was estimated at 76.6% in 2014, significantly higher than the global average of 45.3%.
The harsh reality is that the informal economy is the only professional horizon for eight in 10 young workers in Africa. Young African women are even more likely to work informally than young men. African young people work hard, but with low productivity, pay, protection and perspectives. On average, 72% of the youth population in Africa live on less than $2 per day.
Self-employment and entrepreneurship are often the only employment options available to youths, including graduates. The highest proportion of potential youth entrepreneurs in the world is to be found in sub-Saharan Africa (60%). Unfortunately, 32% of these young individuals are necessity-driven entrepreneurs. Entrepreneurship is perceived as a survival strategy and not a business opportunity1.
New avenues will have to be opened in African youth labour markets. For instance, Africa’s food markets alone are projected to increase from $313 billion in 2010 to $1 trillion in 2030. But in order to attract and retain young people, Africa’s agriculture will need to upgrade and become more appealing. Agro-industries would have high multiplier effects in terms of youth employment creation.
From cultural and creative industries to digital opportunities and ICT start-ups, it will also be essential to leverage on the youth employment creation potential of each and every economic sector.
A bold political will
At its core, the youth employment challenge is aligned with the challenge of promoting inclusive economic growth, protecting the environment, and promoting social inclusion. Nothing short of strong collective action and partnership at the global, regional and national levels will succeed in changing the dire situation for young people in labour markets for the better.
The new 2030 Development Agenda will aim to substantially reduce the proportion of youth not in employment, education or training by 2020.
The 2015 Addis Ababa Action Agenda on Financing for Development commits to developing and operationalizing a global strategy for youth employment and implementing the ILO Global Jobs Pact, all by the year 2020.
African Heads of State and Government have reaffirmed their determination to reduce unemployment ‒ particularly that of of youth and women ‒ by at least 2% annually over the next decade.
It is therefore vital that the structural bottlenecks constraining the demand for labour be addressed, while at the same time helping young women and men to obtain the skills needed to succeed in a competitive global economy.
Indeed, Africa’s youth employment challenge is not only the creation of jobs in the formal sector, but also to usher in an increase in productivity of the almost 80% of the workforce who are in the informal economy. In this way, the underemployment and vulnerability associated with work in this sector can be confronted head-on.
There is no one-size-fits-all solution to this problem. In line with the 2012 ILO Call for Action on Youth Employment Crisis, there is a need to take a multi-pronged approach with measures to foster pro-employment growth and decent job creation through macroeconomic policies, employability, labour market policies, youth entrepreneurship and rights, while ensuring financial and fiscal sustainability.
Policy makers should give due consideration, as appropriate, to:
• Assigning the highest possible priority to youth employment in national, regional and international development frameworks;
• Reviewing the labour market policies and programmes to ensure they contribute as effectively as possible to job creation for young women and men;
• Ensuring all policies and programmes respect the rights of young workers and promote gender equality and women’s and girls’ empowerment;
• Building supportive infrastructure, including labour-intensive infrastructure;
• Promoting industrial and sectoral policies to facilitate structural transformation;
• Improving access to skills, finance, land and technology;
• Supporting youth entrepreneurship, including that of young women;
• Developing mechanisms that apply adequate protection, including social protection, for all young workers to facilitate transitions into stable employment and decent work.
An inclusive approach
Africa does not lack diagnoses and strategies, but there is also a need for integrated methodologies to implement them. The following 7Cs suggest an inclusive approach for policy and programme actions on youth employment.
It is fundamental to take a holistic view and include decent work and youth employment creation as a central objective in national development strategies. It is the role of the governments to ensure a supportive macroeconomic environment, provide sustainable and resilient infrastructure, help build human capital and improve the business environment to unleash private initiative at all levels as the private sector provides some 90% of the jobs in the world.
Any policy priority setting should also take into account the fact that the youth are not a homogenous group. Special attention should be paid to adolescent girls and young women, rural youth and youths with disabilities, as they face additional constraints that impact their possibilities to secure decent work opportunities.
Unlocking the transformative potential of young people and accelerating youth employment creation require strong policy coordination among ministries responsible for economic policies such as planning, finance, trade, industry, agriculture and those responsible for education and training, labour market policy and social protection.
Employers’ and workers’ organizations are important partners for policy and programme development, and can help by strengthening links between business, education and promoting the rights of young people at work.
Across the board, youth and young women in particular face the most difficulties in gaining access to financial services. Every day, so many young African entrepreneurs are not deemed creditworthy because they do not have enough savings or a track record with formal savings institutions. Furthermore, funds are not available to provide the five million or so youths who are expected to start a business every year in Africa over the next 10 years with a grant of $100, which is about the average amount given in pilot programmes.
Access to credit should be improved for sustainable youth enterprises, in particular micro, small and medium-sized enterprises, cooperatives and social enterprises. This may include grants, subsidizing credit, guaranteeing loans and supporting microcredit initiatives, together with encouraging the use of innovative tools for financial inclusion, such as mobile banking, payment platforms and digitalized payments.
Education and vocational training, including apprenticeship, are essential for improving Africa’s youth productive capacities. To make education and training relevant, institutional and financial arrangements should build solid bridges between the world of learning and the world of work. Bringing together government, business, labour, training providers and youth representatives at the local level is the most direct route to secure the relevance of training to the needs of enterprises and labour markets.
It has been calculated that a 1% increase in intra-African trade will result in a 1.47% reduction in overall youth unemployment. Also, a 1% increase in intra-African trade will lead to 1.67% and 1.46% reduction in female and male youth unemployment rates, respectively4. Deepening inter-African exchange is key to promoting regional production for regional markets as well as for regional operations that supply global markets. Regional cooperation is the name of the game.
Regular institutional communication and highly participatory approaches are essential to support policies and programmes aimed at improving the employment prospects of young people. Representatives of the young people who are affected by policies towards youth employment should have a say in their design and implementation. Direct involvement of the youth in the elaboration and implementation of policies and programs supporting their employment will be the real game changer for the way forward.
The performance of the youth employment objectives should be systematically measured to enable verification of overall success or failure of national policies and action plans to promote youth employment. Given the limited resources, this provides vital feedback for improving policy, programme and project design as well as strategic fund reallocations.
Every decent job for a young African man or woman is a step towards the development of Africa. This is not only an agenda for governments, but also for business, trade unions, regional institutions and international development cooperation. Nobody can do it alone.
Such a feat also requires innovative mechanisms for the direct participation of young women and men as well as engagement with them. Nothing can be done without the youth.
Empowering the youth is developing Africa. This may come quickly if youth employment becomes the litmus test of Africa’s development policies.
The views expressed herein are those of the author and do not necessarily reflect the views of the International Labour Organization.