The International Labour Organization estimates that between 2000 and 2008, Africa created 73 million jobs, but only 16 million for young people aged between 15 and 24.Youth employment is largely a problem of quality (of jobs and job seekers) in low-income countries and one of insufficient quantity in middle-income countries. Youth in vulnerable employment and working poverty are the large majority in poor countries–think mining for rare earth metals for instance–while in upper middle-income countries youth are more likely to be unemployed, underemployed or out of the labour force altogether. Across the African continent, more young people are discouraged than unemployed, suggesting that the challenge of youth employment could be much worse than it appears. And the cost in terms of poverty is high. On average 72% of the youth population in Africa live with less than $2 per day.
But where will the jobs come from? Public sectors will not be able to absorb the tide of young job seekers. And while the private formal sector is growing, it does so from too small of a base to absorb the looming demand for jobs. Existing firms in this sector are the primary source of jobs paying a living wage, but they will need support if they are to grow further, become more competitive and eventually turn into a decent source of job creation.
The informal and rural sectors will continue to be the most important source of new employment by far. Governments must work with this reality and focus on removing obstacles to the many small informal firms, helping them to grow and create decent jobs.
Take informal street trading which accounts for a large proportion of new urban jobs in Sub-Saharan Africa. Workers in this informal sector often lack a right to a place to work and are vulnerable to harassment by police, city officials and wholesale traders. The latter often abuse their relatively strong positions to force street traders to borrow from them at very high interest rates.
To address such problems, street traders in some countries have become organised and even participate in urban planning. This has been the case in Dar es Salaam as well as in Durban where street traders have been issued licences to operate. Here, associations of street traders have established good relationships with city authorities and special infrastructure was set up for them in central locations.
Skills pose another common problem. Schools and training centres are simply not providing young people with the know-how that employers are looking for. However, a lack of demand for labour generally is the main barrier to overcome.
Governments must do more to help on this front. Although there is no shortage of government programmes focused on youth employment, their track record is poor. One of the biggest shortcomings of these initiatives is a general lack of knowledge on what works well and what does not, something closely linked to a major scarcity of employment data available for Africa. A second obstacle is a frequent lack of co-ordination among government agencies.
Despite this challenging short-term outlook, the long-term perspective is good, but only if African governments manage to tackle the hurdles young people face. Improvements in education, the emergence of new technologies and rapid urbanisation all present opportunities for developing burgeoning economic sectors and creating jobs. But ironically, it is in the informal and rural sectors, long seen as problems, that lies much of the entrepreneurial talent needed to raise employment prospects for youth. Tapping into this resource is what government policies must now focus on.
AfDB, OECD, UNDP, UNECA (2012), African Economic Outlook 2012: Promoting Youth Employment, OECD Publishing.
Jütting, J., J. de Laiglesia (2009), Is Informal Normal? Towards More and Better Jobs in Developing Countries, Development Centre Studies, OECD Publishing.
© OECD Observer No 292, Q3 2012.