Thursday, November 30, 2023

African countries urged to create jobs for young people

African economic growth was stable last year, and it is expected to pick up in the next two years. However, the African economies have been urged to address human capital development, in particular, the youth joblessness that is frustrating Africa’s promising potential, said the African Development Bank’s 2020 African Economic Outlook released on Thursday.

The resource rich continent’s growth remained stable in 2019 at 3.4 percent and is on course to pick up to 3.9 percent in 2020 and 4.1 percent in 2021. The slower than expected growth is partly due to the moderate expansion of the continent’s “big five” — Algeria, Egypt, Morocco, Nigeria, and South Africa – whose joint growth was an average rate of 3.1 percent, compared with the average of 4 percent for the rest of the continent.

According to the report, last year, for the first time in a decade, investment expenditure, rather than consumption, accounted for over 50 percent of gross domestic product (GDP) growth. Overall, the forecast described the continent’s growth fundamentals as improved, driven by a gradual shift toward investments and net exports, and away from private consumption.

East Africa maintained its lead as the continent’s fastest-growing region, with average growth estimated at 5 percent in 2019. North Africa was the second fastest, at 4.1 percent, while West Africa’s growth rose to 3.7 percent in 2019, up from 3.4 percent the year before. Central Africa grew at 3.2 percent in 2019, up from 2.7 percent in 2018, while Southern Africa’s growth slowed considerably over the same period, from 1.2 percent to 0.7 percent, dragged down by the devastating cyclones Idai and Kenneth.

The infrastructure focused financing bank said the shift from consumer to investment led growth can help sustain and potentially accelerate future growth in Africa, and increase the continent’s current and future productive base, while improving productivity of the workforce.

The Bank’s flagship publication, published annually since 2003, made fresh calls for swift action to address human capital development in African countries, where the quantity and quality of human capital is much lower than in other regions of the world.

The report also noted the urgent need for capacity building and offers several policy recommendations, which include that states invest more in education and infrastructure to reap the highest returns in long-term GDP growth. Developing a demand-driven productive workforce to meet industry needs, is another essential requirement, said the report.

“Africa needs to build skills in information and communication technology and in science, technology, engineering, and mathematics. The Fourth Industrial Revolution will place increasing demands on educational systems that are producing graduates versed in these skills,”.

With a bulging youthful population, AFDB says to maintain the current level of unemployment, Africa needs to create at least 12 million jobs every year.

“Youth unemployment must be given top priority. With 12 million graduates entering the labour market each year and only 3 million of them getting jobs, the mountain of youth unemployment is rising annually,” said Akinwumi Adesina, African Development Bank President, during the launch of the report.

The findings from the report rings true for economies like Botswana which are struggling to absorb its growing young population in the labour market. This month, Statistics Botswana’s quarterly Multi-topic Survey, which covered 2019’s third quarter showed that 20.7 percent of the economically active people were without jobs. The most affected has been the young people, accounting for 26.7 percent of the unemployment rate.

According to the International Labour Organisation (ILO), Botswana’s high youth unemployment rate places it in the tenth position of countries hard hit by unemployment.

The diamond dependent economy could find itself with a crisis in the next ten years as the future supply of labour continues increasing. According to the labour survey, about 30.6 percent of the economically inactive population or 193,172, is made up of students who will later need jobs. Furthermore, the 20.7 percent unemployment rate does not include discouraged job seekers, which are estimated to be above 100,000.

With a growing Gini Coefficient, which measures inequality, Botswana is counted among the top three most unequal countries when it comes to income and opportunities, a situation which has been made worse by the declining standards of education.

Last week, president Mokgweetsi Masisi angered many of the unemployed youth when he said it was not government’s responsibility to create jobs. Masisi said his role is to facilitate a conducive environment that will have the private sector generating the needed jobs. However, the private sector in Botswana has proved weak, dominated by multinationals that are not making the right investment in the country as most of the profits are shipped to foreign shareholders.

“As we enter a new decade, the African Development Bank looks to our people. Africa is blessed with resources, but its future lies in its people. Education is the great equaliser. Only by developing our workforce will we make a dent in poverty, close the income gap between rich and poor, and adopt new technologies to create jobs in knowledge-intensive sectors,” said Hanan Morsy, Director of the Macroeconomic Policy, Forecasting and Research Department at the Bank.


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