Sunday, December 5, 2021

Youth Bulge: A demographic dividend or Bomb for Southern Africa?

According to an analysis feature titled “Youth Unemployment Dilemma in Africa: An Examination of Recent Data” authored by Eva Penar, empirical studies have concluded that youth unemployment is attributed to a skills mismatch between skills acquired in school and skills required in the labour market. This has resulted in many young people, particularly graduates, not having the relevant skills to make them employable and competitive in the workforce.

The 2017 International Labour Organization (ILO) show that across Africa, the youth unemployment rate among those with an advanced or intermediate level of education is higher than those with basic education.

The higher unemployment rate among the youth is also due to the fact that limited formal jobs are created to absorb the number of new graduates entering the labour market each year. Instead, the youth with higher levels of education “settle for low productivity jobs”.

The fact that many young people with advanced levels of education are facing unemployment is a serious cause of concern which requires immediate intervention since the consequences of this “are the growing prospect of political and social instability and even migration of young people out of African countries”.

In response to the youth unemployment challenge, many African governments are embarking on interventions and programmes to provide employment opportunities for young people with a focus on practical skills development and acquisition to make them employable in the labour market.

Given the prevailing unemployment scenario, African governments are encouraged “to prioritize skills development in their educational system by investing in quality education and entrepreneurship training that equip young people with skills employers need.

“African governments must also invest in a broad range of programmes such as Science, Technology, Engineering and Mathematics (STEM) and social sciences, as well as technical and vocational education that focus on skills development and training that are relevant to the socio-economic development of African economies”, submits Penar .

It is also argued in the paper that young people are not gaining the requisite skills for the labour market due to limited internship opportunities or exposure to the industry, particularly for college students.

It is reckoned further that an internship is one of the ways a college student can gain relevant work experience for the workforce. However, students on the continent of Africa find it difficult to find an internship placement much less one that pays.

African universities should work with industry players to establish internship programmes to give college students exposure to the work environment and opportunities to gain relevant market-driven skills that make them competitive and employable in the labour market.

“To address youth unemployment challenge on the continent, African leaders must diversify their economy from over-dependence on natural resource exports to value-added products that enable job creation on the continent”, argues Penar citing for example, the agricultural sector that accounts for 50 percent of total employment in Sub-Saharan Africa, and investment in the agricultural sector and the food system that will help generate job opportunities needed in the economy.

Penar also encourages African leaders “to develop policies that support small businesses and young entrepreneurs to thrive and succeed such as making financing more accessible. In addition, governments must address the infrastructure deficits affecting business productivity on the continent such as high-speed internet connectivity and electricity supply shortages which constrain entrepreneurial activity and job creation on the continent”.

It is also argued that while young people are the ones disproportionately affected by the challenge of unemployment and are also the majority of the population in African countries, “African governments will benefit immensely from its young population if their potential is harnessed through proper investment in their education and skills”.

In 2017, The African Capacity Building Foundation (ACBF) produced an occasional paper under its Strategic Studies Group. The paper, titled, “Youth Unemployment in Africa: Capacity Building and Innovative Strategies” assessed the causes and impacts of youth unemployment in Botswana, Namibia, South Africa and eSwatini (former Swaziland).

It profiled and characterized the status and nature of youth unemployment – and identified the challenges, implications, and gaps – to find ways to address it. The paper’s findings show that capacity gaps emerge in institutional frameworks, policy and programme development and implementation, and (most important) the quality of education, notably its adequacy and relevance for addressing constraints and challenges for youth employment-creation sectors, such as agriculture, manufacturing, and small and medium enterprises, which can absorb the growing labour force.

Through its individual and institutional capacity building interventions, the ACBF has helped tackle youth unemployment by creating training programmes in economics, policy analysis and management, and science and technology; establishing policy institutes and think tanks to help the policy environment shape countries’ job-creating potential; and producing and disseminating knowledge and experience required to guide policymakers “in unlocking the potential of young people”.

According to the paper, assessing the growth versus unemployment performance achievements of the four countries and other African regions demonstrates that although African growth has been impressive over the last decade, averaging more than five percent from the early 1990s, “the positive growth achievements have not translated into high employment generation rates”. Overall unemployment is high and in Sub-Saharan Africa stands at 17 percent.

Coupled with high unemployment is growing youth unemployment, with rates far higher than overall registered unemployment rates in a continent where the population is growing and becoming younger. Youth unemployment in SSA is twice that of adults (12.8 percent versus 6.5 percent) and in North Africa nearly quadruples that of adults (27.1 percent versus 7 percent).

“Growth rates do not guarantee productive employment for the increasing population and labour force. Among the Sub-Saharan case study countries, Botswana and Namibia (with higher growth averaging more than six percent since the 1990s) have high unemployment of more than 15 percent), with youth unemployment estimated at more than twice that. in South Africa, though a larger economy, youth unemployment reaches 50 percent. South Africa’s economic growth remains too low (about three percent) to generate the jobs to rein in the high unemployment. In Eswatini, growth rates are also low” it is stated.

The paper emphasizes that generating higher growth requires support at the national level because growth alone is insufficient to generate jobs, especially in countries such as Botswana “where the private sector is still limited”. Even in South Africa, which have a large private economy, “generating the requisite jobs has been elusive. Identifying opportunities for growth is therefore a policy priority”.

According to the paper, labour force participation rates for the youth are lower among developing countries and those of the selected Sub-Saharan countries. As with overall unemployment, the proportion of young women constitutes a lower share of the total labour force, which indicates possible changes with labour markets structure and policies.

It is acknowledged that “the growing youth population has placed immense pressure on African countries to address youth unemployment, but their ability to generate employment among sectors such as agriculture and manufacturing is limited by infrastructure constraints. The youth’s lack of entrepreneurial skills limits their ability to develop businesses that can generate employment and growth, and their lack of capital to exploit business opportunities that limit their chances of starting and sustaining a business”.

“Lack of youth involvement in the design and formulation of policies and programmes has been cited as a major factor in the poor results, inappropriate targeting, limited sustainable transformational impacts, and poor outreach between rural and urban areas and between males and females are areas that require further programme development. Lack of capacity to implement policies to address youth unemployment, particularly on the mismatch between tertiary education and job needs, require tighter policy focus”, states the paper in relation strategies across the Sub-Saharan countries that aim to address youth unemployment.

According to the paper, the long and difficult agenda to address the concerns, especially on capacity and policy gaps will take time to deliver, and so requires attention to managing transitions and sequencing of reforms. Countries that have tackled youth unemployment indicate the need for reform and flexibility in the labour market.

The paper observes that over the last decade, Africa’s robust growth outperformed the global growth rate. Between 2004 and 2013, Africa’s high growth rate was largely driven by Sub-Saharan Africa and its emerging and frontier economies. Six of the world’s fastest-growing economies were in SSA. The region has shown resilience after the financial and economic crisis of 2008, returning to growth of about five percent in 2013.

“But high poverty, inequality and unemployment rates, particularly among the youth, persist among Sub-Saharan countries”, states the report adding that unemployment, under-employment rates are highest in Sub-Saharan countries at 32 percent.

Countries and territories such as South Africa, Botswana, eSwatini, Iran, Iraq, and the Palestinian Occupied Territories have among the highest rates in the world, largely driving the high unemployment rates in the Middle East and North Africa and the SSA region.

SSA’s population is becoming more youthful, with youth as a proportion of the total projected at more than 75 percent by 2015, due to the high fertility rate underlying the demographic momentum and “it is expected that the number of young people will not decline for at least 20 years”.

Further, estimates show that about 133 million young people (more than 50 percent of the youth population) in Africa are illiterate and thus creating opportunities for the burgeoning number of youth is a necessity that cannot be solved at country level.

“Many young people have little or no skills and are therefore largely excluded from a productive economic and social life. Those that have some education often exhibit skills irrelevant to the labour market, where education and skill requirements are increasing, resulting in millions of un- and underemployed youth. Young women feel the sting of unemployment even more sharply. In most countries in Sub-Saharan Africa and all in North Africa, it is easier for men than women to get a job, even if the women have equivalent skills and experience”, the paper argues.

It is further submitted that SSA needs to bring in strategies to expand job availability and productivity for several reasons. First, most people in SSA depend on labour income to survive, and the number of the poor in the region is still high. Second, the demographic dividend will result in a sharp increase in the working age population.

“By 2020, more than half of SSA’s population will be younger than 25, placing immense pressure on economies to boost growth and create employment. Absorbing these individuals into productive activities that help reduce poverty rates is crucial to avoiding social and political tensions that could derail much of the progress achieved thus far”, the International Monetary Fund argues.

The paper also acknowledges that “the four countries’ growth performance demosntrates that just hastening the pace of growth may not be enough to lower unemployment. Real efforts beyond the current strategies are needed, if the development achievements made so far are to be consolidated”, it is argued adding that “the high economic growth is insufficient to guarantee productive employment for all shows the lack of capacities among these economies to rein in unemployment”.

The close association between poverty and unemployment warrants special attention in Africa. Poverty is still widespread in Africa, which is also grappling with extreme hunger, as well as unemployment and inequality, which has increased over the past decade.

A survey by Afrobarometer in 34 African countries between October 2011 and June 2013 indicates that poverty rates in SSA have gone down but that “the number of people in poverty has increased despite a decade of relatively high growth”.

It is submitted that “reversing this trend is a challenge that African policymakers have to address in the short to medium term to enhance the likelihood of achieving the African Union’s vision of an integrated, prosperous, and peaceful Africa. Without long term solutions to high unemployment, more young people will fall into poverty”.

The paper also underscores the fact that high poverty and unemployment rates trigger the need for support for policy strategies put in place to drive the transformation and growth process in Africa. Since the dawn of the new millennium, African governments and the international community have adopted various initiatives and at the continental level like the New Partnership for Africa’s Development.

“One would expect sectors that drove output growth in the period to be more likely to create jobs. However, for Botswana, although mining contributed significantly to output and industry growth, the sector does not contribute much to employment. Further statistics at country level in Botswana show a stagnant share of mining to the employment contribution… At the heart of the Botswana’s challenge with employment, and more widely inequality, is the extractive-based economy”, argues the paper adding that “diamonds brought wealth to the government, but not jobs to the people, at least not directly”.

Moreover, the rural and peripheral populations, which remain substantial, “have few opportunities for productive activities outside subsistence agriculture and livestock rearing”.

In this historical context, it is contended that high levels of unemployment and inactivity, and an imbalance towards public sector employment would be expected, “until the economy goes through a structural transformation and develops a more diversified private sector base.

“This is normal in extractive-based economies, like Botswana, that are still in the first few generations of development, and face other structural constraints to competitiveness in diversified sectors, such as scale and geography. It is only when such extractives economies develop a competitive private sector base, through domestic entrepreneurialism  and foreign direct investment (FDI), that sustainable private sector job creation typically becomes possible”.

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