AfDB warns of huge mismatch between growth and jobs

The recent wave of discontent in North Africa illustrates the disruptive consequences of youth unemployment in general, and unemployed graduates in particular.

By John Oyuke

Despite the annual economic growth of  5 per cent,  Africa  is unable to expand employment opportunities for youth 

African countries have been urged to boost long-term competitiveness so as to ensure sustainable improvement in living standards.

The just concluded World Economic Forum (WEF) in South Africa noted that though African economies have made strides in achieving economic growth in recent years these must be accompanied by efforts to match economic growth and job creation.

A report released at the forum dubbed, “Africa Competitiveness Report 2013,“ stressed the need for Africa to raise competitiveness, diversify its economic base and create enough jobs for its young, fast-urbanising population.

According to the African Development Bank, which has jointly published the report with the World Bank, despite commendable annual economic growth rates of 5 percent and notable progress achieved in the area of education, including higher education, Africa has been unable to expand employment opportunities for young people, especially the most educated ones.

The mismatch between high rates of economic growth and job creation is widening income inequalities and fueling social and political tensions.

The current youth employment challenges in Africa are caused by a combination of the remarkable growth of an increasingly educated youth population, the slow pace of job creation in the formal economy, and persistent low productivity and underemployment in the informal sector.

The continent’s youth population is not only growing rapidly, it is also getting better educated.

Africa has the most young people (15–24 years) in the world, totaling about 200 million, and it is projected to double by 2045.

Projections show that 59 per cent of youth (20–24 years) will have had a secondary education in 2030, compared with 42 per cent today. This translates into 137 million people with a secondary education and 12 million with a tertiary education in 2030.

According to the report, the youth employment challenge in Africa is primarily structural and therefore needs structural solutions.

“Given the size of the employment problem, any youth employment policy in Africa must place job creation at its centre.,” the report quotes ADB experts as saying.

Governments must focus on removing obstacles to the many small firms in the informal sector, helping them to grow and create decent jobs.

At the same time, existing large firms must be supported to grow further and become more competitive. Unemployment of graduates and underemployment in the informal economy (where most the young people work in low-productive jobs) are factors of instability, especially among the youth in post-conflict settings and fragile states. The recent wave of discontent in North Africa illustrates the disruptive consequences of youth unemployment in general, and unemployed graduates in particular.

Afrrica has vacancy rates in the presence of large-scale unemployment.