While the rest of the world faces the challenge of ageing, Africa faces a very different issue: the population is growing. By 2030, half of all new entrants to the world’s labour force will come from sub-Saharan Africa, which will require up to 15 million new jobs annually.
As the graphs in this article show, this challenge is particularly acute in fragile, conflict-affected and low-income economies. This group represents almost 80 per cent of the region’s annual job creation needs, but to date, these nations are the ones struggling the most to create opportunities.
What are their characteristics?
These economies have high fertility rates and the young population has not yet reached its peak. For example, Niger has a population of 26 million people and a percentage of young people that isn’t expected to peak until 2058 – the country will need to create 650,000 new jobs every year for the next 30 years. In contrast, many middle-income countries, such as Botswana, Ghana, Namibia and Mauritius, have already seen their share of young people in the population peak and will face less severe pressures for job creation.
Robust employment growth is not only good for the countries and people of the region, but will also provide an engine of growth, consumption and investment for the global economy
The formula for success
Harnessing Africa’s population growth potential requires the creation of a large number of productive, quality jobs that provide incomes above subsistence level, whether in formal employment or self-employment. There are three major challenges to creating enough good jobs, but policymakers have the tools at their disposal to make a difference:
1. informal jobs: instead of a trap, turn them into a springboard. Here, specific policies include increasing productivity in the informal sector through appropriate skills training, better access to finance and policies that encourage the transition to formal employment. It is important to create labour market programmes that help young people (especially women, who face additional barriers) enter the labour market, ensuring that they have the tools to succeed.
2. Increasing opportunities: creating conditions that lead to job growth in high-productivity sectors such as modern services and manufacturing. Given limited public finances, governments can prioritise measures that benefit multiple sectors, such as improving market competition and making value-for-money infrastructure investments. They should be wary of industrial policies that target specific sectors, as they can be costly, distorted and pose risks of corruption.
3. Breaking down barriers: the growth of grassroots private initiative must be unhindered. In other words, important infrastructures such as electricity, internet, roads and accessible public transport must be prioritised to facilitate the flow of goods and services. Reducing bureaucracy and corruption will also help companies to grow. Attracting more foreign direct investment and developing local capital markets can make more finance available. And strengthening regional integration and trade can broaden markets.
Increasing the production potential of the informal economy can promote growth
The role of the international community
The international community has a lot to gain from prosperous employment in sub-Saharan Africa. Robust employment growth is not only good for the countries and people of the region, but will also provide an engine of growth, consumption and investment for the global economy. Failure can exacerbate poverty, fuel instability and drive migration, while success can unlock prosperity for both Africa and the world. Policymakers must strive for meaningful change that will create a pathway for millions of people towards a brighter professional future.
