Vigorous Private Sector Growth Answer for 40 Million Jobless African Youth

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The African continent is experiencing jobless growth, according to Mthuli Ncube, chief economist and vice president of the African development Bank (AfDB). "That is an unacceptable reality on a continent with such an impressive pool of youth, talent and creativity," he said.

The African Economic Outlook 2012 says that with the number of youths in Africa set to double by 2045, countries across the continent should boost job creation and help young people acquire new skills. "Creating productive employment for Africa's growing young population is an immense challenge, but also the key to future prosperity," says the study.

Co-written by the AfDB, the OECD development center, the United Nations economic commission for Africa (UNECA) and the UN development program (UNDP), the report says youth are an opportunity for future economic growth.

Currently, youth represent 60% of the continent's unemployed, and of these 40 million youths, 22 million have given up on finding a job, many of them women. Unless Africa moves swiftly, turning its human capital into economic opportunity, youth could present a significant threat to social cohesion and political stability if they do not secure decent living conditions.

The report says that high growth alone is not sufficient to guarantee productive employment. Youth employment is largely a problem of quality in low-income countries and one of quantity in middle-income countries.

Africa has the youngest population aged 15-24 in the world. The number of young people in the continent will double by 2045. Between 2000 and 2008, Africa's working age population (15-64 years) grew from 443 million to 550 million, an increase of 25%. In annual terms this is a growth of 13 million or 2.7% per year (World Bank 2011). If this trend continues, the continent's labor force will be one billion strong by 2040, making it the largest in the world, surpassing both China and India (McKinsey. Global Institute, 2010).

Africa's youth population is not only growing rapidly, it is also becoming better educated. Based on current trends 59% of 20 to 24 year olds will have had secondary education in 2030, compared to 42% today. This translates into a group of 137 million with secondary education and 12 million with tertiary education in 2030. Although significant quality gaps remain, these trends offer an unrivalled opportunity for economic and social development if the talents of this swiftly increasing reservoir of human capital are harnessed and channeled towards the productive sectors of the economy. If opportunities to achieve decent living conditions are not created then the social and political risks become threats.

The report recommends that African countries design better coordinated strategies to effectively tackle youth employment, focusing on job creation in the private sector while providing the right conditions for businesses of all sizes to grow and expand their workforce.

The report points to a paper "The Economics of the Arab Spring" (Malik and Awadallah 2011), which says that the "singular failure" of the Arab world to develop a private sector that is independent, competitive and integrated into global markets. Although such hard words are not warranted for all of Africa says the AfDB, they do make a valid general point. Given Africa's strong population growth and the necessary downsizing of the public sector in many countries, a vigorous private sector is the most important source of jobs for the young. Yet the analysis of 53 countries in Africa in the AfDB report reveals that a lack of sufficient job creation is by far the biggest hurdle young Africans face today.

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