Private Sector is Key to Solving Africa’s Youth Unemployment Crisis, Agree High-Level Experts

Share |

Various African experts came together to debate solutions to one of Africa’s most pressing problems – youth unemployment – on 8 June 2011 at the Annual Meetings of the African Development Bank Group, held in Lisbon Portugal.

While they all held differing views at the High Level Seminar on Youth Unemployment in Africa, they agreed on one thing – that the private sector in Africa had a central role to play in solving one of the most serious economic problems facing the continent today.

Young people represent about 35 percent of Africa’s working age population.  Joblessness has hit them hard.  While the unemployment rate in, for instance, Ghana, averages 8.7 percent, it is as high as 31.7% among the young. The situation is even worse in Sierra Leone, where youth unemployment is 52.5% against the national average of 10.2%.

They sometimes continue to suffer even if they have jobs because in some countries pay rates are extremely low.

More and more young graduates are coming onto the job market.  The number of graduates in sub-Saharan Africa more than tripled between 1999 and 2009 – from 1.6 million to 4.9 million.  And that figure is almost double to 9.6 million by 2020.

But partly because of their rising numbers, graduates are leaving colleges with no jobs to go to.  Another reason is that many have chosen less vocational subjects such as social sciences rather than more technical degrees.

Ms Obiageli Ezekwesili, Vice President for the Africa Region at the World Bank, remarked that the joblessness situation was even more surprising given the recent high economic growth rates in Africa.  “We have had growth rates in the last decade at levels of nearly 6 percent everywhere, but still there is 50 percent pernicious poverty”.

Even though the problem is already huge, it could get worse.  Ms Ezekwesil said that between seven to 10 million young people come on to the African job market every year, and the market was not growing fast enough to accommodate them.

Of those young people in employment, she said, between 70 and 80 percent were working in agriculture.  Looking at agriculture, she added, would be the “next big thing” in Africa.  Often, these jobs are low-paid and not very productive.

Only about 10 percent of the young working population were actually in formal sector employment, she said.

Another panellist, Mr Paulo Gomes, Managing Partner of Constelor Group, and a former World Bank Executive Director, put forward a three-pronged approach to the problem.

First, there had to be a sense of urgency about the young joblessness situation, which he thought was lacking across much of Africa.  Secondly, actors had to “think out of the box”, and not rely on previously-tried solutions.  For instance, he maintained that Africa could not just rely on the market to create jobs.  

Thirdly, it was time to move away from macro-policies and turn instead to micro-policies, smaller, more local methods of job creation.

Mr Gomes went on to say small and medium-size enterprises (SMEs) were one way of creating a “job reservoir”.  However, he said, he did not see many SMEs springing up in Africa to service the major multi-million projects happening on the continent.

“It’s not happening.  We should push companies to give contracts to African companies” he said.  The private sector had to work with civil society.  Governments also had a role to play: “We need very pro-active states”.

Also on the panel, Mr Jean Kacou Diagou, president of the Ivorian insurance group, NSIA, said part of the problem was many countries did not have a long-term vision, only short-term policies.  The private sector should be part of the solution.  Africa now has a developed private sector.  “Post-independence, we didn’t have one” said.

“We need to involve the private sector.  The private sector creates wealth and jobs”, said Mr Diagou.  More than that, governments and other institutions should involve the private sector in development.  “It is not given enough attention to see how it foresees development”, he added.