Africa faces a very daunting challenge. According to the International Monetary Fund (IMF), Africa needs to create about roughly 18 million additional jobs every year for 20 years from 2015 to 2035. The World Bank’s estimate is roughly 15 million new jobs until 2030. The African Development Bank comes in lower at about 10-12 million new jobs during the 2020s. One estimate even suggests that this annual requirement will grow to 30 million new jobs by 2050. The scary part is that Africa’s working age population will still be growing by then. It is commonly agreed (and in my opinion it should go without saying) that not just any job will do. They need to be decent and high productivity jobs.
How has Africa fared so far? Well, since 2000, sub-Saharan Africa has added on average of about 9 million jobs a year. At least 2/3 have been in subsistence or smallholder agriculture, self-employment or providing low value added services – activities that tend to be poorly remunerated and precarious. Less than 1/3 of the jobs – 2.6 million – have been in waged employment, with only 200,000 – 300,000 provided by the industrial sector.
The above two paragraphs (I have paraphrased them) come from my good friend, Edward Paice’s book, titled Youth Quake: Why African Demography Matters, published in 2021. Edward was so kind as to gift me a complimentary copy. The book is loaded to the brim with facts, insights and data about African demography. His book will be my main reference for this post. Edward hails from Britain and runs a Think Tank focused on Africa called Africa Research Institute , out of London.
You might be wondering how Africa got itself into this demographic mess. Well, Africa’s present condition is the result of subtle interplay between demography and economics known as the demographic transition, or as in Africa’s case the lack of a demographic transition. I have discussed the demographic transition in a previous post. Then, I pointed out that the demographic transition refers to a phenomenon where there is a shift from high birth rates and high death rates in societies with minimal technology, education (especially of women) and economic development, to low birth rates and low death rates in societies with advanced technology, education and economic development, as well as the stages between these two scenarios.
I had pointed out that there were 5 stages. Stage 1 is characterized by high birth rates and high death rates. During this stage, the society evolves in accordance with the Malthusian paradigm, with population essentially determined by the food supply. Any fluctuations in food supply tend to translate directly into population fluctuations. In stage 2, the death rates drop quickly due to improvements in food supply and sanitation, which increase life expectancy and reduce disease. This is the stage that most sub-Saharan African countries are at. The resulting fall in death rates tends to lead to a population explosion. In stage 3, birth rates begin to fall rapidly as a result marked economic progress, an expansion in women’s status and education, and access to and use of contraception. In stage 4, both birth rates and death rates are low. No country is at stage 5.
It has been observed in general that successful industrialization plays a crucial role in helping countries get to the highly desirable stage 3. This is so because successful industrialization should take the bulk of the unemployed, those relying on subsistence, smallholder agriculture and those relying on low value service provision, out of their informal, precarious circumstances and place them in formal, waged, high productivity employment. This process ends up aiding birth control as former subsistence farmers no longer have to rely on children as a source of income-generation through using them as farm labour. It further aids birth control because people in formal employment will often have access to formal social safety nets in old age like pensions. This reduces the need to depend on adult children as a source of income. So in essence, successful industrialization gives a double benefit; it increases the number of jobs available and reduces the number of people competing for the available jobs. Where industrialization suffers a case of arrested development like in much of sub-Saharan Africa, this double benefit isn’t acquired, hence the African Job Crisis.
Research jointly sponsored by the African Development Bank, the Brookings Institution and the United Nations University World Institute for Development Economics Research, around 2016 showed that by any measure, Africa’s industrial sector is small relative to the average for the developing world as a whole. The share of manufacturing in GDP is less than one-half of the average for all developing countries, and in contrast with developing countries as a whole, it is declining. Manufacturing output per capita is about 10 percent of the global developing country average. Per capita manufactured exports are slightly more than 10 percent of the developing country average, and the share of manufactured exports in total exports is strikingly low. Moreover, these measures have changed little since the 1990s. The research also showed that both regionally and at the individual country level, Africa ended up in 2015 more or less where it started in terms of industrial development in the 1970s. That is roughly some 40 years standing in the same spot. South Korea went from being one of the world’s poorest countries to one of the world’s richest in the same timeframe.
We have looked at the African Job Crisis in general. Let’s look at the details for specific countries. Edward Paice’s book is armed with details about quite a number of African countries, you really should check his book out. I will take just a sliver of that information and for just 3 countries: Nigeria, Uganda and Kenya.
Nigeria’s working age population is set to expand by about 2/3 to 150 million between 2010 and 2030. The magnitude of this increase is double that of between 1990 and 2010, and equivalent to the addition of the entire population of France or Thailand. The working age population will expand by a further 100 million to 250 million between 2030 and 2050. Almost 20 million young Nigerians sought to join the workforce between 2014 and 2018 but only 3.5 million new jobs were created; in 2018 there were just 450,000. By the end of that year, the number of Nigerians unemployed but actively looking for work had almost quadrupled over 5 years to 21 million, an official unemployment rate of 23%. Among Nigerians with post-secondary-school education, the rate had almost tripled to 30%, meaning that an educated Nigerian was more likely to be unemployed than Nigerians in general. Unemployment of youth also tripled to 13.1 million in the same period, a rate of 30%. If underemployment among youth is added, the combined rate reached 55%. Nigeria’s unemployed total far surpasses that of all European Union (EU) states combined, even though the EU has twice the population of Nigeria.
Nigeria’s National Bureau of Statistics estimates that about ¾ of all new jobs are created by the traditional or informal sector. This accounts for more than half of GDP and the total workforce – about 55 million Nigerians in all. Only 1 in 10 have formal waged employment, well below the level of 2 decades ago, and more than half of these prized jobs are in the public sector. For the official unemployment rate simply to stabilize at its current level of 20-25% during the decade to 2030 will require the creation of 30-35 million jobs. This is almost 10 times the number of jobs created in the 5 years from 2014 to 2018.
In Uganda, the official unemployment rate in 2018 Statistical Abstract was 9%, with youth unemployment at 13% – considerably lower than in South Africa or Nigeria. People whose occupation is subsistence agriculture – some 6 million, or 40% of the working population – are counted as being outside the labor force and are therefore not included in the calculation of unemployment. Among the 7.75 million youth, defined in Uganda as between 18 and 30, 3.3 million are outside the labor force, of which 2.2 million are categorized as Not in Employment, Education or Training (NEET) and 1.1 million as ‘potential labor force’. By simply adding the ‘potential labor force’ number to the 0.6 million young people who are officially unemployed, youth unemployment rises from the headline rate of 13% to 38%.
The full extent of joblessness among under-30s is even worse. The term ‘in employment’ as applied to 3.9 million young Ugandans is open to misinterpretation. Only about 2.1 million of them have ‘transited’ to a job deemed ‘stable’ or ‘satisfactory’, whether working for someone else or self-employment; the remaining 1.7 million are among 5 million Ugandans classified as ‘in transition’, meaning they are employed in temporary or unsatisfactory work, or in effect unemployed. By exactly how many those ‘in transition’ would further swell the ranks of the unemployed is not discernible from official statistics, but the true extent of youth unemployment is certainly more than 50%. In recent years both the AfDB and Ugandan research institute Advocates Coalition for Development and Environment have asserted the real figure is higher than 60%. Please note that the Ugandan Bureau of Statistics is not deliberately trying to misrepresent the situation. It is simply following international guidelines, which inadvertently end up hiding the true extent of the job crisis.
Kenya has acquired a reputation for having one of the most vibrant private sectors on the continent. The number of waged jobs in the private sector – over 2 million – is more than double those in the public sector. It is also one of a handful of African countries that has reached stage 3 of the demographic transition. Sadly though, Kenya has an unemployment/underemployment of its own. The 2015-16 Labour Force Survey enumerated an economically active population between the ages of 15 and 54 of 19.3 million Kenyans, of whom 1.4 million were classified as unemployed. If underemployed are added, this figure rises to 5 million, or about a quarter of the labor force. Among Kenyans with tertiary education, more than a quarter were economically inactive. Furthermore, the decent job crisis is worsening and therefore the number of unemployed youth is forecast to double by 2035, with a commensurate rise in underemployment as well. More than 750,000 young Kenyans are entering labor market annually, a number that will not start to ease until midcentury. In 2017 and 2018, the economy created between 850,000 and 900,000 new jobs. However, it is self-employment in the urban and rural informal sectors, or firms with a couple of employees, that generate almost 90% of new jobs – and account for over 80% of total employment in Kenya. Whereas salaried employment reached a total of 2.76 million in 2018, an increase in more than a 3rd in a decade, in the same period the number of Kenyans in informal employment grew by 70% to 14.1 million, 2/3 of them in rural areas. Only about 1 in 10 of eligible workers succeed in finding waged employment and over a quarter of these waged jobs are classified as casual – not employed for longer than 24 hours at a time.
None of this makes pleasant reading, but it is necessary in order to understand the true extent of the African Job Crisis. I had mentioned in a previous post that manufacturing has the greatest multiplier effects in terms of jobs created when compared to either agriculture or services. That in my book, should make it the top priority of just about every single sub-Saharan African government, especially in the light of how it helps countries achieve the demographic transition.
BEFORE YOU GO: Please share this post with as many people as possible and please check out my book, Why Africa is not rich like America and Europe on Amazon. Thank you
Bibliography
- Paice, Edward. 2021 Youth Quake: Why African Demography Matters. London: Head of Zeus
- Wikipedia article on the demographic transition https://en.wikipedia.org/wiki/Demographic_transition
- Newman, Carol et al. 2016 Made in Africa: Learning to Compete in Industry. Washington D.C: Brookings Institution Press
