Want jobs? Here's where Africa can get them, plus a 5-point smart plan from those who've cracked it

The working age population in Africa will increase by 70% by 2030, and they will need work. But it isn't rocket science, here are some quick wins

MICROSOFT last week announced plans to create over 100,000 jobs and reach over seven million people across Africa and the Middle East by the end of the year through its YouthSpark Employability Platform.

The Platform is designed to provide end-to-end career guidance, skills improvement, job-matching and mentorship – all centred on a free online hub that brings public and private resources together in an attempt to address unemployment and underemployment.

It’s a small drop in the ocean, but every bit helps – the global jobs challenge is disproportionately an African one; two-thirds of the 13 million young people who join Africa’s labour force every year end up becoming part of the working poor – defined as those in some kind of work, but earning less than $2 a day.

Still, the opportunities are immense, considering that the working age population is projected to increase in Africa by 70% in the next fifteen years reaching 793 million, as it grows 17.6% in Asia, just 5.8% in North America, and shrinks 8.6% in Europe, according to data from the International Labour Organisation (ILO).

We look at some of the sectors, industries and places jobs can be created in the next decade and a half:

Agriculture – but not the usual stuff

Africa accounts for 60% of the world’s arable but uncultivated land, so a quick win might be to bring some of that land under cultivation. But that doesn’t necessarily create jobs – large scale staple farming, such as wheat, sorghum and soybeans, employs just 10-20 people per 1,000 hectares, according to a recent McKinsey report on jobs in Africa, titled Africa at Work.

Horticultural products require much more labour: oil palm requires 150-350 people per 1,000 hectares; apples, 500 and oranges, 800. Greenhouse tomatoes are some of the most labour-intensive crops, requiring 2,000 people or more per hectare.

Biofuel products, such as jatropha and sugarcane ethanol also fall into the more labour-intensive category, needing 400-700 people per hectare.

Shifting to such crops can increase wage-paying employment in rural areas and create sources of export revenue for countries. But they must also work to ensure their continued domestic food security.

Non-food agro-processing: Leather, wood, textiles

Today, more than half of African manufacturing jobs are in industries related to agricultural products, including the production of food and beverages, as well as non-food-related production of textiles, leather goods, and wood products. Ethiopia, for example, has invested aggressively in the textile and leather processing industries.

Non-food agro-processing industries, in particular, have the potential to grow and could increase their contribution to GDP by between two and five times if African countries were to reach similar shares of GDP seen in Indonesia and Thailand.

Although wages in agriculture-related manufacturing are only 60% to 80% of those found in other manufacturing subsectors, they would still be considerably higher than the subsistence-level incomes earned today by many African farmers.

Light export manufacturing

As China becomes more expensive to manufacture in, light export manufacturing is a potentially lucrative sector for African countries to go into – the advantage is that the sector is labour-intensive, but doesn’t need workers to acquire new skills or expertise first; they can learn by doing.

Wages in most of Africa are competitive with other global low-cost manufacturing hubs: monthly unskilled manufacturing wages in Ethiopia, Zambia, and Tanzania are $44, $105, and $180, respectively, compared with around $105 in Vietnam and $240 in China, according to a recent World Bank study.

Cleaning and packing acacia gum for export in Adama, Ethiopia. (Photo/Flickr/ Ollivier Girard for CIFOR).

The evidence shows that the productivity of African workers in well-managed factories is comparable with other countries, although overall productivity is lower than that of China or other countries because of poor logistics and infrastructure, as well as cumbersome bureaucratic procedures.

Green energy

Africa has some of the world’s most abundant renewable resources, but is also the least electrified continent. It means that the continent can leap-frog traditional carbon-emitting fuels straight into green energy, and a recent report by Oxfam said that the future of South Africa depends on the country’s ability to end social deprivation and manage environmental stress, “enabling its people to live in a space where it is both safe and just.”

The report says that an estimated 816,000 ‘green’ jobs could be created in the country by 2025 across the areas of natural resource management (biodiversity, water and land), energy generation, energy efficiency and pollution management.

Investments in expanding solar and wind capacity in Senegal, as well, would by 2035 create up to 30,000 additional jobs, and in Mauritius, a green economy scenario results in over 25% more employment that in a conventional growth scenario.

Lessons from five success stories, and what smart governments can do to tap into the opportunities, drawn from the Africa at Work report:

1. Identify one or more labour-intensive subsectors in which an African country has a global competitive advantage or could fill strong domestic demand.

Lesotho, for example, capitalised on the African Growth and Opportunity Act (2000), granting some African exports duty-free access to US markets. A landlocked nation surrounded entirely by South Africa, Lesotho developed industrial zones for the apparel industry and built rail links between them, offered incentives to foreign investors, and simplified the regulation of the sector. 

Today, Lesotho’s apparel exports to the United States are almost 100 times as large as South Africa’s on a per capita basis, and the sector is the single largest creator of jobs, employing about 40,000 people in 2008 in a country of just two million.

2. Improve access to finance in target sectors.

Cape Verde, for instance, encouraged foreign direct investment (FDI) to ease financial constraints on its tourism sector. To capitalise on the country’s beautiful beaches, it offered investors a five-year tax holiday, exemption from import duties, and unrestricted expatriation of profits. Revenues generated by foreign tourism increased from $23 million in 1999 to $542 million in 2008, and the sector now employs 21% of Cape Verde’s workforce.

3. Build a suitable infrastructure. Countries that remove infrastructure constraints in target subsectors, particularly in export-oriented industries, can reap sizable benefits.

Mali’s exports of mangoes to the European Union, for example, grew sixfold between 2003 and 2008 after a concerted public–private programme helped the country build integrated road, rail, and other infrastructure necessary to access export markets. These moves cut the transit time for shipments in half.

4. Cut unnecessary regulations. Removing needless red tape in certain sectors is also important.

In Rwanda, for instance, streamlining the procedures needed to open a business dramatically increased the number of new companies, from only 700 a year before the reform to 3,000 a year in 2012.

5. Develop skills in target sectors. Around 40% of African workers now have at least some secondary education, and that share will rise to 48% by 2020.

Few employers in our survey of businesses in Egypt, Kenya, Nigeria, Senegal, and South Africa reported that a lack of skilled workers was a top barrier to growth. Still, Africa’s educational attainment lags behind that of other regions, and the continent would undoubtedly benefit from continued improvement. Two things are of particular importance: work readiness among school graduates and, in some countries, specific vocational skills.

In the words of one Kenyan business owner, “We can easily find people with even tertiary education to drive trucks, but it is impossible to find anyone with even a few years of practical accounting experience.”

Apprenticeship models have proven to be particularly effective in other countries, and they could be in Africa as well. A focus on soft skills, such as teamwork, communication, and problem solving, is also important, as experience from South Africa has shown.

The Harambee programme in South Africa is an example of a vocational initiative that combines many of these characteristics. Harambee works closely with employers to take unemployed youths through a bridging programme that equips them with the specific soft and hard skills for pre-identified jobs (six months to one year in most cases). In its first year in 2011, the programme achieved a 90% placement rate of participants.

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