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How to Tackle Africa’s Employment Crisis – Economy and Ecology

Africa is facing a serious employment crisis. But if nothing is done to find a solution, things could get much worse in the not-too-distant future, as World Bank projections from 2017 show: By 2035, Africa’s working-age population will grow by 450 million. At the same time, however, only 100 million jobs are to be created in the same period. And that was before the Covid-19 pandemic broke out: Africa was badly hit and its economies shrank 2 percent in 2020. UNECA estimates that nearly 30 million Africans have been pushed below the extreme poverty line.

In the years leading up to the pandemic, particularly between 2016 and 2020, Africa had seen solid economic growth. However, this growth was mainly driven by high raw material prices and has not resulted in sustainable job creation. This is particularly worrying when you look at the demogr -hics of Africa. By 2050, the youth of Africa (15-35 years) is expected to double to 830 million people and the total population of the continent will reach around 2.5 billion people. Today Africa is the youngest continent in the world – in 2020 the average age was 19.7 years. And Africa will remain the youngest continent in the world for decades to come.

In this context, current estimates show that Africa alone needs to create between 10 and 18 million jobs every year in order to accommodate the young people who are crowding into the labor market. However, only about three million formal jobs are currently being created and the majority of African youth will remain in the informal economy, which comprises more than 80 percent of the continent’s workforce.

A progressive  -proach to employment

It is a modern tragedy that millions of young Africans cannot find work, do not have enough resources to support their families or reach their full potential. And while there is a very active and informed international debate about job creation, it does not seem to produce viable solutions that would lead to significant changes in the employment situation.

All too often, governments seem to pay lip service to democratic processes and institutions.

Africa’s employment crisis is so complex that fundamental reflections on the direction of structural change on the continent are required. Do the gradual industrialization  -proaches that worked for East Asia also work in Africa? To what extent is free trade part of the problem and not part of the solution to the employment crisis? How can there be real change when governments are undemocratic, corrupt, and reforms anticipated?

A progressive  -proach to dealing with the employment crisis in Africa that could inspire and inform both African leaders and European policymakers is long overdue. This progressive  -proach is based on two interdependent principles – political and economic. Here are a few ideas.

The political

The political side primarily means creating solid democratic institutions to organize and accompany structural change and economic reforms. All too often, governments seem to pay lip service to democratic processes and institutions. Without accountability enforced by democratic institutions, the will of the people will not be reflected in the development model. Without the corrective function of democracy, development will lead to more inequality and benefit only the privileged few.

Political reforms must also include a courageous stance against corruption. Africans are fed up with governments that are primarily concerned with staying in power in order to sack the state’s resources. State authority must be countered by shifting power from the executive to a politically independent and efficient judiciary that is able to enforce accountability and democratic principles.

Basically, it is the responsibility of the state, which is controlled by democratic institutions and an active civil society, to ensure that economic growth actually creates jobs.

Broad social coalitions, including democratic trade unions, NGOs, activists, environmental groups and progressive politicians, must take the lead here and articulate their demands for a democratic shift towards greater accountability. Women in particular must play a key role in this process, as they are disproportionately affected by the current employment scenario. Together, these groups need to put more pressure on governments to actively involve civil society, academia, workers’ representatives and the private sector in job-building strategies and overseeing the implementation of employment programs. Not only is this an inconvenient exercise, it is a crucial attempt to improve the quality of policy decisions and outcomes.

The economic

The economic principles must be pursued and demanded with the same energy as the political ones. Basically, it is the responsibility of the state, which is controlled by democratic institutions and an active civil society, to ensure that economic growth actually creates jobs.

To do this, revenue mobilization systems need to be improved. Initially, the focus could be placed on the raw materials sector – an important source of income in many African countries. Many export oil, gold, metals and cocoa, but have difficulty negotiating agreements that guarantee a fair share of those exports. More money could be withdrawn from multinationals operating in Africa. In addition, some parts of Africa’s vast informal economy that remain in the informal sector for reasons of tax evasion – like some professionals in the urban economy – could be another source of income. G -s in the tax system must also be closed proactively.

African countries have to invest massively in public goods such as education, health, energy and digitization. Basic infrastructure is key to transforming economies. For example, the construction sector could be one of the areas where significant jobs can be created. In public tenders for large infrastructure projects that are either financed by African countries or international financial institutions, African companies should be given preferential treatment.

Dealing with the employment crisis in Africa is a process that will take years, if not decades.

Significant government investment is required in well-designed public works programs across the continent. These are both a strategy for fighting poverty and for creating jobs. Constant evaluation of public work programs and sensible exit strategies are required to keep costs under control. In addition, states must launch programs to provide bank accounts for all citizens – the transfer of basic income could be an element of direct support.

A project that has lasted for decades

It is an illusion to believe that all employment challenges can only be solved by states. The main source of employment will remain the private sector and most jobs will be created in urban areas, mainly in the service sector. So-called “industries without chimneys”, namely tourism, agriculture, remote office services, creative industries, have a certain potential for job creation. In order to create sustainable and decent jobs in the long term, however, a significant transfer of knowledge and technology from developed countries to African countries is required.

Last but not least, trade between African countries – accelerated by the African Continental Free Trade Area (AfCFTA), which began its activities on January 1, 2021 – could lead to economic growth and employment effects. At the same time, free trade can have a negative impact on immature industries in Africa. That is why industrial nests should be looked after and protected from competition. Areas affected by the potential negative impact of AfCFTA must also be compensated for their losses.

Dealing with the employment crisis in Africa is a process that will take years, if not decades. Small steps are more realistic than skipping fantasies. Too often, however, the political debate is preoccupied with a short-sighted emphasis on how favorable economic factors can promote job creation. But it is important to understand that solid political and economic principles, overseen by the people most affected by the transformation, must go hand in hand – as both determine a progressive  -proach to economic growth and job creation in Africa.

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