African economic outlook makes a case for accelerating youth employment

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African Economic Outlook makes a case for accelerating youth employment

ECA Press Release 148/2012

Addis Ababa, 13 September 2012 (ECA) – Africa could take advantage of its expanding youth population to sustain and accelerate the economic and social development of the continent, says the 2012 edition of the African Economic Outlook launched today in Addis Ababa.

The report however, warns that high unemployment among youth pose a serious challenge for the economies of African countries, whose recovery from the 2011 global economic and financial crisis had been remarkable, according to the ECA’s Information and Communication Service.

In opening remarks at the launch which was attended by senior officials, Prof Emmanuel Nnadozie, Director of ECA’s Economic Development and NEPAD Division, unpacked the report and praised the spirit of collaboration which reigns among the four partner institutions which wrote the report.

These are the UN Economic Commission for Africa, the African Development Bank, the UN Development Programme and the Organisation for Economic Cooperation and Development.

He said that the theme of the 2012 report is both timely and significant in that it underscores the joint efforts of the four institutions to “help African countries identify opportunities and address challenges in order to maximize benefits from the emerging demographic dividend on the continent”.

The Report argues that youth unemployment figures will increase unless Africa moves swiftly to make youth employment a priority, turning its human capital into economic opportunity. It also advocates for policies that focus on creating the right skills necessary for youths to compete in the job market and support entrepreneurship.

The report provides country-by-country analysis and policy recommendations on the promotion of youth employment and warns of looming domestic and external risks posed by the continued economic crisis in the Eurozone area.

This crisis threatens to constrain growth by lowering the demand for Africa’s exports, reduce tourism earnings and financial flows from foreign direct investment, Official Development Assistance and remittances, according to the report.

Nnadozie observes that challenges facing youth employment often vary across African countries and different income groups, he added, stressing the fact that in low-income countries, “youth in vulnerable employment and working poverty are the largest majority”, while “discouraged or inactive youth” are the most common group in middle-income countries.

He said the reports contains a series of policy recommendations, especially one which suggests that schools and training centres in Africa should provide youth with more on-job training opportunities, among other general and country-specific policy recommendations.

Also speaking at the launch Mr. Lamin Barrow, Resident Representative of the African Development Bank praised the strong collaboration between the four institutions. It is thanks to this collaboration that they could produce this report which is a “good source of valuable analysis and perspectives on fostering inclusive growth and promoting youth employment”.

He said he was delighted to note that despite all the odds, Africa’s rate of growth has outperformed the global average over the last decade, although “high growth is not sufficient to guarantee productive employment for all” he stressed.

He also warned that “in the absence of a political process allowing them to express their views and shape policy, instability can result as it did almost two years ago in a number of North African countries”.

He said that political strife in some countries also has the potential to spillover into neighboring countries while vulnerability to severe weather can affect agricultural production and food security, particularly in the Sahel zone.

Barrow described the new report as a clarion call for Africa to “reset the policy agenda in towards promoting inclusive, employment-creating and sustainable growth strategies aimed particularly at addressing the special needs of the young”.

Given the small size of the formal sector in many African countries, the African Economic Outlook advocates that Governments pay special attention to the informal sector and rural areas as well.

“These have pools of labor and entrepreneurial talent and could serve as potential engines for inclusive growth since they can absorb higher numbers of unemployed youths”, Lamin suggested.

Also addressing participants at the launch, the UNDP Country Director for Ethiopia, Ms Alessandra Tisot, called the report “a reminder to African governments and policy makers to focus on removing obstacles to the many informal groups and support them to grow and create decent jobs”.

She identified challenges which need to be addressed and said they relate to “strengthening the link with different industries in the job market and providing practical skills, access to credit, microfinance easy access to information and technology to enhance employability”`.

She described the youth as “that domestic, national wealth to be tapped, provided we look at them as the vital sources for that equitable inclusive growth which brings stability, and productive sustainable growth”.

With almost 200 million people between the ages of 15 and 24, Africa has the youngest population in the world. And it keeps growing rapidly! According to recent estimates, the number of young people in Africa will double by 2045. If this trend continues, the continent’s labor force will reach 1 billion by 2040, making it the largest in the world.

Africa’s youth population is not only growing rapidly, it is also getting better educated. Based on current trends, about 59% of 20- 24 year olds will have had secondary education in 2030, compared to 42% today.

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This will translate into 137 million people in this cohort/group with secondary education and 12 million with tertiary education in 2030. With the number of youth in Africa set to double by 2045, creating productive jobs for young people will continue to pose an immense challenge, according to reports.

Prof. Nnadozie said he was confident that analyses and policy recommendations contained in the report would be useful to a wide range of users including member States and national policy makers, international donors, development community, researchers, civil society and journalists.

The first jointly prepared edition of AEO (2008) focused on the theme of technical skills development in Africa; the 2nd edition (2009) was on innovation and information and communication technology in Africa; the 3rd edition (2010) was on public resource mobilization and aid; and the 4th edition (2011) on Africa and its Emerging Partners.

The coverage of the African Economic Outlook increased from 22 countries in 2002 to 47 countries in 2009; and 53 countries in 2012, covering all African countries except Somalia.