The African Economic Outlook 2012 focusing on Youth Employment - YPARD Brief

I was invited by GYIN (Global Youth Innovation Network) to attend - on behalf of YPARD - the presentation of the African Economic Outlook 2012 focusing on Youth Employment, at IFAD (International Fund for Agricultural Development), on Friday 8 June.

The presentation included a short macro-economic overview and a discussion on youth employment enhancement.

Let me emphasize here the key aspects discussed, related to youth, agriculture and employment. You can find more information on how YPARD addresses these issues on:  Youth unemployment in Africa – enhancing appropriate skills and job creation!

Brief key points about the African Economic situation

In the past 9 years, Africa includes six out of the ten fastest growing economies. Even though Africa – globally - demonstrates economic growth, it doesn’t ensure productive employment.

Agriculture is a key sector among the drivers of growth, particularly among internal growth sectors and by generating the highest prices of exports - coffee and cocoa generated the highest prices, with some decreases last year.

The report concludes on some persistent development challenges, among which are:

• Promoting private sector
• Improving human development
• Improving economic and political governance
• Mobilizing domestic resources
• Enhancing Youth Employment

Why is it important to focus on Youth issues? 

• Youth is a big share of the population ( 200 million people aged between 15 and 24 in Africa;  we estimate it to be double in 2045)
• The highest youth population is in Africa and it is growing fast. Africa is expected  to be the largest continental labour force in 2040
• Youth is strongly touched by unemployment
• Youth can be better educated. The main issue being the need of specific skills and experience required by the working market.
• Youth are the ones to be first affected by crisis. In the actual context, we need to anticipate future crisis by focusing on the most vulnerable: the youth.

The GDP and youth employment are increasing, however youth population is also growing, and proportionally faster. Finding a job is therefore still a strong issue.

Employment situation of young Africans

The term “unemployment” doesn’t describe all the existing scenarios of difficult professional situations that youth have to face. Informal employment leading to low productivity and pay, and also underemployment, are affecting a “YP- friendly” labour market.

Youth employment issues are therefore to be observed as a problem of quality and quantity. This also has consequences on productive potential and employment opportunities and could lead to increased violence among the youth. 

Some employed youth are more food-insecure than unemployed people. This observation was raised from the audience:  Causality between unemployment and food security is still questionable. Additionally, how this will link to poverty reduction and MDG reduction is still an unanswered question. (Steven Schorberger).

Young Women are also particularly vulnerable as they tend to leave school earlier .

A need of decent employment opportunities is necessary. It has been observed in the audience that the precarious situation of youth is a global issue: we see more and more the same challenges in Europe and North America.

What can be done to promote youth employment?

A number of hypotheses were made to explore reasons of bad labour market situation. It may be that:

• The Labour market rules are too strict?
• There is not enough economic activity?
• There is not good repartition of opportunities?

Answer from the research:

1. There are not enough jobs. Job creation needs to be boosted (89% of the response through the research (survey in 37 countries))
2. There are skill mismatches between what is learned through education systems and skills required in the working place. (47% )
3. There is a need of Labour market information (46%)
4. There is an issue related to attitudes employers and youth (40%)
5. Labour market regulations are present a challenge (16%)

Note that I personally don’t know what these concise points involve in detail - It certainly requires to read the outlook.

Lack of jobs

Whose job is it to support the youth? Is this the job of the private or public sector? What policies can the public sector put in place to support youth employment?

The private sector needs to be stronger, with the support of appropriate policies. Job creation has to be generated through micro-enterprises, and in rural areas, where 68% of the youth is.

Large and small enterprises must both be boosted, but must take into account that they are two distinct groups with different needs in term of human resources, infrastructure, regulations etc.  Household enterprises are the fastest growing livelihood sector in low income countries.

Furthermore, it is only when understanding issues faced by youth that policies will be able to support youth employment.

An example for Nigeria was presented. While rural population is growing, there is a decrease in agricultural population. However, 47% of the youth in rural areas works in agriculture. Unfortunately,  rural youth who are non-farmers are better off (Rural farm represents 51% of the food poverty among working youth against 37% rural non-farm and 33%urban).

Recommendations for Job Creation are:

• Improve access to finance by investing in good screening and targeting, and combine funding with training and mentoring
• Provide business with better services
• Change government attitude towards small business and household enterprises
• Provide incentives to hire and train young people, while avoiding displacement
• Offer employment friendly social protection

The audience observed some additional challenges and need for adaptation:

• Labour productivity is low in agriculture
• There is a need of diversification of activities
• There is a tendency of going towards capital agricultural productivity instead of sustainable solutions;
• We need of agricultural processes that respond to environmental challenges.
• Getting pertinent interlocutors within ministries is a challenge in many countries: ministries are often divided as such: “youth and sport”, “agriculture” which leads youth issues to be addressed by none of them.
• GYIN expressed the necessity to influence youth policies. We support this idea and work towards Youth being able to express themselves and influence policy processes for an inclusive, employment-creating, sustainable growth strategy.

Skill mismatches

The report says that many young Africans don’t have the skills expected by employers . For 54% of the job seekers, it is not about not having skills at all – many job seekers do have strong competencies- , it is about having qualifications that match the request from the job market. However, 41% of the job seekers show too little skills. Skills mismatch is particularly a problem in middle income countries.

The study shows that in sub-Saharan Africa universities, 44% of the students are enrolled in social sciences , business and law, against 12% in Science (3% ICT), 4% engineering, manufacturing and construction, 2% in Agriculture, and 38% in other marginal fields.
Youth expectations might additionally not always fit Job market offers.  

Recommendations:
There is a need for longer education, more practical skills, university program that respond to the continent’s needs, better involvement of the different stakeholders to empower technical skills. 

Technological and vocational trainings still play a marginal role.

Education systems could improve through:

• Stronger links between educational systems and the working environment (employment needs)
• Focusing on relevant skills
• Certifying skills acquired in informal training or through practice

The GYIN ambassadors in Senegal and Kenya expressed that Education quality is sometimes an issue but most importantly, there are many examples of very good graduates who received very good education in Africa who find it difficult to get a job. This might be additional evidence of lack of jobs and mismatch of skills acquired through the educational system and the skills required by the working place. The lack of networking has also been highlighted as a main limitation in finding a job.

As a general comment, we must highlight this key challenge mentioned by the audience:  land access is a critical issue, beyond the lack of interest for agriculture.

GYIN ambassador in Kenya also stressed that there are things to do on small scale for great impact.

Speakers: Peter Odienge (The African Development Bank), Federico Bonaglia and Jan Rielaender (OECD Development centre). Discussants: Steven Schonberger (IFAD), Aissatou Padane (GYIN-Senegal Ambassador), Audrey Wabwire (GYIN-Kenya Ambassador)

Read also YPARD's discussion: Youth unemployment in Africa – enhancing appropriate skills and job creation!