缅北禁地

African leaders are expressing a renewed sense of urgency to tackle youth unemployment on the continent and are beginning to develop and implement plans to create jobs. 鈥淚n Africa, the problem of youth unemployment is more complex than in some other parts of the world,鈥� says Kenyan President Mwai Kibaki. 鈥淪low-growing economies are unable to generate enough job opportunities to absorb the large number of young people qualifying from institutions of learning every year,鈥� he told delegates at a Youth Employment Summit (YES) in Nairobi, Kenya, in September.

A young woman professionally trained as an auto mechanic in Kenya: Creating jobs for women poses particular challenges.

Photograph: Panos / Sven Torfinn

鈥淭he evidence stares us in the face on the streets of our major cities,鈥� says Ms. Ngozi Okonjo-Iweala, who until recently was Nigeria鈥檚 finance minister. 鈥淵oung men and women [are] roaming the streets with little to do, operating motorcycle taxis . . . and in some cases engaging in criminal activities.鈥�

Reducing the world鈥檚 rate of youth unemployment by half could add $2,200 bn 鈥� $3,500 bn to the global economy, estimates the International Labour Organization (ILO). About 20 per cent of that gain would go to sub-Saharan Africa.

The Nairobi summit was organized by the YES Campaign, a network of nonprofit organizations operating in 60 countries around the world. It brought together about 2,000 young people, leaders from more than 120 countries and representatives of donor agencies to develop solutions.

President Kibaki says it is critical for African countries to come up with specific plans that target youth. Most employment policies fail to take into account the particular needs of young people or the fact that creating employment for women often poses its own challenges. There is a realization in many countries that youth, both male and female, are at a disadvantage on the job market. Even if they have had some schooling, many lack skills and job experience. Those who want to set up their own businesses do not have money. In many companies, last-in, first-out hiring policies mean that young people are the first to lose their jobs when a company is in distress.

African governments need capacity and good policies to stimulate job creation.

Photograph: ILO / J. Maillard

Time for action

Young people (between 15 and 24 years old) made up 63 per cent of the jobless in sub-Saharan Africa in 2003, even though they constituted just 33 per cent of the labour market. Reported unemployment in Africa averages 10 per cent, but unofficially the figures are much higher, with some countries experiencing unemployment rates of more than 40 per cent. In Botswana, 43 per cent of young people were officially unemployed in 1998, compared with 13 per cent of adults. In Zambia, recent estimates had 30 per cent of adults as jobless, compared with 60 per cent of youths. Although the 缅北禁地defines 鈥測outh鈥� as those between 15 and 24 years, in some countries the definition includes those who are as old as 35.

A complex mix of factors contributes to Africa鈥檚 unemployment figures. It includes stagnant or sluggish economies that are not growing fast enough to produce jobs for a growing population. Development experts say that Africa鈥檚 economy needs to grow by 7 per cent annually in order to cut in half by 2015 the percentage of people living in poverty, a target agreed upon by the international community. Because many countries have weak industries, manufacturing cannot absorb large numbers of the unemployed. Low rates of literacy and educational systems that do not equip young people with the skills required on the job market also fuel unemployment.

A number of long-term national policy options to deal with unemployment have so far been proposed 鈥� with limited results. In September 2004, African leaders decided to adopt a continental strategy, known as the Ouagadougou Plan of Action. Endorsed at an African Union (AU) summit on employment in Burkina Faso, the plan calls on countries to diversify their economies into labour-intensive industries, adopt laws that attract investors and create opportunities for women and young workers.

鈥淭he Plan of Action is a fine blueprint,鈥� says 缅北禁地Economic Commission for Africa (ECA) Executive Secretary Abdoulie Janneh. 鈥淏ut we must go beyond the planning stage,鈥� he told the annual conference of African ministers of finance, economic planning and development in Burkina Faso in May 2006. 鈥淢ore than ever, it is up to us to act on our words, embedding the Plan of Action into national development programmes.鈥�

The AU reports that since 2004 progress has been made in some countries. 鈥淭he Ouagadougou Summit led to the setting in motion of a number of activities in various countries,鈥� says AU Commissioner for Economic Affairs Maxwell Mkwezalamba. For instance, Malian President Amadou Toumani Tour茅 has declared youth employment his first national priority, Ghana has set aside $110 mn in its 2006 budget for a National Youth Employment Programme and, with World Bank assistance, Ethiopia is designing labour market policies to make job creation a core element. Mr. Mkwezalamba reports that Chad and Madagascar, among other countries, have prepared national employment plans, while Tanzanian President Jakaya Kikwete has directed the labour ministry to identify sectors that could potentially hasten the creation of more than a million jobs annually.

Job plans

However, most countries have not yet incorporated job creation plans into their national development frameworks. The national strategies include anti-poverty programmes, commonly based on Poverty Reduction Strategy Papers (PRSPs). These are documents developed with assistance from the World Bank and the International Monetary Fund (IMF) to set national priorities, direct spending of debt-relief funds and coordinate donor programmes.

鈥淚n view of their centrality in the development of low-income countries, PRSPs could be a major instrument for promoting youth employment,鈥� comments Mr. Makha Dado Sarr, a former deputy executive secretary of ECA. 鈥淧RSPs have become major development programmes of the countries concerned, since they presently constitute the basis of the assistance provided by international financial institutions鈥� and by most other multinational and bilateral development partners.

The ECA and AU are leading a drive to encourage African countries to incorporate job plans into their PRSPs. As part of this effort, ECA convened a PRSP review conference in Cairo, Egypt, in March 2006. Participants examined 21 poverty reduction strategies and found that two-thirds now contain basic job-creation measures, a significant improvement over the first generation of PRSPs, which barely covered employment issues. Some of these measures include plans to widen access to education, training and credit and to build infrastructure and attract investors. But, judged the ECA, none of the 21 PRSPs 鈥渟ubstantially and explicitly confronted employment issues and challenges.鈥�

Broadening consultation

At the PRSP review in Cairo, Tanzania鈥檚 anti-poverty programme was commended for containing some measurable goals, specific targets and time periods by which job plans would be carried out. The World Bank had approved Tanzania鈥檚 first PRSP in 2000. That one reflected little input from employers and workers, despite a general requirement that the preparation of the documents involve domestic stakeholders. But by the time Tanzania produced its second strategy in 2005, the labour ministry, with assistance from the ILO, had incorporated suggestions from the national employers鈥� association and the trade unions.

鈥淚n part, the weakness of the employment policy dimension of PRSPs probably reflects the relative absence of labour ministries and their social partners from the consultation processes for the drafting of the first papers,鈥� noted the ILO. Larger questions, such as how to translate economic growth into jobs, are yet to be fully integrated into poverty reduction strategies, but 鈥渢his is likely to change as PRSPs evolve.鈥�

Tanzania鈥檚 current PRSP requires the government to promote business-friendly policies, provide flexible loans to support poor women in setting up businesses and encourage small and micro-enterprises. But, as with the other PRSPs under review, Tanzania鈥檚 strategy does not address youth unemployment as a specific challenge requiring special attention. By grouping youth together with all other job seekers, such plans overlook young people鈥檚 particular economic and social needs.

鈥楤ad policy鈥�

Since the mid-1990s, economic performance has improved significantly in many African countries, with average annual growth in gross domestic product (GDP) rising steadily from less than 3 per cent in 1998 to 5 per cent in 2005. In theory, according to many economists, this should have led to higher employment.

However, notes Ms. Okonjo-Iweala, the former Nigerian finance minister, 鈥淚n most of our countries, economic growth is not resulting in significant job creation and therefore in poverty reduction.鈥�

This lack of job opportunities contributes to many social problems. Without alternatives, many young women and girls are forced into sex work. Studies show that young jobless people living on the street are more likely than their employed counterparts to abuse illicit substances or join armed groups.

鈥淛obless growth isn鈥檛 just bad social policy, it is bad economics,鈥� says ILO Director-General Juan Somavia. 鈥淚t results in less consumption, more migration, more child labour and lower aggregate demand.鈥� Those maladies in turn lead to reduced investments, less funding for pensions, lower tax revenue and other resources for social policies, and ultimately more poverty.

Diversification

The Youth Employment Network, an alliance of countries initiated by 缅北禁地Secretary-General Kofi Annan in collaboration with the heads of the ILO and World Bank, recommends that governments diversify their economies and promote sectors that use a lot of workers. Many African economies still rely on the production of one or two primary commodities. They could diversify into processing these commodities or producing light manufactures, as Mauritius has successfully done.

Over two decades, Mauritius has averaged 6 per cent annual economic growth, resulting in a fourfold increase in per capita income and virtually eliminating unemployment. The government attracted investors to the country鈥檚 principal exports, sugar and garments. It also furthered diversification by promoting export processing zones (EPZs), which featured incentives for investors but also allowed workers to form and join unions (unlike in the EPZs of some other countries).

Between 1983 and 1986, employment in Mauritius鈥檚 EPZs tripled and by 1985 the EPZ sector had overtaken sugar as the prime source of exports, foreign exchange earnings and employment. Today Mauritius is no longer able to compete so effectively with other textile producers, such as China. So it is restructuring its economy, moving into other sectors such as financial services, light engineering goods, precision plastics and computer products.

Education and training

鈥淚t is clear that to rise out of poverty, the people of our continent need jobs and education,鈥� says ECA Executive Secretary Janneh. 鈥淣ot just any job, but one that provides a decent wage and employment conditions.鈥� According to the Addis Ababa-based ECA, it is crucial for countries to expand training, lifelong learning, education and other means of improving skills, with a particular focus on young people.

As a start, many countries need to rebuild a formal education system that declined rapidly during the last few decades from the effect of cost-cutting measures adopted at the urging of the World Bank and IMF, notes an ILO study led by University of Zambia lecturer Francis Chigunta. These austerity policies, known as 鈥渟tructural adjustment,鈥� led to deep cuts in public spending, including for food, health and education. Many schools were obliged to introduce fees, contributing to a decline in attendance by students from poor families.

Many countries are now trying to boost school enrolment rates, with some success. The special emphasis on getting more girls into school should ultimately improve the employability of young women in Africa. However, an estimated 45 million children aged between 6 and 11 still do not attend school in Africa.

Other studies highlight shortcomings in the focus of many educational systems in Africa, which concentrate on educating students for often nonexistent formal white-collar jobs, rather than for technical or factory-type work, which may be available.

To increase the employability of the 1 million young school-leavers entering the job market annually without appropriate skills, the Egyptian government in 1991 began to provide technical and vocational training to secondary school students. Over a three-year period, students spend two days a week at school and four days a week in training in a business. More than 1,600 companies are involved in the programme, which has so far reached more than 15,000 students. Graduates often find immediate employment or set up their own small enterprises.

Entrepreneurship

Another focus of action has been on spreading entrepreneurship skills beyond the schools. A number of countries have introduced entrepreneurship training programmes, including Gambia, Kenya, Malawi, Nigeria, Swaziland and Zimbabwe. Policymakers believe that the promotion of small-business enterprises and the informal sector offer quick solutions to joblessness.

In Nigeria, which has more than 10 million small-business owners, the government supports new entrepreneurs through a network of about 20 industrial development centres that train youth, help them turn their ideas into feasible business ventures and supply them with credit.

But many of these programmes are not easily accessible to women, notes Ms. Christiana Okojie of the University of Benin, Nigeria. 鈥淪tudies have shown that women tend to benefit less 鈥� as they are crowded out by men,鈥� she reports. Women are at the back of the job queue, since they generally have lower levels of education, due in part to cultural and other biases against the training of girls. Ms. Okojie argues that governments should put in place deliberate affirmative action policies for poor, rural women and should establish training programmes in sectors that employ many women, such as trading and agricultural processing.

Responding to the need for gender-specific programmes, women lawyers, bankers, entrepreneurs and trainers set up the Kenya Women Finance Trust in 1981. It is the only micro-finance institution in the country exclusively for women, and it has more than 100,000 members. It grants cheap credit to low-income earners to start small businesses.

Public works

In many countries, immediate, short-term solutions are needed to quickly ease the burden of unemployment. Public works programmes are a popular option. South Africa, which commits more than $800 mn to public works, has one of the best programmes on the continent, reports the ILO. In terms of technical design standards and the quality of completed physical infrastructure, the country鈥檚 public works programme 鈥渨as regarded as surpassing anything that the ILO members of an evaluation team had encountered in more than 30 developing countries in Africa, Asia and the Pacific,鈥� notes the ILO.

The Community Based Public Works Programme, designed to provide rapid and visible relief to the poor, helped create 130,000 jobs between 1998 and 2004. In the latter year, the government launched the Enhanced Public Works Programme, with a goal of creating a million jobs over five years. The programme employs unskilled and semi-skilled people to build schools, hospitals and roads, giving them short-term incomes and, hopefully, long-term skills.

鈥淧ublic works are popular with politicians as they offer the opportunity for a government to claim to be 鈥榗reating jobs鈥� in a far more direct and observable way than through the opaque medium of long-term processes which deliver genuine economic growth and employment,鈥� comments South African economist Anna McCord.

But in a context of chronic poverty, which is neither cyclical nor temporary, public works programmes will not have a significant or sustained impact, she adds. This is because the jobs offered are short-term 鈥� lasting only about 4 months 鈥� and the wages are low. Even if South Africa鈥檚 programme were to create the envisaged 200,000 jobs annually, that would benefit only a small fraction of the country鈥檚 poor and unemployed. Out of a population of 45 million, 24 million live below the poverty line.

Policy reforms

鈥淔or successful poverty reduction, African countries have to be in the driver鈥檚 seat,鈥� says World Bank Africa Region Vice-President Gobind Nankani. 鈥淎fricans know best where the shoe pinches. They should craft their own poverty-reduction strategies based on national realities.鈥�

But many countries in Africa are hampered by the inability of the state to deliver social services. Development policies followed in many African countries during the 1980s emphasized macroeconomic prudence, which translated into a reduction in the size and role of the public sector. In Zimbabwe for example, the cabinet in 1995 ordered all ministries to cut staff by 40 per cent, in line with the conditions of a World Bank loan. Weakened by similar cutbacks, labour ministries in many African countries found themselves with no capacity to plan or direct employment-generation programmes.

There is now a growing realization among African policymakers and their external development partners that the state needs to be rebuilt so that it can play an active role in development.

Mr. Nankani notes that African governments could benefit from directing investment into rural areas. Two-thirds of Africa鈥檚 population lives in the countryside and poverty is predominantly a rural phenomenon. The rural poor work in small-scale, subsistence farming and non-farm activities such as agro-processing. Governments could therefore promote policies that increase agricultural productivity and growth. These may include policies to raise the quality of labour, through training, and to improve the productivity of land. Rural industrialization programmes could create jobs in particularly disadvantaged communities.

Business-friendly

In the short term, countries need to do away with policies that hinder investment, notes the World Bank in its report Doing Business in 2006: Creating Jobs. African countries impose the most stringent regulations on entrepreneurs, the Bank reports. In Mozambique an investor typically must go through 14 separate procedures over an average of 153 days in order to register a business, while in Sierra Leone a company may have to spend 164 per cent of its gross profits to pay all its business taxes.

The report ranks 155 countries according to how they have reformed their policies to attract investors. Exemplary reformers on the continent include Rwanda, which has reformed its courts and customs procedures. The report praises Mozambique for cutting the property transfer tax from 10 to 2.4 per cent of the property value, the largest such reduction in the world.

African countries need to put their houses in order, says Mr. Nankani. Economic growth and job creation will remain elusive in countries where public policy 鈥渃hokes private enterprise and discourages business activities.鈥�