Africa needs formal jobs to avert job crisis

(Reuters) In the largest Sub Saharan economies of Nigeria and South Africa, unemployment especially among the youth remains a major concern.


According to the IMF, the region could be heading for a jobs crisis unless the economies can create jobs for their burgeoning, young population.

By 2035, sub-Saharan Africa will have more working-age people than the rest of the world’s regions combined and this growing workforce will have to be met with jobs. This would have major implications for the region’s economy, its security and wider immigration patterns.


While the informal sector has created jobs and added to the regions wealth, many entrepreneurs were doing such jobs out of necessity. Most people would prefer job in the formal sector if they had that option.


Some of the characteristic features of informal employment are lack of protection in the event of non-payment of wages, compulsory overtime or extra shifts, lay-offs without notice or compensation, unsafe working conditions and the absence of social benefits. Women, migrants and other vulnerable groups of workers who are excluded from other opportunities have little choice but to take informal low-quality jobs.




The informal work sector represents entrepreneurship and start-up businesses but does not provide growth opportunity. The informal sector tends to be low productivity work, partly because it attracts lower skilled workers. As per the IMF, in a country where the informal sector is large, the rate of economic growth is reduced.


Countries need to adopt a balanced approach in the design of policies to grow the formal sector. This means focusing on ways to increase the productivity of the informal sector, while working to support the expansion of formal businesses. It also called for improved access to finance to create the right kind of jobs.

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