(CAPITALFMBLOGS) Africa today has two sides. While there has been unexpected economic growth, the continent still has to make extreme efforts towards its Millennium Development Goals (MDGs) for 2015. Poverty needs to be reduced. There is need for creation of jobs in Africa. The structural transformation of African economies is the need of the hour.
True, the MDGs have put African governments on the path to poverty reduction but progress though remains slow. Infant mortality and childbirth deaths remain high.There is progress though. Africa has almost achieved MDG 1- halving the number of people living below $1.25 a day from 1990 to 2015.
A major problem is lack of suitable vacancies in Africa and opportunity for the educated to make careers in Africa. African governments and the private sector need to be prepared to absorb the growing working age youth population. The continents population is estimated to double in 40 years. In 40 years, Africa will have more working age people than any other country, but will there be enough employment?
How will these jobs get created?
There is need to create productive job vacancies in Africa. Many African counties are on the right path with about 7 percent growth threshold for economic takeoff. But economic growth has not created enough jobs in Africa. So growth is not sufficient. How you grow matters. Growth is more equitable, sustainable, and job-creating when it happens through structural transformation.
Transformation, as we champion it at the African Centre for Economic Transformation (ACET), is growth through making the structural shifts from farming to manufacturing and services, through expanding the technical capabilities of people and institutions, through upgrading the technologies that people use on farms, in firms, and in government offices, growth through becoming internationally competitive and latching onto global chains. All these channels are mutually reinforcing.
Africa needs a transforming economy-more than just a growing economy to create stable, wage-paying jobs in Africa and for real social and economic progress.
What are the three factors whose transformation is critical towards filling Africa’s urgent need to create stable jobs?
- Transformation should begin from farming and its modernization – most African economies are based on Agriculture and most of the extremely poor rely on it for subsistence. Modernisation will mean higher productivity, increased income and more jobs in Africa across the value chain, in manufacturing and services, particularly through agro processing.
- Second, develop market relevant skills. While millions of university graduates struggle to find vacancies in Africa, companies struggle to search for the candidate with the right skills.The result is that such jobs go to expatriates or are never created for want of skills. There should be renewed focus on technical and vocational education and training (TVET) for students and public campaigns to raise awareness about the importance of TVET.
- Third, invest in infrastructure. Good infrastructure means steadier manufacturing to more reliable services, especially those in export-oriented industries. Infrastructure investments also create construction jobs in Africa.
Several key interventions drive transformation, but these three are critical towards filling Africa’s urgent need to create stable jobs.
Transformation is difficult work and it takes time. As 90 percent of jobs are created by the private sector, African leaders need to encourage the private sector to invest in these areas to create jobs, to build skills and to build infrastructure.
The time to positively tackle the urgency of creating jobs in Africa is now.