Monday, July 28, 2014

Government is not doing enough to drive job creation


Unemployment among the youth has reached crisis proportions. According to Uganda’s long serving president, Yoweri Museveni, young people in Eastern Africa engage in conflict because of lack of jobs.

Now governments are talking and taking some action. But are governments doing enough?

In Kenya, the government is getting rid of obstructive red tape and making it easy for private sector to set up business. In turn the government expects private sector to “do all it can to “help young people find dignified work”.

Since 2013 the government now requires that 30 percent of all procurement jobs must be awarded to youth, women and people with disabilities. The government also expects the private sector to apply similar rules in their procurement processes. A core principle of Kenya’s national employment policy is that all major investment projects will be analyzed to determine their potential for creating employment, especially for young people.

Furthermore, Kenya has established mechanisms to increase access to capital for the youth. According to the government the Youth Enterprise Development Fund, worth Ksh. 6 billion has reached 20,000 youth and provided training for 200,000 young entrepreneurs. However, the government recognizes that poverty, youth unemployment, and inequality cannot be addressed without the energy and enterprise of the private sector.

And the private sector is right on cue. Under the Kenya Youth Empowerment Project, Kenya Private Sector Alliance (KEPSA) is has provided internship and training for over 11,000 youth between 2010 and 2014. The project has been placing interns, drawn mainly from Nairobi, in energy, finance, ICT, manufacturing and micro and small enterprises. Kenyatta University has signed a deal with 50 companies to offer paid internship for its students. In June Kenyatta University signed a deal with 50 companies to offer paid internships for its students beginning next month. The concept is based on Canadian Co-op Education where students can elect study-work module that contributes toward their college degree.  

Two things to take away from the foregoing: first, the government recognizes that a vibrant private sector is critical to creating well paying jobs, driving national economic growth and prosperity; second, that the private sector is more than ready to work with government to advance policies aimed at creating jobs. But we must ask one question. What role should government play with regard to creating employment?

The private sector is doing the best it can under what can be described as a less than ideal business environment. But the government is not pulling its weight.  

In my view the core business of government is to facilitate innovation and enterprise. This includes providing security to citizens and business, creating a level playing field based on responsive regulatory environment, which spurs flows of human capacity, technology and finance. More importantly, the government must investment in education to develop the requisite human resource capacity to drive the innovation and creativity needed to build a vibrant and competitive private sector.

On the question of human capacity, we must pay attention to the deplorable state of learning in our schools and universities. In 2012 a study by UWEZO, an education advocacy, revealed that more than two out of every three pupils who have completed two years of primary school fail to pass basic tests in English, Swahili or Math. Equally disconcerting is the recent study by Inter-University Council of East Africa and the East Africa Business Council, which revealed that 51 percent of students graduating from our universities are half-baked.

Government must not crowed out private enterprise, and here is one example. Currently, the government spends billions of tax revenue in purchase or lease of vehicles. We spend billions of shillings in maintenance. The cost of keeping thousands of drivers, who are not so well paid, is colossal. But imagine how many high quality jobs could be created in the transport sector if the government outsourced transportation, including vehicles and drivers to the private sector. Moreover, the Youth Enterprise Development Fund should be managed through grants to private sector, to support skill building and transition from school to work programs.

Progressive legislation could also drive employment creation. How about a requirement by law at the county level for local value creation? Most agricultural products, such as bananas, potatoes, beef, poultry and fish are transported to distant urban markets as raw products, denying millions of young people in rural Kenya stable jobs and income. 

Sunday, July 20, 2014

East Africa’s universities are underachieving


Debate about the merits of regional integration often degenerates into harebrained and vain nationalistic preening. But here is what these nationalist bigots must know. On average 56 percent of students graduating from East African universities lack basic and technical skills needed in the job market.

In short, 56 percent of our graduates are half-baked. This sobering finding was revealed in May 2014 in a study conducted by the Inter-University for East Africa (IUCEA) and the East African Business Council (EABC) to establish employers’ perceptions of graduates.

At least 63 percent of graduates from Ugandan universities lack job market skills. In Tanzania 61 percent of graduates were unsuitable for the job market. In Burundi and Rwanda, 55 percent and 52 percent of graduates respectively were perceived to be incompetent. In Kenya, 51 percent of graduates were believed to be unemployable.

About a decade ago I sat in an interview panel to recruit a Geographical Information Systems (GIS) analyst. One candidate stood out. He had graduated with a first class honors degree. His transcript was stupendous. For the panel, he was the candidate to watch. The panel dubbed him the “A” candidate. In the pre-interview rating the position was his to lose.

In just five short minutes it was clear that the “A” candidate would not get the job. He could not speak with clarity. The “A” candidate had no capacity for problem solving, or complex reasoning. The “A” candidate could not analyze a simple practical non-technical problem, which required application of knowledge. But he was at his best when asked to define things. To say that there was a disjunction between the transcripts and the candidate is euphemistic. A majority of students graduating from our universities do not posses higher-order cognitive skills, which college students are widely assumed to have.

For all the public resources we pump into them, East Africa’s colleges and universities accomplish far too little for our children. The trouble is that the universities don’t even think there is a problem. In the IUCEA and EABC study, 82 percent of higher institutions interviewed maintained that graduates were adequately prepared for the job market.

That universities believe they are doing stellar job in preparing graduates for the workplace is hardly surprising. It reflects how out of touch the academy is from society. It reaffirms the need for deep and fundamental reform in the purpose and function of the university in the 21st century.

There is a fundamental problem of limited learning leading to low quality of graduates from our universities, caused by many factors such as quality of high school education, quality the professoriate, relevance of undergraduate curriculum, and the quality of educational facilities in our university, including labs, libraries etc. 
Given the preponderance of rote learning in our high schools most students enter university without high-order critical thinking and complex reasoning skills. Our obsession with high-test scores in national exams prevents teachers and students from focusing on the true mission education: a commitment to a life of the mind and a love of life long learning.

There is evidence that academically rigorous approaches to teaching and learning are associated with enhanced performance on tasks requiring critical thinking, complex reasoning, oral and written communication. Transforming higher education to focus on learning will need changing students’ experience; from the requirements of course work to faculty engagement and feedback. Learning and academic achievement must be the central focus of undergraduate education. Students must be engaged actively in the learning process, through experimentation, application and working in teams. We must demand more from students and professors.

We must develop a culture of accountability in our universities. Without resorting to externally imposed accountability systems universities should be encouraged to develop specific and clear goals for student learning and to collect objective, and verifiable data about how students are achieving their learning goals, across all undergraduate programs. Ideally, the results of such self-assessment should be made available to prospective students and their parents.

A steady path to regional integration demands a modern railway network, reliable energy, robust trade and secure borders. However, a prosperous people-centered region depends, ultimately, on innovators and entrepreneurs who create good jobs and stable incomes, which rely on a sizeable college educated middle class produced by world-class universities. We must reform higher education and provide the necessary incentives to encourage constructive reform in our underachieving universities. 

Monday, July 14, 2014

East Africa can host FIFA World Cup in 2030


The 20th FIFA World, like its predecessors, has left a lasting impression on nations and individuals. The humiliation of the host nation Brazil, Luis Suarez tucking into Italian Chiellini and Germany’s well deserved victory. 

The energy and emotions nations mobilize when they bid to host the tournament is phenomenal. To host the 19th edition of the FIFA World Cup in 2010, South Africa harnessed the magic and star power of Nelson Mandela. This implies there is tremendous value and prestige in hosting soccer’s biggest carnival.

But more importantly, hosting football’s biggest competition pays huge economic dividends. Frequently used estimates have shown that the previous three FIFA World Cup tournaments generated positive economic impact to the tune of $9 billion (Japan and South Korea in 2002), $ 12 billion (Germany in 2006) and $ 5 billion (South Africa in 2010).

Forecasters indicated that this year’s tournament would add about $30 billion to Brazil’s GDP between 2010 and 2014, generating nearly 4 million new jobs and raising an additional $ 8 billion in new tax revenues. The soccer bonanza was expected to bring an additional 3.7 million tourists to Brazil, each expected to spend circa $2,500.
Moreover, the tournament was expected to cause a massive surge in consumer confidence, which leads inevitably to stronger consumer spending. This is especially critical given that in 2011, for the first time in history, Latin America’s middle class outnumbered the regions poor. Perhaps the economic emergence of Latin America in the last decade and the power its middle class is demonstrated by the fact that the average attendance at the 2014 FIFA World Cup matches was the second highest of all time.

A couple of weeks I observed that there was a palpable sense of national frustration and worrying sagging of confidence among Kenyans. We have lost our swagger. We are petrified. Moments of national pride and bravado are hard to come by. A majority of our fellow citizens are just going through the motions in a rather burdensome and dreary existence. We are living in tough and trying times.

But I dared to say that our best days are ahead. Our best days are ahead because this is the land of the unbowed Nobel laureate. Our best days are ahead because a young woman dared to believe that no matter where she was born her dreams are valid. And more recently, a man who started as shelf stocker and shop assistant in Nakuru believes we can host the FIFA World Cup in 2030.

Atul Shah’s dream to bring the World Cup tournament to East Africa in 2030 is both audacious and patriotic. Audacious because most so-called realists think it is outlandish. It is patriotic because Nakumatt Holdings’ boss has refused to give up on this country. He believes that by 2030, we will be a globally competitive prosperous and industrialized middle-income country. Similar national aspirations are shared across the East African Community.

Here is why Mr. Shah’s dream is realizable and merits serious consideration. East Africa’s sustained growth has been made by increased flows of direct foreign investment, improved macroeconomic stability and increased investment in infrastructure and education. The $600 million SEACOM private investment in high-capacity fiber-optic cable now connects southern and eastern Africa to the global Internet backbone, expanding the continent’s connectivity.

Furthermore, East Africa can turn its extractive resource boom into a veritable engine for inclusive economic growth, expanding public investment on social programs while leveraging smart private capital to drive infrastructure growth, agricultural development and the expansion of manufacturing. 

According to the African Development Bank, a strong army of middle income Africans is on the march. They will be on hand to spend money and fill the tournament venues. A study by McKinsey Global Institute in 2012 estimated that 48 percent of Africa’s population will have secondary or tertiary education by 2020. This could drive economic transformation causing more than 50 percent faster growth in jobs in agriculture, manufacturing, retail and hospitality. Moreover, expansion in sectors such as communication, finance, transportation and construction are expected to remain strong.

We must dare to dream. Hosting the FIFA World Cup in East Africa in 2030 is an attainable vision, which has the potential to galvanize the EAC region in unity of purpose; investing collectively in expanding vital regional infrastructure, urban renewal, conservation of biodiversity, tourism, security and education. 

Monday, July 7, 2014

To get agriculture working, empower women and youth



At the African Union Assembly in Maputo in 2003, African heads of state were concerned that 30 percent of Africans were severely undernourished and that the continent was the largest recipient of food aid. And they pledged to act.

In what is now known as the Maputo declaration, African heads of state agreed to allocate at least 10 percent of national budgetary resources to support sound policies for agricultural and rural development.

10 years after the audacious declaration in Maputo, one out of every four Africans still lacks adequate food for a healthy and active life and recent surges in food prices and frequent drought are pushing more people in hunger. In 2012, Africa received 63 percent of global food deliveries, compared to 22 percent for Asia and 4 percent for Latin America and the Caribbean.

The average fertilizer application rate in Sub-Saharan Africa is estimated at 8 kilograms per hectare of cultivated land, compared to 78 kilograms in Latin America, 96 kilograms in East and Southeast Asia and 101 kilograms in South Asia. Between 2000 and 2010, the average grain yield in Africa was about 1-1.5 metric tons per hectare, compared to the global average of 3.2 metric tons per hectare. It is not surprising that while it accounts for 60 percent of the world’s arable land, Africa’s agriculture only generates 10 percent of global agricultural output.

Only seven countries have consistently met the Maputo mandate – Ethiopia, Niger, Mali, Malawi, Burkina Faso, Senegal, and Guinea. The average agricultural budget allocation for Africa is about 5 percent. Such low level of spending fails to meet the needs of the continent’s overwhelmingly small farms. The typical African farmer is a woman with no rights to land, no fertilizer, no improved seeds, no access to reliable water, and no access to veterinary services for her animals.

At the just concluded 23rd Assembly of African heads of state, have yet again, recognized that a significant proportion of Africans remains vulnerable to hunger and malnutrition and called for an absolute transformation of agriculture. The heads of state re-committed to the pursuit of agriculture-led growth as the main strategy to achieve targets on food and nutrition security and shared growth and prosperity. African leaders pledged to uphold the commitment to allocate at least 10 percent of public expenditure to agriculture, and to enhance appropriate policy and institutional conditions to facilitate private investment in agriculture, agribusiness and agro-industries.

In 2024, African another crop of African leaders will be back in Malabo, Equatorial Guinea, to reaffirm and re-commit to transforming Africa’s agriculture. Similarly, the aims of the Comprehensive Africa Agriculture Development (CAADP) remain diffuse and lofty, and it is highly likely that the next decade will be lost. CAADP must move away from an uncritical promotion of the Asian Green Revolution model, and focus on smallholder-led, pro women and youth agricultural investments. We are tied of innocuous declarations and inappropriate models.

Over 70 percent of Africa’s population is engaged in agriculture and their labor yet hard work accounts for less than 10 percent of national GDP. This is unconscionable. Inclusive economic growth and economic transformation will not happen until Africa’s marginalized majorities; women and youth are included and integrated into the formal economy through agriculture.  

Agricultural growth influences growth in other sectors in three ways: production linkages back to supply sectors and forward to agro-processing; consumption linkages due to increased demand; and wage-good effects, whereby decreased food prices lower the real product wage, stimulating investment and profitability in other sectors.

The multiplier effect of agricultural spending ranges from 1.3 to 1.5 in Africa. Studies have shown that agriculture is 3.2 times better at reducing $1-day headcount poverty than non-agricultural sectors. This large multiplier effect is driven by the much larger participation of poor households in growth from agriculture.

Africa’s women and youth are not looking for handouts. Neither are they ready to provide cheap unskilled labor to large agri-business multinationals. They need policies and institutions that support smallholder farm households to take advantage of the rise of the super market and Africa’s expanding urban consumer market. What they need is secure land tenure, appropriate technology, inputs, information, and access to finance services.

Moreover, Africa’s youth and women are yearning to create innovative solutions to support agriculture and agribusiness with information, technology, soil testing, input supply, processing, packaging, logistics, marketing, finance and insurance. 

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