That Africa is on the rise, as
measured by GDP, is irrefutable. However, despited nearly two decades of solid
GDP growth, Africa’s economoies are creating too few jobs.
Ethiopia, Kenya and
Tanzania are among Africa’s fastest growing economies, which have been least
successful in converting impressive GDP growth into employment. A recent survey
shows that unemployment among young people aged between 18-35 is over 50 percent.
The International Labor Organization’s (ILO) Global Employment Trends ,which was published in 2014 provides a
basis for re-examining the Africa rising narrative. The ILO report shows that
at 77.4 percent, Africa has the highest rate of vulnerable employment.
Typically these include unpaid family workers; farmers and petty traders.
The kind of growth that has
been witnessed in Africa in the past two decades is often associated with
fundamental structural transformation. This typically includes rising
productivity per capita, attributed to a transition from agriculture to
manufacturing. Africa’s growth story and
structural transformation has defied this classical path.
Manufacturing as a share of
GDP has declined in Africa’s fastest growing economies and the proportion of
workers in manufacturing is woefully low. The fact is that Africa has
de-industrialized. This is dramitacially different from the Asia growth story
where millions of workers have moved from agricultre owing to rapid the
expansion of the manufactureing sector.
What is happening here in
Kenya? A large number of Kenyans are either moving out of rural areas or depend
on off-farm work for their livelihoods. The rate of urbanization is
unprecedented. Cities, medium and small towns and market centres are bursting
at the seams. This trend is unstoppable.
Kenya’s productivity
transformation is characterized by low skilled workers migrating to urban
spaces and getting trapped in low-productivity jobs. Millions of Kenyans,
especially youth, are moving into low productivity and low paying jobs in the
service sector as motorbike taxi riders, petty traders, security guards, unskilled
construction workers, touts, food vendors, domestic servants (e.g., maids,
cooks, drivers), hawkers etc.
The situation is not any
different in Burundi or Rwanda or Uganda or Tanzania. These new urban workers
are often just marginally more productive than smallholder subsistence
farmers. What we see is a vicious low
productivity, low wage-employment trap.
Morever, the average share
of manufacturing as in GDP in most African countries is about 10 percent, unchanged
from the 1970s. The out put per worker in the manufacturing sector in more
countries with more sophisticated manufacturing sector such as South Africa and
Egypt is estimated to be six times larger than for an agricultural worker.
The median age in the East
African Community is estimated as 19 years. About 65 oercent of the population
is below the age of 25. This is especially worrying given that the population
of Burundi, Uganda and Tanzainia will more than double by 2100. Impressive GDP
growth without well-paying jobs for a majority of Africa’s youthful population
must worry politicians and policymakers to death. Kenya and the rest of Africa needs economic transformation,
and it is needed urgently.
The solutions that will be
needed are both long-term and complex in nature. We must begin to undermine the
factors that pre-ordain African children to fail. A majority of African
children fail before they are born because their mothers lack nutritious diets
during pregnancy. African children fail because they are chronically malnourished in the first
1000 days of their lives. This leads invariably to staunting.
A majority of African
children fail because when they show up in school they are both too hungry and
cognitively impaired to learn. Even when they are ready to learn public schools
are under-resourced. Moreover, African children fail because the school has
been turned into a grade factory and fails to enagage their eager and creative
minds.
A majority of African
children fail because we have not invested in skill building, preparing school
leavers at all levels for the world of work. We have failed to invest in
vocational education. Moreover, employers think more than 50 percent of
graduates from our universities are not employable.
A majority of African youth
are trapped in low productivity and low paying jobs because policy makers lack
the imagination to stimulate the manufacturing sector through innovative policy
and financial incentives that integrate infrastructure, agriculture and
services.
Unattended, unemployment
and low productivity could torpedo the Africa rising story. Time is not on our
side.
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