The Clock is Ticking on Sub-Saharan Africa’s Urgent Job Creation Challenge
IMF Blog, November 12, 2024
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- Authors: Athene Laws, Faten Saliba, Can Sever, Luc Tucker
- Published: November 12, 2024
Scale and urgency of the challenge
- By 2030, half of all new entrants into the global labor force will come from sub-Saharan Africa, requiring the creation of up to 15 million new jobs annually.
- Fragile, conflict-affected, and low-income economies account for nearly 80 percent of the region’s annual job creation needs but have struggled the most to create jobs.
- Example: Niger has a population of 26 million people and a youth population share that is not expected to peak until 2058—the country will need to create 650,000 new jobs annually for the next 30 years.
- Many middle-income countries such as Botswana, Ghana, Namibia, and Mauritius have seen their youth shares of populations peak already and will face less severe job creation pressures.
Objectives for employment outcomes
- Generate vast numbers of productive, quality jobs that provide above-subsistence-level income, in both formal roles and self-employment.
- Ensure youth—especially young women who face additional barriers—can enter and succeed in the labor market.
Three main challenges (and policy directions)
1. Shifting informal jobs from a trap to a stepping-stone
- Boost productivity in the informal sector through well matched skills training.
- Improve access to finance for informal entrepreneurs.
- Design policies that encourage transitioning to formal employment.
- Create labor market programs targeting young people and women.
2. Creating conditions conducive to jobs growth in high-productivity sectors (modern services and manufacturing)
- Prioritize measures that benefit multiple sectors given limited public finances (for example, improving market competition and making value-for-money infrastructure investments).
- Exercise caution with sector-targeted industrial policies because they can be expensive, distortionary, and pose corruption risks.
3. Breaking down barriers to private business growth
- Prioritize infrastructure: electricity, internet, roads, and affordable public transport.
- Cut red tape and curb corruption to help companies grow.
- Attract more foreign direct investment and develop local capital markets to increase financing availability.
- Strengthen regional integration and trade to expand markets.
Broader implications and recommended focus
- Robust jobs growth in sub-Saharan Africa would provide an engine of growth, consumption, and investment for the global economy.
- Failure to create sufficient jobs could exacerbate poverty, fuel instability, and drive migration.
- Policymakers should strive for meaningful, targeted reforms that open a path for millions toward sustainable employment and shared prosperity.
Based on an analytical note included in the October 2024 Regional Economic Outlook for Sub-Saharan Africa, "The Clock is Ticking on Sub-Saharan Africa’s Urgent Job Creation Challenge," and the Analytical Corner presentation by Athene Laws and Faten Saliba during the October 2024 Annual Meetings.