Eleven million youth are expected to enter Africa’s labor market every year for the next decade.
Despite rapid growth in formal wage sector jobs, the majority of these youth are likely to work on family farms and in household enterprises, often with very low incomes.
To boost young people’s earnings, governments need to hasten overall business climate reforms, strengthen basic education, and make land, infrastructure, training and financing more accessible.
WASHINGTON, January 27, 2014—Raising earning potential among Africa’s growing youth population is a major priority for the region that will require strong action on multiple fronts, according to a new World Bank report, Youth Employment in Sub-Saharan Africa.
With youth now making up the largest share of the population in most African countries, it is more urgent than ever to pave the way for more productive job opportunities, the report notes. This is true regardless of the type of work that young people will do—in the fast-growing modern wage sector, in household enterprises, or on millions of small family-run farms.
With the right combination of policies in place, Africa’s position as the “youngest” region in the world—in contrast to most other regions where populations are rapidly aging—could lead to greater prosperity at the household level, and major economic gains for African countries.
Young people are trying to find more productive work
“All young people need to have acquired basic literacy and numeracy, without which their earning potential remains low,” said Deon Filmer, one of the authors of the report and Lead Economist in the World Bank’s Development Research Group and Africa Region. “They also need to be able to access land, financing, and training, all of which play an important role in improving their prospects.”
In a short video on the youth employment challenge in Africa, young men and women in Ethiopia, Kenya, and Niger explain the challenges they face when seeking work, what they need to be able to prosper further, and what they aspire to going forward.
“Once I completed school, I was compelled to start farming to feed my family—my siblings and parents,” said Felix Roa, who lives near Malindi in coastal Kenya, and is growing an acre of maize, while also running a small store selling just a few essential items.
Although Felix would like to expand his business or find a job in a city, he has not yet done so, partly because he lacks the right qualifications. “Leaving to find work would not be easy because there are already those in the city competing for the same jobs,” he said.
Most young people will seek work in the informal sector
While the formal sector—with its larger firms and structured wage jobs—will eventually become Africa’s biggest employer, the majority of people in African countries—nearly 80 percent—work in the informal sector as Felix does, often for very low earnings. This sector will continue to employ the majority of young people.
“The informal sector has been historically neglected,” said Louise Fox, co-author of the report, former World Bank Lead Economist and currently Visiting Professor at the University of California at Berkeley. “Young people, including in rural and semi-urban areas, tend to seize opportunities when they can. The report argues that scaling up support to access those opportunities is essential.”
Youth face multiple obstacles in finding pathways to higher earnings. For example, the Northern Uganda Social Action Fund has shown that youth who received cash to pay for training and to acquire assets needed to run a business—relieving both skills and financing constraints—earned 41 percent more than those who did not receive the grants.
In both Liberia and Uganda, training adolescent girls in both behavioral and technical skills resulted in increasing employment while also shaping life skills and reducing risky behavior. In Uganda, employment among trained girls rose by 32 percent.
Young people from poor households can also benefit enormously from social safety nets, in the form of regular transfers of cash from governments to the most vulnerable families, or opportunities to earn income from public works programs.
These programs enable families to keep children in school and ensure that they can buy enough food for everyone, regardless of drought or sudden losses of income. This safeguards their health and education foundations. Safety net programs can also target the poorest youth with interventions such as skills training, as is currently being done in Nigeria with public works.
Youth employment is not a one-dimensional challenge
As the report explains, youth employment is not a simple or one-dimensional challenge, and African governments will need to act in many ways to address it holistically.
Government policies will need to help build human capital and improve the business environment, so that the private sector can seize opportunities that arise from inevitable changes in the competitiveness of other regions. The report emphasizes that productivity must increase in agriculture, household enterprises, and the modern wage sector so that all young people can see better prospects ahead.
Working towards these goals is closely related to more inclusive economic growth—as African economies reduce their reliance on extractive industries and look towards other sectors that have greater potential to employ large numbers of people—and is aligned with the World Bank’s twin goals of eliminating extreme poverty and achieving shared prosperity.