The ability of African economies in sub-Saharan Africa to create enough jobs for a young and growing population rests on the urgent and successful implementation of structural reforms to increase productivity. That’s the key finding in the latest report on Africa’s competitiveness by the World Economic Forum (WEF).
African economies will have to turn around its stagnant competitive levels urgently, if it is to create jobs for an expected 450 million new entrants in the labour market over the next 20 years.
The report warns that only 100 million job opportunities will be created in this time. To improve competitiveness in the short-term, the sector must prioritise specific reforms in labour intensive industries like agricultural and micro businesses, as well as the construction sector. Regional trade must be encouraged and the value chain of sectors where diversification is possible, must be improved.
Removing obstacles which prevents Africa from reaching its competitive potential is the first step in realising more sustainable economic progress and shared growth, says Richard Samans, head of the Managing Board of the WEF.
In 2011, agriculture was still the continent’s biggest employer. While employment in the sector – when compared to growth in other sectors – declined over the last decade, around 100 million Africans still depend on small-scale farming for their survival.
The position on youth employment looks similar.
Around 40% of young Africans work in agriculture, 33% in services and sales, 13% own their own businesses and 8% work in the construction and manufacturing sector.
It is suggested that governments adopt a more dynamic approach to agricultural reforms.
“Many governments still have a classic, but static view of agricultural development, believing the productivity of subsistence farmers must be increased.”
Projects usually focus on the increase of inputs like fertiliser and seed for small farmers, and squeezing even more output from small pieces of land. There are also programmes aimed at helping farmers to access credit and getting better prices for their harvests. But to unlock Africa’s true agricultural potential, these attempts must be reinforced. The report finds that poor performing farms have to be transformed into bigger units, while adding more intensive agricultural processing activities. The packaging and product handling industries must also be developed further.
Adding value to agricultural products through processing, packaging and handling, not only creates jobs for Africa, but is also crucial for the development of the region’s manufacturing sector.