The global crisis and employment in Africa

Shanta DevarajanWorld Bank

http://AfricaCan.worldbank.org

2

In the developing world, richer countries experience comparatively higher unemployment rates

0.2

.4.6

.81

Une

mpl

oym

ent R

ate

0 5000 10000 15000GDP per Capita (2000 International PPP Dollars)

Unemploymet is measured as those not employed over the total working age population

Panel 1980-2004Unemployment and GDP per Capita

Source: ADI 2008/09

3

Country Rural Urban AllBurundi 0.6 16.6 1.5Burkina Faso 4 32 9.5Cote d'Ivoire 1.8 15.5 7.9Cameroon 2.9 17.8 8.7Ethiopia 3.5 16.2 5.3Ghana 29.7 41.1 34.4Guinea 2.6 15.3 7.1Gambia 1.5 10 5.1Madagascar 1.1 2.7 1.4Mozambique 7.9 22.1 11.2Mauritania 20.5 33.3 26Malawi 3.9 4.8 4Nigeria 3.1 5.4 4Sierra Leone 22.3 42.2 30.9Sao Tome and Principe 11.5 9.5 10.4Uganda 0.9 4.8 1.6Zambia 6.3 24.2 12.9Africa-15 7.3 18.5 10.7

Unemployment rate – male, rural and urban areas

4

During economic cycles

13.6 13.7

17.7

25.1

19.7

39.1

0

5

10

15

20

25

30

35

40

45

During all times During growth acceleration During economic collapse

Male

Female

Contributing family workers (% of employed)

5

48

56.7

29.5

37.2

46.8

10.1

0

10

20

30

40

50

60

During all times During growth acceleration During economic collapse

Male

Female

Wage and salaried workers (% of total employed)

6

Recent growth has not been accompanied by job creation

0.82

0.53

00.10.20.30.40.50.60.70.80.9

1995-99 1999-03

Employment elasticity of growth (Kapsos 2005)

7

A fiscal stimulus for Africa? Needs to be externally financed With external financing, additional spending

Need not be in sector that is worst hit by the crisis (e.g., primary commodity exporting sectors)

Could be in sectors that generate jobs in the short run, but leave the economy more productive in the medium run E.g., infrastructure maintenance

Policies to stimulate employment and competitiveness (investment climate, agricultural investment, SME finance)

Safety nets only if well-targeted