Youth Employment in

Sub-Saharan Africa

The World Bank

March 2014

www.worldbank.org/africa/youthemploymentreport

Presented at PIM Seminar on Youth Employment in Sub-Saharan Africa on February 27, 2014, at IFPRI, Washington, DC

Main Findings

Disenchanted urban youth who want to work in the wage sector are just the tip of the iceberg

The youth employment problem is about pathways to adulthood and productive work in agriculture, household enterprises, as well as the modern wage sector—with priority actions on the human capital as well as the business environment side

The Challenge and Opportunity: Africa in a Young Continent

Sub-Saharan Africa

3

South Asia

-100-80 -60 -40 -20 0 20 40 60 80 100

0-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74

80+

Population in millionsMale 2015 Female 2015

Male 2035 Female 2035

-100-80 -60 -40 -20 0 20 40 60 80 100

0-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74

80+

Population in millionsMale 2015 Female 2015

Male 2035 Female 2035

Source: United Nations, Department of Economic and Social Affairs, Population Division (2011). World Population Prospects: The 2010 Revision. http://esa.un.org/wpp/Excel-Data/population.htm

East Asia and Pacific

-160 -120 -80 -40 0 40 80 120 160

0-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74

80+

Population in millionsMale 2015 Female 2015

Male 2035 Female 2035

Over the past two decades, agriculture’s share in GDP contracted in Africa, but manufacturing did not replace it

Africa’s Youth Employment Challenge Starts with the Structure of Past Growth

0.0

0.2

0.4

0.6

0.8

1.0

1990 2010 1990 2010 1990 2010

SSA South Asia East Asia

Agriculture Industry (exc. Manufacturing)

Manufacturing Services, etc.

Low income countries

0.0

0.2

0.4

0.6

0.8

1.0

1990 2010 1990 2010 1990 2010

SSA South Asia East Asia

Agriculture Industry (exc. Manufacturing)

Manufacturing Services, etc.

Low-Middle income countries

Growth has not been “Jobless”

4.0

2.1

12.9

11.2

3.2

0 5 10 15

Total

Farm

HouseholdEnteprises

Wage Private

Wage Public

Annual Growth Rate

3.2

1.9

1.8

7.6

-0.5

-5 0 5 10

Total

Farm

HouseholdEnteprises

Wage Private

Wage Public

Annual Growth Rate

Tanzania2000/1 – 2005/6

Ghana, 1991/2 – 2005/6

2.9

2.0

8.6

7.3

-0.6

-5 0 5 10

Total

Farm

HouseholdEnteprises

Wage Private

Wage Public

Annual Growth Rate

Uganda, 1992/3 – 2005/6

Growth in Primary Employment, by type of job (%)

Note: Tanzania is mainland only

Even so, in 2010 most Africans worked in agriculture and household enterprises

0

20

40

60

80

100

Low Income(183 m)

Lower-MiddleIncome(40 m)

Resource Rich(150 m)

Upper-MiddleIncome(21 m)

Total(395 M)

Lab

or

Forc

e D

istr

ibu

tio

n 1

5-6

4P

erc

en

t

Agriculture HE Wage Industry Wage Services Unemployed

What will the structure of employment look like in 2020?

0

20

40

60

80

100

Low Income(248 m)

Lower-MiddleIncome(52 m)

Resource Rich(200 m)

Upper-MiddleIncome(23 m)

Total(523 M)

Lab

or

Forc

e D

istr

ibu

tio

n 1

5-6

4P

erc

en

t

Agriculture HE Wage Industry Wage Services Unemployed

Where will the new jobs come from?

0

50

100

150

200

250

300

Agriculture HouseholdEnterprises

WageIndustry

WageServices

Lab

or

forc

e (

mill

ion

s)

2010 New Jobs in 2020

Projected net new jobs in 2020 compared to 2010

37%

38%

21%

4%

Agriculture Household enterprise

Wage services Wage industry

Gross job flows between 2010 and 2020 (percent of new

entrant individuals)

In this economic environment, the transition from school to work in Sub-Saharan Africa is slow

Rural Urban

0.0

0.2

0.4

0.6

0.8

1.0

15 17 19 21 23 25 27 29 31 33

Pro

po

rtio

n

Age

0.0

0.3

0.5

0.8

1.0

15 17 19 21 23 25 27 29 31 33

Pro

po

rtio

n

Age

Not at School, Not Working, Looking for WorkAt School

Both Working and at School

Working

Young women face additional challenges—family formation starts earlier

0

0.2

0.4

0.6

0.8

1

15 17 19 21 23 25 27 29 31 33 35

Ever had sexual intercourse

Ever married

Ever had a child

Female

0

0.2

0.4

0.6

0.8

1

15 17 19 21 23 25 27 29 31 33 35

Ever had sexual intercourse

Ever married

Ever had a child

Male

The employment agenda starts with education as it shapes opportunities…

Education Profile of Workers ages 25-34 in each Sector

0

20

40

60

80

100

Agriculture Non-farmhouseholdenterprise

Wagewithoutcontract

Wage withcontract

All

No Education Primary incomp. Primary comp. Secondary +

Priority Actions to Speed Youth’s Transition

A cross-cutting agenda on education quality

-100

-80

-60

-40

-20

0

20

40

60

80

100

Per

cen

t

Competent and above (5,6,7,8)

Beginning numeracy (Level 4)

Pre, Emergent and Basic numeracy (Levels 1,2,3)

Percent of SACMEQ 6th grade Math test-takers who score at each performance level

Africa is becoming educated….. but too many primary school leavers do not have even basic skills

0

20

40

60

80

100

GhanaGrade 3

KenyaEnd

Grade 3

LiberiaEnd

Grade 2

MaliEnd

Grade 2

SenegalEnd

Grade 3

TheGambia

EndGrade 2

UgandaEnd

Grade 2

Per

cen

t

Percentage of students who cannot read a single word of a

simple paragraph, 2010

Severe Shortfalls in the Delivery of Education Services

Service Delivery Indicators

Kenya Senegal Tanzania Uganda

(Public schools only)

Classroom teacher absence rate 47% 29% 53% 57%

Share of teachers with minimum

knowledge:

English/French 10% 29% 9% 4%Mathematics 75% 75% 73% 36%

Classroom teaching time 2h 19m 3h 15m 2h 04m 2h 58m(scheduled teaching time) (5h 40m) (4h 36m) (5h 12m) (7h 20m)

Priority Actions to build a strong human capital foundation

• Address the lack of learning in basic education by reforming accountability frameworks, ensuring teachers are prepared and supported, and leveraging private providers

• Promote ECD and nutrition to build a stronger foundation for skills development

• Build socioemotional and behavioral skills (consider reforms within the school system)

Priority actions now to speed youth’s transition

For agriculture

For household enterprises

For the modern wage sector

Cross-cutting

New opportunities exist in agriculture, but youth need land and

support to make it productiveLand ownership by age group

0

10

20

30

40

50

60

70

80

Pe

rce

nt

Age

Malawi Tanzania Uganda

Opportunities and constraints

• Growing demand for food produced on Africa’s farms –domestically and exports

• Youth can be early adopters of new technology if it is available

• … but serious constraints in access to land and capital, technology and skills

Priorities for higher youth productivity in agriculture

Do now, for now

• Enable rental markets for land

• Support high-quality, demand-driven extension services (covering information as well as skills)

• Promote rural village savings and loan associations and self-help groups

• Link agricultural credit to extension services

Do now, for later• Establish effective land

registration and transaction systems

• Scale up intergenerationalland transfer programs

• Mainstream youth into interventions (producer organizations, livestock development, irrigation, and others)

• Build skills through rapid improvements in education systems in rural areas

Household Enterprises are not SMEs – they need their own approach, and youth need support to seize opportunities

Most enterprises are family operations

0

10

20

30

40

50

60

70

80

SelfEmployed

SelfEmployed

with FamilyHelpers

With 1-4Employees

5 +Employees

Pe

rce

nt

Youth struggle to start a business

0

5

10

15

20

25

30

35

15

- 1

9

20

- 2

4

25

- 2

9

30

- 3

4

35

- 3

9

40

- 4

4

45

- 4

9

50

- 5

4

55

- 5

9

60

- 6

5

66

+

Pe

rce

nt

Distribution of HE owners

Share of age group being in HE owners

Priorities for productivity in household enterprises

Do now, for now• Develop a national strategy that

reflects the voice of youth and household enterprise owners

• Ensure access to workspace and infrastructure for household enterprises through improved urban policy

• Leverage NGOs to deliver programs for youth to address multiple constraints (building a range of skills together, building skills along with providing access to finance)

Do now, for later

• Build foundational skills through rapid improvements in education systems

• Address infrastructure needs of household enterprises in urban development planning

Financial inclusion for family farms and enterprises, as well as households

African youth save, but not in banks (Youth 15-24 who save)

• Households, and farm or business finances comingled

• Households need place to save and to get credit

• Youth need savings to start a business or buy inputs for the farm, and a place to safeguard profits

• Mobile money shows promise but need better regulations

• Informal savings groups are filling the gap, especially in rural areas

0

5

10

15

20

25

30

Low income Lower-middleincome

Upper-middleincome

Low income Lower-middleincome

Upper-middleincome

SSA Rest of the World

Pe

rce

nt

Formal Informal/Club Other

A manufacturing strategy won’t solve today’s youth employment, but it will help the next generation

Manufacturing employment has grown slowly

“Game changer” scenario will take time to have an effect

0

50

100

150

200

250

300

Eth

iop

ia 1

99

02

00

7

Ken

ya 1

99

02

00

7

Gh

ana

198

02

00

3

Cam

ero

on

19

902

00

7

Mal

awi 1

990

20

07

Sen

egal

19

90

20

00

Tan

zan

ia 1

99

02

00

7

Man

ufa

ctu

rin

g Em

plo

yme

nt

(‘0

00

of

wo

rke

rs)

0

20

40

60

80

100

Original Alternative Original Alternative

Low Income 248 m) Lower-middle income (52 m)

Pe

rce

nt

Agriculture Household enterprises

Wage industry Wage services

Unemployed

Priorities for increasing modern wage sector jobs

Do now, for now

• Reduce the cost of infrastructure services by addressing quality and efficiency

• Address logistics bottlenecks

• Reduce corruption and the cost of business start-up

• Reform technical vocational education and training and pursue public-private partnerships for delivering demand-driven training

Do now, for later

• Increase the quantity of infrastructure services

• Expand regional markets for products

• Build foundational skills through rapid improvements in education systems

• Improve access to credit through financial sector reform

Cross-cutting priorities

Do now, for now

• Use safety net programs as a platform to deliver interventions to disadvantaged youth

• Increase awareness of opportunities and pathways to self-employment, especially for young women

• Consider second-chance education for basic skills

Do now, for later

• Reduce fertility rates to lower the size of future youth cohorts

• Build better employment data and a stronger evidence base to identify country constraints, priorities, and opportunities

YE is about building skills through improving the quality of education, as well as behavioral and business skills

YE is about agriculture – where strategies exist but have not been implemented, and could benefit from a youth lens

YE is about household non-farm enterprises – where few strategies exist

YE is about creating more labor intensive enterprises as fast as possible to absorb the supply of new entrants with education who want wage jobs

YE is about female empowerment and focus on the poor

Governments need to own the “whole” problem

A wide ranging agenda …with no silver bullets

Thank you

www.worldbank.org/africa/youthemploymentreport