Private sector is key for inclusive growth and decent jobs in Africa

7 November 2017

This week the Matasa Fellows Network is launching a call for young African researchers to apply to become a fellow. Given the major role that the African private sector can play in tackling youth unemployment and underemployment, the chosen theme of this year’s fellowship is Youth Employment and Private Sector Growth in Africa.

Golden Opportunities in Ethiopia - Simon Davis/Department for International Development

The large and dynamic private sector accounts for 70 per cent of production, more than 65 per cent of investment, and 90 per cent of African jobs (pdf) (particularly when the informal sector is included), so it is unsurprising that the livelihoods of so many Africans depend on it. The private sector has also been a major driver of the continent’s fast economic growth over the past 15 years. 

The link between economic growth in general and private sector growth and decent jobs specifically is relevant to the United Nations Sustainable Development Goal 8: to promote inclusive and sustainable economic growth, employment and decent work for all. Growth is a means to reduce poverty and increase decent and productive employment. Realising such links is key to improving the well-being of millions of Africans, particularly the youth.

Why should we be talking about the youth employment challenge? 

While the number of young Africans grows rapidly, progress towards job creation has been slow. Statistics are unreliable and vary enormously, but the African Development Bank (ADB) noted that at least 10 million Africans enter the job market every year while only around 3 million formal jobs are being created (pdf). Moreover, a recent ADB report shows that many young people are either unemployed or inactive, and many others operate in vulnerable and poor working conditions, often in the informal sector. The situation is especially bad for women. 

While unemployment remains a problem, a recent ILO report shows that underemployment is the bigger problem (pdf). Both adversely affect the level of decent income that can be generated and thus weaken standards of living. Clearly, therefore, the jobs being created are not matching the growing number of youth entering the jobs market. Consequently, many refer to Africa’s recent growth as ‘jobless’.  

Many explanations have been put forward for Africa’s slow progress in job creation, including the fact that growth is concentrated in capital-intensive areas, like the mining sector. Despite expanding education and training, the youth lack employable skills. Notwithstanding this, Africa’s economic growth is not sufficiently understood. Agriculture remains the main source of employment but tends to be low-input-low-output. The services sector is growing but high productivity/labour absorbing sectors have not emerged. So the sources and sustainability of jobs need to be researched in order to find more nuanced explanations: which business sizes and sectors are growing and contributing to jobs? How does the private sector perform in fragile states? How is job creation dependent on or affected by the expansion of digital technologies?

There is also a fundamental question of getting research and evidence to inform policy – an approach that entails a deeper understanding of different perspectives of knowledge and evidence, policy processes, and using evidence at critical points in policy-making process.

Multiple actors need to act on the youth employment challenge

Tackling youth unemployment and underemployment cannot be done by the private sector alone.  Solving the problem requires input from multiple actors, including the youth themselves, governments, non-governmental organisations, donors and the research community. 

Sparked by the enormous employment challenge, many approaches have been put in place to support, for example, skills development or efforts to turn the youth into a class of entrepreneurs or promoting labour intensive work programmes. Clearly such approaches need to continue in a coordinated and holistic manner. Governments need to provide an environment that enables business to play its part. Research also needs to provide policy-oriented solutions to key problems such as on ways of enabling the private sector to generate inclusive growth and decent jobs.

Continued support for policy-focused research on youth employment

The Matasa Fellows Network is a joint initiative of the MasterCard Foundation and the Institute of Development Studies. Launched in 2015, the Network seeks to develop a cohort of outstanding African researchers with the skills and commitment to engage in policy-oriented research around the challenges of young people and employment in Africa. Its aim is to contribute to the development of young researchers who will ultimately become established policy researchers in their fields. 

In 2016-17, the Matasa Fellows Network offered fellowships to 10 young African researchers. With coaching and facilitation from IDS, the Network enabled the researchers to bring a youth perspective into the analysis and discussion of their research, and to generate policy ideas. The initiative has led to the publication of ten peer-reviewed articles and policy briefs

Call for applications for 2017

This week we are calling for young African researchers who either recently completed or were about to complete their PhDs in areas of social sciences to apply for the latest round of fellowships.  

Selected fellows will attend two review workshops and are expected to explore topics that include, for example: inclusive growth and decent jobs; the skills and talent that the private sector demands; how financial inclusion or advancement in digital technologies contribute to economic growth. They will also investigate different ways of getting research into use. 

We invite prospective fellows to address youth employment challenges from different disciplinary and multi-disciplinary angles, and mixed methods approaches – all leading to high quality policy relevant outputs. 

The Network will support each young researcher to produce a high quality research synthesis paper and policy brief. The papers will be disseminated via publication in a special issue of the IDS Bulletin

Applications are open until 7 December 2017. Apply now to become a Matasa Fellow.  
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Photo credit: Simon Davis/Department for International Development

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