How can we provide enough jobs for young people in Africa?


Nigeria's Coordinating Minister for the NigeriaEconomy and Minister of finance Dr. Ngozi Okonjo-Iweala
Nigeria’s Coordinating Minister for the Economy and Minister of finance Dr. Ngozi Okonjo-Iweala

Africa should focus on how to secure development and drive economic growth with inclusion. We must look beyond the macro fundamentals of growth to how to diversify our economies and create jobs. Africa must not become a breeding ground for insurgents and terrorism that undermines development.

According to the Organisation for Economic Co-operation and Development and the African Development Bank, people under the age of 25 account for about 60% of total unemployment in sub-Saharan Africa. On average, 72% of the youth population lives below the $2 a day poverty line, according to a World Bank survey. In Nigeria, my own country, about 63% of the population is under 25. Unemployment is at 23.9%, with youth unemployment at about 37%.

How do we solve this problem?

First, to keep pace with population growth, it is necessary that Africa’s economic growth continues. To ensure this, we must look beyond reliance on primary commodity exports and natural resources. We must diversify our economies by focusing on alternative sources of growth and job creation. We need to add value to agriculture and other commodities. We need to develop manufacturing, petro-chemicals and other sectors.

It is important that we fill the infrastructure gap, which is costing Africa at least 2% in GDP growth annually. We need to join hands with the private sector and invest proceeds from our natural resources in critical infrastructure like power, roads, rail, ICT, and water and sanitation. We need to develop our financial systems to provide flexible and timely credit. We need to develop capacity for entrepreneurship, especially among the youth, as a major driver of job creation.

In Nigeria, we are focusing on high-value agriculture, where we expect to create 3.5m jobs by 2015. We are developing manufacturing and the housing, ICT, solid minerals and creative industries. We are also closing the gaps in our infrastructure. We have embarked on a comprehensive privatisation programme in our power sector and are investing some of our petroleum subsidy savings in building roads and bridges, and improving our rail transport system.

Second, we must develop our human capital in Africa. We need to improve access to education, especially for girls and women, and ensure the education our young people receive equips them with the skills they need to work. The Nigerian government, led by President Goodluck Jonathan, has made improving both access to education and its quality a national priority.

Third, we need to build safety nets. We need to develop identity platforms and biometric systems that will facilitate this. We need to build a tax system that can efficiently redistribute income to those at the bottom. In Nigeria, we launched a pilot phase of a conditional cash transfer scheme in May, to support maternal and child health.

Fourth, the reality is that Africa needs to pay attention to demographic issues. I believe we have not discussed this enough. China’s much-reviled one child policy was crucial to its economic success. I’m not suggesting we follow this, but we Africans must now look for our own homegrown policies that would manage our population growth so whatever economic growth we achieve can be poverty-eradicating and more inclusive. Education for women and girls is key.

Fifth, while our young can present challenges to our economic development, they can also present unique opportunities. In the 1940s, the Asian Tigers such as South Korea found themselves in a similar situation to Africa’s today. They had a very young population and built their economies on the backbone of this labour force.

The Koreans developed a programme of “education for economic growth”, focused on investing in skills and education for the youth to power industrial revolution and economic growth. They were able to transition from a developing to a developed economy by investing in their young labour force. Africa’s youth bulge, if properly harnessed, can also power economic activity over the next 30-40 years, as in Korea’s case.

In the short term, however, we need to introduce job-creation programmes. In Nigeria, we have engaged in programmes to create short-term job opportunities, including a community services programme for unskilled youth, and a graduate internship scheme, which will support 50,000 university graduates to acquire work experience in private-sector entities. We also created a special fund to provide grants of up to $70,000 to young entrepreneurs.

The security of Africa’s development is under threat if we do not address the rising phenomenon of jobless growth and high youth unemployment. We cannot afford to exclude our young ones from economic opportunities. I remain optimistic, however, that with the right policies African countries can harness the potential of their youth, tackle violence and restiveness among their citizens, and ultimately build more inclusive and prosperous societies.

Ngozi Okonjo-Iweala is finance minister of Nigeria. This is an edited version of the Oppenheimer lecture that she gave at the International Institute for Strategic Studies

Originally Published on the Guardian.



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