Africa heading for jobs crisis

Unemployment in Nigeria, sub-Saharan Africa’s largest economy, is running at more than 14% and climbing.

In South Africa, which has again dipped to Africa’s second largest economy, unemployment is more than 27%. For the youth in both states, it is far more. This may seem bad enough, but according to International Monetary Fund calculations, the sub-Saharan Africa region’s jobs travails are in danger of reaching uncharted territory in less than two decades.

That is, unless the economies can create jobs for their burgeoning, young population.

“By 2035, sub-Saharan Africa will have more working-age people than the rest of the world’s regions combined,” the IMF said.

“This growing workforce will have to be met with jobs.”

That has major implications for the region’s economy, its security and wider immigration patterns. In the past, some of the jobs strain has been taken up by the informal economy, dominated by street vendors, household workers and off-the-radar cash jobbers.

Typically, these workers pay no tax and do not come under regulation, but they do add to a country’s wealth.

The informal sector in sub-Saharan Africa was about 38% of gross domestic product in 2010 to 2014, the IMF said.

This represented a steady decline from 45% in 1991 to 1999, possibly a reflection of more formal growth in some parts of Africa.

But up to 90% of jobs outside agriculture are still in the informal sector, and not generally by desire.

The IMF found a third of new entrepreneurs in sub-Saharan Africa said they were doing what they were doing out of necessity.

“Most would prefer a job in the formal sector, but do not have that option,” it said.

“Women, migrants and other vulnerable groups of workers who are excluded from other opportunities have little choice but to take informal low-quality jobs, which have a lack of payment protection.”

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