A study on Youth Self-Employment in Ethiopia reveals that the population surge in Ethiopia over the past three decades has created a reservoir of young people for the labour market. This is particularly evident in urban areas where the labour force grew by 11 percent per year on average. While traditionally the public sector absorbed the bulk of new entrants, as the youth population continues to grow, the decline in public employment has paved the way for an increasing reliance on private initiatives to provide jobs. The private sector investments and entrepreneurship continues to immensely contributing the largest share of job opportunities especially in urban areas.
The study identified the most important socio-economic and employment policy challenges for the work-seeking population. Lack of or insufficient information on employment opportunities and self-employment, inadequate and inefficient public employment services, limited access to finance to become self-employed, and inadequate and inappropriate vocational training options are the major challenges.
Therefore, working to address the above gaps and promoting entrepreneurship are the fundamental solutions to absorb the growing job seekers.
In addition, promoting entrepreneurs and Small and Medium Enterprises (SMEs) will stimulate employment growth by generating new jobs when they enter the market.
Recently, the Federal Democratic Republic of Ethiopia (FEDRE) Jobs Creation Commission announced that more than 2.8 million jobs have been created within the past nine months of the current Ethiopian budget year.
Presenting the commission’s nine months performance report to the Jobs Creation Council recently, Commissioner Nigussu Tilahun said that the service sector is the leading source of jobs through creating 41 percent of the total jobs by the current Ethiopian budget year.
The industry sector creates 30 percent while 29 percent of the total jobs are created in the agricultural sector. In general, 64 percent of the total jobs created are permanent while the rest 36 percent are temporary.
“The commission planned to create 3 million jobs by the current Ethiopian budget year. However, it achieved 95 percent of its plan by creating 2,812,410 jobs. The commission is working in cooperation with pertinent stakeholders to mitigate the major challenges facing the sector and call upon all stakeholders engagement to create more job opportunities for the youth,” he noted.
According to him, Amhara, Oromia, and Addis Ababa City Administration have achieved above plan in the past nine months through the largest number of job creation. In nine months, one million jobs have been created in Oromia and 762,000 in Amhara State. Afar and Harari, on the other hand, performed below the plan.
According to the data, out of the 2.8 million jobs created in the first nine months of the current Ethiopian budget year, 51 percent are created in the urban and the rest 49 percent created in rural areas.
According to the Job Creation Commission, it planned to create a total of three million jobs in various sectors in the current Ethiopian budget year and achieved 95 percent before the end of the budget year.
Deputy Prime Minister and Foreign Affairs Minister as well as Chairperson of the Council Demeke Mekonnen said that encouraging results have been registered over the past nine months through creating numerous jobs to the youth.
Demeke further said that efforts should be made to integrate job creation with the green legacy to bring about intertwined beneficial changes. The commission should also prioritize of start-ups and new entrepreneurs to promote more jobs opportunities creation in the country.
“Successful job creation has been achieved in the past nine months following the active engagements of the government and private actors. Addressing the low-income and job-seeking communities is fundamental to register sustainable economic growth,” he underscored.
The Deputy Premier urged stakeholders to work hand in glove to create more job opportunities in both urban and rural areas.
Experts provide various policy recommendations that the government should do to lead the job creation sector properly and enhance the youth productivity. The current youth employment policy needs adaptive and contextual strategies. Ministries, urban development, education and economic development need to enhance co-ordination and formulate policy strategies that correspond to the different drivers of urbanisation and the associated challenges and opportunities they generate sufficient jobs. The government needs to consider urban youth as a diverse group to ensure their specific challenges are addressed and opportunities are enhanced. The regional states and municipalities may need a policy space to formulate effective urban youth employment strategies that correspond to their own context.
More importantly, the government should work hand in hand with pertinent stakeholders prioritizing entrepreneurship. Thus, the government needs to incentivise the private sector to establish firms that generate waged-employment without letting the young labour force become adversely incorporated in the value chain. Therefore, successful Medium and Small Enterprises (MSEs) need to be supported to graduate to the medium level so that they can generate formal and waged-employment opportunities in the country.
To sum up, urban youth employment is a fundamental challenge that will shape Ethiopia’s present and future development. In the coming two decades, the urban population is expected to triple from the current 19 per cent. This enormously young urban population requires an enabling and inclusive socioeconomic and political system to become a catalyst for structural transformation. The first crucial step is to design adaptive policy strategies that correspond to the dynamics of high rates of urbanisation. Second, it is imperative to harmonise government intervention with a long-term development plan. Third, it is also vital that unemployed urban youth who are job searching receive systematic support.
BY TEWODROS KASSA
The EthiopianHerald 20 JUNE 2021
