BY MEHARI BEYENE
It is obvious that focusing on science and technology development will have a significant impact on bolstering countries’ economic development. Hence encouraging on science and technology innovations and facilitating technology transfer activities significantly assist to curb development bottlenecks.
Some of the most exciting discoveries and inventions have been greatly contributing to a new era of innovation. Technological advances will continue to shape our lives well into the future.
In this regard, technological development dynamiting skills and technology transfer duties may have the potential to answer the rapidly changing world demand. In this respect, Ethiopia should take a lesson from Africa and other developed countries in introducing technological tools in order to harness job creation opportunities.
In this regard, recently Africa experts held discussions concerning job creation opportunities at ECA, the focus on youth employment has shown success across the continent and hits at the heart of the unemployment problem. The use of fiscal incentives to provide work experience to young job seekers has shown positive results in countries such as South Africa and Cameroon, while the facilitation of guidance and counseling services has also led to permanent employment in countries including Algeria and Egypt. It will be critical for governments across the continent to pursue a favorable equilibrium between labor demand and supply.
Another aspect to consider when assessing the labor market is the level of female labor force participation, how this level is expected to change over time and what this means for productivity and labor supply.
While female participation varies considerably across the continent, from around 17 percent in Algeria to some 65 percent in Botswana recognizing and embracing this segment of the labor force will be critical in formulating a sustainable, long-term solution to the unemployment problem.
There has already been some success in this regard across the continent: the Egyptian Micro, Small and Medium Enterprises Development Agency formulated specific targets to reach and fund female-owned SMMEs; targets which the agency later exceeded.
In addition, in Côte d’Ivoire around 50 percent of the beneficiaries of the Youth Employability and Insertion Support Programs were females, exemplifying the potential benefits from creating more inclusive employment initiatives.
Furthermore, many of the employment creation initiatives that focus on areas such as youth employment also incorporate targets to facilitate and encourage female job creation. While the initiatives discussed in this report vary considerably with regard to both intervention channel and sector targeted, there are a few overarching themes that are present in many successful initiatives. These include the focus on youth employment and skills development, and the leveraging of private sector resources through public-private partnerships.
Managing Director NKC African Economics, Noelani K. Conradie said that creating sustainable employment opportunities remains a challenge globally. However, Africa’s unemployment situation is arguably the continent’s most pressing concern, especially in light of demographic trends characterized by a young and growing population.
Apart from the negative socio-economic consequences related to elevated unemployment, especially among the youth, Africa runs the risk of missing out on the benefits of the so-called demographic dividend.
Employment creation is therefore of the utmost importance to drive Africa’s broader development goals and address serious issues such as widespread poverty, income inequality, gender disparities and insecure livelihoods. It is towards this end that this paper examines some of the more recent job creation initiatives across the continent, with the aim of identifying the factors that have contributed to the success of these initiatives.
On her part, the socio-economic diversity across the continent means that the success of an initiative in one country does not guarantee success in another, but there are undoubtedly lessons to be learnt from experiences across the continent.
This, in turn, provides insights that can be considered when formulating future policies aimed at stimulating employment. NKC African Economics share in the desire to see our continent flourish. We want to make a meaningful contribution to the developmental discussion and play a supporting role in Africa’s path towards unlocking its immense potential. The lessons drawn from this research, in collaboration with the United Nations Economic Commission for Africa, aim to provide insight from a policy perspective, or at the very least stimulate further discussion on a topic often marred by differing ideologies or preconceived ideas.
The COVID-19 pandemic has resulted in socio-economic regression on a global scale. Most nations will experience a drop in economic output despite sound institutions and previously ingrained macroeconomic stability. Governments across Africa have been proactive in taking measures to attempt to cushion the economic impact of the pandemic. However, many African nations, if not most, have had to grapple with much less favorable fiscal metrics than those observed in some more developed markets, and both the magnitude and duration of fiscal stimulus has had to reflect this reality.
Still, government responses have been critical in protecting livelihoods across the continent. In the south, the government of South Africa announced the support package in the form of tax measures aimed at assisting businesses through the difficult months ahead.
In the east, Kenya announced an eight-point economic stimulus package with a focus on supporting small-and medium-sized enterprises and jobs-intensive sectors such as manufacturing and tourism. Finally, in the west, the Nigerian government pushed through expansionary revisions to the fiscal budget with the aim of easing pressure off the economy, despite lower oil prices putting severe strain on government finances.
On the monetary policy front, benchmark interest rates dropped to all-time lows in countries from South Africa to Morocco and Rwanda to Côte d’Ivoire during the COVID-19 pandemic, but the more effective measures, arguably, have included widening the collateral accepted for central bank lending facilities and reducing liquidity and capital requirements for banks.
While the initial shock is exogenous, the speed of recovery will be determined by underlying fundamentals. There are numerous structural factors that will drive economic growth after the crisis, and the institutional and economic diversity across the African continent means that the recovery will be far from uniform.
Countries with greater economic freedom and favourable operating environments will be more adaptable and therefore have an edge moving into a post-corona world.
Moreover, while many jobs will be lost and as businesses fail, new beginnings can be facilitated by flexible labour markets, skilled labour forces, and accommodating business environments. Now, more than ever, investment is likely to be skewed towards countries with stable macroeconomic and political environments.
During the five years ending 2019, certain East and West African nations boasted some of the strongest growing economies globally. The compound annual GDP growth between 2014 and 2019, in Tanzania, Côte d’Ivoire, Rwanda and Ethiopia, are worth considering.
These reflect a new global economic reality, and while they pale in comparison to that observed over the past decade, they show the continent should remain host to some of the best performing economies globally.
Optimism, however, should be tempered by the continent’s most pressing concern, which has been exacerbated by the pandemic: unemployment.
It is concerning that some of the largest working age populations in the continent are present in some of the slowest growing economies. Meanwhile, most African countries, despite recent or expected future growth, still struggle with elevated unemployment.
The Coronavirus crisis has had a particularly negative impact on smaller firms, which matters because they are critical in job creation and supporting productivity growth. Another important factor to consider is the prevalence of vulnerable employment, meaning there is a high incidence of jobs that are inherently volatile and fail to provide income security.
The Ethiopian Herald August 13/2021
