Despite the progressive trend in providing jobs for the growing labor force by the public and private sectors, the pace for manufacturing industry is being derailed to do so with the high tendency of the agrarian economy towards consumption dependent service sector, experts demanding for economic restructuring.
Central Statistical Agency’s 2018 survey indicated that the unemployment rate in Ethiopia’s urban areas was higher for females at 25 percent compared to males which stood at 12 percent and educated youth constitute the majority of jobless due to the rapid expansion of education.
Speaking to The Ethiopian Herald, Associate Professor of Economics at Dilla University, Dawit Hayeso (PhD) says that the government has been introducing and implemented successful policies and strategies for employment generations in the public
and private sectors.
Dawit states that the incumbent has also executed various activities to create productive jobs for urban educated youth with various skill categories and enable them to access plots, market, loan, technology, training and protection from informal sector. Commendable measures have also been taking place to enhance the skill levels of available labor force in the view to satisfy the market demands.
The expert notes that labor-intensive development approach has been witnessed in both the first and second Growth and Transformation Plans (GTP I and II) that have stipulated construction-driven economic growth. The government has also paid huge attention to create significant employment opportunities in various business and investment activities as well as infrastructural development.
Sharing the above, Business and Economics College Dean at Wollega University, Zelalem Ejigu (PhD)
says that the massive establishment and expansion of industrial parks and Integrated Housing Development Program have been putting in place aimed at boosting country’s export performance and curbing urban housing problem whilst generating significant employment for urban youth.
Zelalem further indicates that the construction sector in general and industrial parks and housing programs in particular avail the opportunity to huge number of labor force with varied skills and qualification to engage in different activities. Also, the establishment of a lot of Micro-and Small- Enterprises (MSEs) on manufacturing, construction and other sectors significantly curbing urban unemployment.
“The government has played instrumental part in enhancing the role and contribution of the private sector in the economy in the view to creating more jobs,” he says, adding that praiseworthy activities have also been done to make private capital a major hiring factor in urban centers.
The expert lauds the attention the government has been paying to attract private investment in labor-intensive sectors by providing them with export incentives, customs duty exemption, income tax holidays, and offering land in competitive lease price. The commitment to reinstate the remarkable economic participation of the private sector is paying off in creating big companies that have been challenging the dominant role of the public sector.
Despite the aforementioned successes, urban unemployment has been remained Ethiopia’s major socio-economic and political challenge and there is still a huge imbalance between labor supply and demand.
In this regard, Dawit argues that low agricultural productivity and weak rural-urban economic linkage deter the emergence of agricultural processing industries in urban areas thereby hampering creation of employment in the manufacturing sector. The current massive rural-urban migration that has been triggered by low level of investment and entrepreneurship in rural areas also caused more labor flow to urban centers and drops wage rate.
To Zelalem, the slow growth of the manufacturing industry coupled with agriculture and mining sectors inconsistent performance obstructed Ethiopia’s economy from generating sufficient jobs for new market entrants. The economy is dominated by construction industry which is characterized by cyclical employment and not sufficiently absorbs the huge labor force.
In spite of the rapid expansion of universities and other higher education institutions as well as technical and vocational training facilities, education quality has not reached at a desirable level and the market has faced difficulty to obtain graduates with the needed knowledge and skill, he elaborates.
Regarding the composition of urban unemployment, both experts indicate that the problem is being more prevalent among females due to the fact that most of them shoulder the unpaid household responsibilities in particular child care which often is not considered as productive activity.
Dawit says that the government should maintain efforts to enable the private sector taking the lead in job creation and put in place favorable business climate through addressing forex shortages as well as bureaucratic and infrastructural challenges.
According to Zelalem, revisiting the education curriculum in the way promoting practical skill development is critical to provide quality workforce and nurture the graduate’s entrepreneurial culture, while he calls for universities to undertake asessment studies to identify high-demand fields.
Both experts highlight that creating a proportional growth among rural centers lessens the existing huge flow of labor to state capitals and more importantly to Addis Ababa. Establishing rural agro-businesses and industries have also equal importance to avail employment for rural communities and curbing internal migration.
Improving agricultural productivity is so crucial to enhance agriculture- industry linkage thereby redirecting the transformation of agrarian economy from consumption dependent service sector to the more productive manufacturing industry that would potently address the gap in creating jobs, they remark.
Herald April 23/2019
BY BILAL DERSO
