The Job Crisis haltering Africa’s Prosperity

Could the 21^st century belong to Africa? In 2022 Africa collectively has a nominal GDP of 2.96 trillion USD. Although this figure is dwarfed by the GDP of America, having roughly 25 trillion in 2022, there is reason to believe this gap could decrease in the near future.

Africa’s population is roughly 1.4 billion but will increase to 2.4 billion by 2050. In 2100 Africa’s population is expected to hit 4.3 billion. At that point, a third of all humanity will live on the continent. When considering the median ages of continents around the globe, they range between 31 in South America and Asia, 42 in Europe and 33 in Oceania. In contrast, Africa has a median age of only 18, further supporting this belief of exponential growth in Africa’s population, whilst exacerbating the need for jobs as the working-age population increases.

This rapid growth of population must be met with a rapid growth of jobs for economic growth to occur. This growth will require significant external support and changes from within. In 2018 the African Continental Free Trade Аrea (AfCFTA) was developed, which contained 43 parties and 11 other signatories. The aim of AfCFTA is to “enable the free flow of goods and services across the continent and boost the trading position of Africa in the global market” (Purpose of the AfCFTA – AfCFTA, 2022) and has ambitious goals to expand the African economy to $29 trillion USD by 2050. This is a positive first step, but many more are required to avoid this job crisis.

In the past, industrialisation has been a solution. In East Asia, many workers left agriculture and moved to manufacturing, which in turn boosted economic growth, job creation and poverty reduction. However, Africa has deindustrialised with its share of global manufacturing being smaller than in 1980. If this continues, it is estimated that less than a quarter of African’s expected to reach working age over the next two decades can hope to find decent work (Avoiding a Jobs Crisis in Africa Is a Global Responsibility – Our World, 2019).

A common belief is that Africa’s cities need more and more productive firms to increase wage employment and decent jobs. However, the solution is often falsely seen as interventions that promote entrepreneurship among young people, compared to greater investment in infrastructure and governance. The expectation is that this allows young entrepreneurs to earn a better salary and create jobs for others. However, recent study suggests that only a “tiny proportion” of youth entrepreneurs are successful, with most businesses operating at a subsistence level and do not create new jobs for others. This individualises the responsibility for finding employment, whilst diverting attention away from the failures and profound inequalities of the economic structure.

This current ineffective use of resources to create jobs and distractions from the rooted issues and challenges questions where Africa’s future prosperity resides.

As with many developing areas, the agricultural sector is vital to Africa. Agriculture is the cultivation of the ground to produce food, a growing subset of this industry is horticulture, which refers to the cultivation of fruits, vegetables, flowers, or ornamental plants. In Kenya, the horticultural generates over $300 million USD in foreign exchange earnings, producing close to 3 million tons. The domestic value of this sector in 2012 was $2.5 billion USD. According to statisa, agriculture had a 53.8% share of the total employment in Kenya (Kenya: Employment by Economic Sector 2011-2020 | Statista, 2020). If other countries within Africa follow Kenya’s footsteps, the expansion of the agricultural industry would create many jobs for native Africans and have a positive social impact on the continent.

Another opportunity for Africa to increase jobs is through market-creating innovations. An example of this is Celtel, a telecommunications company, that began operating in 1998 and operated in several African countries. Before Celtel, very few people in African’s had access to a mobile phone due to the lack of infrastructure. However, in six years Celtel gained 5.2 million customers, leading to the creation of many other companies. Telecommunications is now one of the fastest growing industries in Africa, in 2020 it is estimated to have supported 4.5 million jobs and added more than $213 billion of value to African economies. There are many examples of companies like Celtel that create new markets within economies, providing important tax revenues and jobs that improve the social and economic status of the country.

Ultimately, many structural and social economic changes will be required to achieve the exponential job growth Africa’s growing population demands. The future of Africa is prosperous through the reallocation of resources to better facilitate the growth of current industries and the innovation of new ones.