To employ a growing population, sub-Saharan Africa, and especially the fragile, conflict-affected and low-income countries in the region, need to transform informal jobs, reduce barriers to business growth, and create conditions conductive to jobs growth in higher productivity sectors, says a new IMF analysis.
By 2030, half of all new entrants into the global labor force will come from sub-Saharan Africa, which will require the creation of up to 15 million new jobs annually. According to the analysis published on the IMF Blog website, this will especially pose a challenge for the low-income and fragile countries in sub-Saharan Africa, such as Nigeria, that account for nearly 80% of the region’s annual job creation needs, yet have struggled the most to create jobs. With high fertility rates and youth populations yet to peak, their economies need to generate vast numbers of productive, quality jobs that provide above-subsistence-level income, whether in formal roles or self-employment.
The analysis outlines three main challenges to creating enough good jobs, while pointing out that policymakers have the tools at their disposal to make a difference. First, it calls on the governments to put in place policies to facilitate shifting informal jobs from a trap to a stepping-stone through well matched skills training, better access to finance, and policies that encourage transitioning to formal employment. Second, there is a need for creating conditions that are conducive to jobs growth in high-productivity sectors like modern services and manufacturing. Third, the analysis advocates for policies designed to break down barriers to private business growth.