Social Research Digest – December 2012
The report by McKinsey Global Institute examines the employment landscape on the African continent. It identifies five key steps policy makers and business leaders can take to accelerate job creation.
- Africa must create wage-paying jobs more quickly to sustain achieved successes and ensure that growth benefits the majority of its people.
- Despite the creation of 37 million new and stable wage-paying jobs over the past decade, only 28 percent of Africa’s labor force holds such positions.
- Instead, some 63 percent of the total labor force engages in some form of self-employment or “vulnerable” employment, such as subsistence farming or urban street hawking.
- If the trends of the past decade continue, Africa will create 54 million new, stable wage-paying jobs over the next ten years—but this will not be enough to absorb the 122 million new entrants into the labor force expected over the same period.
- However, by implementing a five-part strategy to accelerate the pace of job creation, it is estimated that Africa could add as many as 72 million new wage-paying jobs over the next decade, raising the wage-earning share of the labor force to 36 percent.
- The five key steps for policy makers:
- identify one or more labor-intensive subsectors in which an African country has a global competitive advantage or could fill strong domestic demand;
- improve access to finance in target sectors;
- build a suitable infrastructure: countries that remove infrastructure constraints in target subsectors, particularly in export-oriented industries, can reap sizable benefits;
- cut unnecessary regulations; removing needless red tape in certain sectors is also important;
- develop skills in target sectors: around 40 percent of African workers now have at least some secondary education, and that share will rise to 48 percent by 2020.
McKinsey Global Institute