Global Employment Trends 2014

Job-rich growth: a game changer for Africa’s inclusive development

High levels of youth unemployment call for strong employment-friendly policies to promote a job-rich growth in Africa, according to the ILO’s Global Employment Trends 2014 report.

Press release | ADDIS ABABA | 21 January 2014

ADDIS ABABA (ILO News) – High levels of youth unemployment, poor structural and labour market transformation call for more employment-friendly policies to promote a job-rich growth in Africa’s development strategy, according to the ILO’s Global Employment Trends 2014 report.

The Global Employment Trends 2014 report said employment growth remains weak, unemployment continues to rise, especially among young people, and large numbers of discouraged potential workers are still outside the labour market.

Growth has decelerated sharply in North Africa, falling to 2.9% in 2013 while this region witnessed the highest unemployment rate in the world with more than 29 % in 2013. For example, unemployment among young people has reached around 19% in Morocco, over 22 pc in Algeria and 25 % in Egypt. The growing number of youth unemployed can be to a large extent explained by high levels of skill mismatches.

As a result, the demographic change characterised by a growing young population is considered to be a burden on the economy rather than an asset due the scarce job opportunities in the region and necessary conditions required to absorb and employ this growing young population are absent.

Education in North Africa does not guarantee employment. Statistics show that unemployment increases with higher educational attainment. For instance, over 29 per cent of those with tertiary education are unemployed in Tunisia; over 18 per cent in Morocco, 15 per cent in Algeria; and around 14 per cent in Egypt. Female unemployment rates are high, and the gender unemployment gap is large. Their labour market participation rates are the lowest of all regions, reaching barely 25 per cent in North Africa.

“What is urgently needed is a policy re-think. Stronger efforts are needed to accelerate employment creation and to support enterprises that create jobs,” said ILO Director-General Guy Ryder.

According to the report, expanding employment opportunities for both young people and women could contribute significantly to an increase in GDP per capita and help larger parts of the population to benefit from wealth generated in these countries. North Africa needs to undertake substantial efforts to diversify the sectoral allocation of the FDI inflows. This requires develop the necessary business environment for foreign investors to also put their money outside the traditional industries and, for instance, create opportunities in high-skilled services or the manufacturing industry. Trying to achieve and maintain macroeconomic stability in this environment will be a key challenge for 2014 and the coming years.

Vulnerable employment remains a major concern in Sub Saharan Africa

Despite a solid economic growth in Sub Saharan Africa the vulnerable employment rate in the region is estimated at 77, 4% in 2013 which is the highest rate of all the regions in the world. In many developing economies, the manufacturing sector has served as an engine of paid employment creation, but by and large this has not happened in Sub-Saharan Africa. The share of industry in GDP slightly decreased in Sub-Saharan Africa from 30.7 per cent in 1991 to 29.7 per cent in 2011, but the share of manufacturing decreased by around a third in this period, from 16.7 to 11.1 per cent (World Bank, 2013). In terms of employment, the share of workers in industry in Sub-Saharan Africa, which is estimated at less than 10 per cent, is extremely low.

Similarly, the proportion of the working-age population in paid employment is low in Sub-Saharan Africa (13.7 per cent). Hence, the challenge of creating gainful employment opportunities and the related need for economic and labour market transformation has been now recognized by African policymakers.

It is therefore urgent to redouble efforts to put in place pro-employment economic and social policies based on productive transformation and fast structural change, according to the report. But low levels of educational attainment, widespread under qualification, a young and rapidly growing population and labour force, in combination with few opportunities for paid employment in Sub-Saharan Africa underline also the need for increased social spending in the region. In most African countries, only 4–6 per cent of GDP is spent on social security benefits, and average expenditure in Sub-Saharan Africa is the lowest of all regions.

Social protection policies help to reduce poverty, and to strengthen the foundation for future inclusive growth.

For more detailed info and interview requests:
ILO Africa Communication team in Addis Ababa (www.ilo.org/africa):
guebray@ilo.org , Tel: + 251/115-444415 or + 251/911-218115
rahel@ilo.org Tel: + 251/115/444454 or + 251/911-218113