Employment in Africa: What is happening today and what to expect in 2015

The employment situation has not improved much in Sub-Saharan Africa, despite better economic growth performance. And in the Arab region the employment outlook has deteriorated, says ILO in its new report.

Press release | 20 January 2015
ADDIS ABABA (ILO News) – Unemployment, income inequality and social unrest will continue to affect the African region in the coming years, despite better economic growth performance, warns a new ILO report. 

According to the  World Employment and Social Outlook – Trends 2015 (WESO),  Sub-Saharan Africa continues to record strong growth rates, despite infrastructural weaknesses and institutional challenges. But – even with its relatively good growth performance and its recovery being less affected by the difficulties of the global economy – the Sub region will not experience a significant decline in its unemployment rate.

Instead, in most of these countries, underemployment and informal employment are expected to remain stubbornly high over the next five years. In addition, unemployment, at a rate just under 8 per cent in 2014, is expected to remain stable through to 2016. Sub-Saharan Africa has the highest rate of working poverty and vulnerable employment across all regions. The number of workers in vulnerable employment has increased by 27 million since 2012, and currently stands at 1.44 billion worldwide.

Sub-Saharan Africa and South Asia account for more than half of the world’s vulnerable employment, with three out of four workers in these regions in vulnerable employment.
Moreover, the significant fall in oil prices that has continued in early 2015 will, if sustained, improve employment prospects somewhat in importing countries. However, this is unlikely to offset the impacts of a still fragile and uneven recovery – one that will worsen for oil exporters.

Sub-Saharan Africa has the highest labour force participation rate of all regions, estimated at 70.9 per cent – compared with a global average of 63.5 per cent in 2014.

THE MIDDLE EAST AND NORTH AFRICA


Difficult socio-political transitions continue to weigh on employment prospects of Middle East and North Africa (MENA). GDP growth in the region is expected to have remained tepid in 2014, at around 2.6 per cent, slightly above the 2.3 per cent registered in 2013. In 2015, GDP growth is forecast to reach 3.8 per cent.

However, projected economic growth will not be sufficient to reduce high unemployment rates. Domestic consumption will continue to drive growth among oil-importing economies, which are expected to grow on average by around 3 per cent in 2014 and 4 per cent in 2015. Below-average GDP growth in 2014 is expected in Egypt and Lebanon, while Morocco and Tunisia should have grown by 3.5 per cent and 2.8 per cent, respectively.

In particular countries in North Africa and the Middle East continue to suffer from high unemployment rates, in some cases up to 30 per cent of the labour force.
Rising inequalities have undermined trust in government, with a few exceptions. Confidence in government has been declining particularly rapidly in countries in the Middle East and North Africa region.

Social unrest at the global level declined during the 1990s and 2000s – in line with the global unemployment rate – up to the crisis in 2009, when it shot up and is now almost 10 per cent higher than before the crisis. The situation is most pronounced in the Middle East and North Africa.

THE EBOLA FACTOR


The Ebola virus in West Africa has had a significant toll on the countries most affected -- Guinea, Liberia and Sierra Leone. The economic cost to Liberia is estimated to be equivalent to a drop of 3.4 percentage points of GDP in 2014.

The human and economic costs of Ebola will create a number of developments will pose challenges and uncertainties. This includes the potential reversal of inward capital flows based on changes in monetary conditions in advanced economies. The immediate effects would increase pressure on external reserves and exchange rates, prompting fiscal adjustments that could compromise investment commitments and social spending. The setbacks would weigh heavily on aggregate demand, concludes the report.