Project

Employment impact assessment to maximize job creation in Africa (STRENGTHEN 2)

Project documentation | 17 February 2021
STRENGTHEN 2 is hosted in the DEVINVEST branch of the ILO’s Employment Policy Department, is a joint initiative of the European Union and the ILO that focuses on job creation through investments. Launched in August 2020, the project is a strategic partnership with the overall goal of leveraging employment impact assessments to promote the creation of more and better jobs in sub-Saharan African countries.

A particular area of attention will be on European Union (EU)-sponsored actions, more specifically, the EU’s External Investment Plan (EIP) which aims, among others, to ensure an integrated approach to boosting investment climate and business environment in order to promote decent job creation and inclusive and sustainable development in Africa. Given the high levels of poverty in the region, rising inequalities in many countries, growing population in sub-Saharan Africa and high levels of inequality, unemployment and underemployment, in particular among young people and women, more and better jobs are an absolute necessity.

The project is helping the European Commission (EC) and its partners in:
a) better measuring the employment impact of EU investment-support actions by working with the EC itself, stakeholders in beneficiary countries and the development finance institutions (DFIs) partnering with the EC; and
b) identifying opportunities for employment generation by analyzing specific sectors and value chains, with an emphasis on the agricultural sector.

STRENGTHEN 2 is scheduled to end in July 2024 and builds on earlier ILO work, more concretely, work undertaken as part of the now concluded and also EU-supported first STRENGTHEN project. The project collaborates closely with the Mainstreaming Employment into Trade and Investment in the Southern Neighbourhood project, or METI, which covers related issues for countries in the Middle East and North Africa.

First focus area: Employment impact assessments

The project applies employment impact assessment methodologies to EIP actions at both the portfolio level and at the level of the individual project. The insights from applying relevant methodologies to these actions provide insights and questions for the below methodological and analytical deliverables as well as in-depth project assessments. In the process, the project team engages various national stakeholder groups, including government, workers’ and employers’ organizations.

The project contributes to the knowledge base on employment impact assessments (EIAs) along the investment project cycle – before, during and after project implementation. Areas covered include:
  • Enhancing input-output analysis as the most widely used tool to create employment estimates.
  • Leveraging other methodologies that show potential to improve the way long-term employment impacts can be measured, including those using micro-level data or geographic information system (GIS) data sources.
  • Exploring how the employment impact of various support modalities, e.g. blending operations or guarantees, can be adequately measured.
The employment impact assessments are first undertaken by the project team, but the methodologies and systems will be institutionalized within the EC and also made available to national stakeholders. The capacities of these groups are strengthened through specific support measures.

The project team facilitates exchanges among DFIs on how to measure the employment impact of investment projects and it contributes to the improvement and harmonization of such assessments. Since the EU is partnering in all of its investment actions of the EIP with DFIs, working with them on improved and further harmonized ways of measuring the employment impact of investment projects is an important aspect of the STRENGTHEN 2 project.

Relevant earlier publications on EIA:
  1. Guide for Monitoring Employment and Conducting Employment Impact Assessments (EmpIA) of Infrastructure Investments
  2. Employment impact assessments: A review of methodologies
  3. Review of impacts on roads sector investments on employment
  4. Rural renewable energy investments and their impact on employment
  5. Employment Impact Assessments: Integrating the informal sector into social accounting matrices and computable general equilibrium models

Second focus area: Employment creation

The EU is actively looking for promising sectors and value chains in EIP partner countries to target for future investment support actions. An important criterion in selecting these is the anticipated employment impact. The STRENGTHEN 2 project closely liaises with EU Delegations in sub-Saharan African countries in order to identify such sectors and value chains and undertake in-depth analysis on the employment potential of respective investments.

Relevant earlier publications on EIA:
  1. Employment effects in impact investment
  2. A market system analysis of the cashew processing industry in Mozambique
  3. Rural renewable energy investments and their impact on employment