title: Meeting Africa’s employment challenge in a changing world
Creators: name: Altenburg, Tilman
name: Coulibaly, Brahima
Publisher: name: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)
publisherIdentifier: https://ror.org/01t3zke88
publisherIdentifierScheme: ROR
Year: 2018
Subjects: subject: Afrika
subject: Strukturwandel
subject: Beschäftigung
subject: Wirtschaftliche Entwicklung
subject: Africa
subject: Structural Change
subject: Employment
subject: Economic Development

description: Around 2031, Africa’s working-age population will pass the 1-billion threshold. This
 growing workforce will require decent productive employment. So far, Africa’s economies
 have largely failed to create stable and well-paid jobs. For any one person working in the
 formal private sector, 10 work in the informal economy. Failure to generate sufficient
 formal-sector jobs for young people will increase migration and global security
 challenges. <br> Creating decent jobs at the scale required is inconceivable without a
 structural transformation that enables workers to move from low-productivity agriculture
 and informal trades to modern manufacturing or service sectors. Such a transformation took
 place in some East Asian countries, but no comparable dynamic has so far been observed
 anywhere in Africa. What’s more, the region has already started to deindustrialise at a
 stage when industry has not yet really taken off. <br> What, then, are the prospects for
 Africa’s economic future? Where should the millions of decent jobs the region urgently
 needs come from? We suggest exploring this not by extrapolating past trends, but by
 analysing how certain – potentially disruptive – global trends impact on African
 economies: 
 

 
 Natural resources are being depleted globally while the world population increases,
 becomes more affluent and demands higher-value food. Also, the global bioeconomy is
 likely to boost demand for fuel substitutes. This creates opportunities for countries
 with underutilised land resources.
 

 Urbanisation and the expansion of African middle classes will boost and diversify
 demand, creating opportunities for local consumer industries. Trends towards sustainable
 smart cities also hold promises for African entrepreneurs in transport, electronics, the
 construction industry and other sectors.

 New digital technologies improve connectivity. Some digital innovations enable African
 producers to tap into hitherto inaccessible markets, whereas others may lead to
 automation and global market concentration at the expense of African producers.

 China’s rapidly increasing wages may lead to the relocation of labour-intensive
 industries to African countries with low unit labour costs – unless China uses
 automation to keep them at home.

 The imperative of reducing the world economy’s material footprint may create new
 opportunities, such as in low-input agriculture or electrification based on low-cost
 renewable energy. At the same time, it creates the risk of enormous capital losses in
 high-carbon and other unsustainable technologies.

 
 We do not know exactly how these trends will play out for individual African countries.
 Yet some trends will be game-changing. Hence, we recommend systematic efforts to explore
 them, with the aim of identifying competitive opportunities and taking strategic action
 early on. We identify some opportunities in manufacturing and services that we expect to
 become important (while recognising big differences across the region). We also suggest
 complementary investments in productivity and employment for the large proportion of the
 workforce not easily and immediately employable in competitive industries.
description: Briefing Paper, 18/2018