Invest in Education and Skills for Inclusive Growth

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Education is the surest bet to get all segments of society involved in and benefiting from economic growth and transformation.

This is a view shared by many economists and top business and academic leaders who converged in Rwanda's capital Kigali last week for the 7th edition of the African Economic Conference that the African Development Bank organized in conjunction with the United Nations Development Programme and the UN Economic Commission for Africa.

Therefore, African countries need not only to invest more resources in their education sectors; they also need to review the systems and curricula they have in order to ensure that they respond to demands in the labour market.

"The one most important thing for inclusion is getting the children of very poor people into quality education because this is how you stop children inheriting living conditions of their parents. Once you do that, you have stopped that transition," said Donald Kaberuka, the President of the AfDB.

"We are all here in this room from different families, some poor some rich some even with no income at all, because we got quality education. Our children are unlikely to inherit the conditions of their grandfathers and grandmothers.

"So if there is one thing which I strongly believe in it is this idea of ensuring that we don't transmit poverty from generation to generation. You can't do that by oil and gas, tin and minerals. You do that by getting those resources invested in education," Kaberuka added.

Education, social capital and effective institutions are the three key factors behind the growing size of the middle class in Africa that a synthesis of data in Demographic Health Surveys of 42 countries covering the 1990s and 2000s concludes has grown from five per cent in the 1990s to 15 per cent in the 2000s.

"If you are an advisor to government, please tell them to pump money in education and health because that will change things," Abebe Shimeles, the Manager of AfDB's Development Research Division, said in a paper he co-authored with the AfDB's Chief Economist, Professor Mthuli Ncube, out of the DHS data.

"That's what everyone is saying; through education you can break the cycle of intergenerational poverty. The evidence is here also and is very clear; the better educated ones are at least better off in any way you measure it," Shimeles added.

Although Africa's population, which is mostly young, is more and better educated today than at any other time in the continent's history, the 2012 African Economic Outlook concludes that the mismatch between their qualifications and the skills sets that different country labour markets require means that the continent's growing labour force, estimated to hit one billion by 2040, is unlikely to find meaningful employment.

The AEO, which the AfDB produces jointly with UNDP, UNECA and the OECD, attributes the mismatch to the absence of linkages between education systems and employers, university systems that have traditionally focused on educating for public sector employment without any regard to tailoring their programs to African needs.

"Graduates in technical fields such as engineering and information technology (IT) have less problems finding employment than those from the social sciences or humanities. As the same time, these latter fields have much higher enrolment and graduation numbers," notes the publication.

"According to African recruitment and temporary work agencies, the most difficult sectors in which to find candidates with tertiary education are those that need specific technical qualifications, such as the extractive industries, logistics, the chemical and pharmaceutical industries, manufacturing in general and agri-business," reads the AEO.

To turn this a, African governments need to push their universities to respond to individual country labour market needs by improving the quantity and quality of education in technical fields and agriculture as, indeed, many are trying to do. Moreover, they need to expand secondary-level education since returns to primary education are low.

"Quality education is not a complex concept. There are international tests to see how children are performing in basic mathematics, aptitude, in basic science and today Asians are leading. So it is not hidden about what kind of education countries need," Shimeles said.

According to Shimeles, the AfDB is conducting a study in selected African countries to inform its advocacy for reforms in African education systems that respond to the demands of the private sector, which holds the greatest promise to absorb the continent's burgeoning labour force.

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