East Africa Needs a Better Quality of Economic Growth to Tackle the Job Challenge

6 November 2019

Asmara — With a rapidly growing population, East Africa is facing a pressing employment challenge, and the current economic growth, albeit impressive, is not enabling the creation of enough decent jobs to tackle this challenge. Policy reforms are needed to ensure the growth creates more jobs and reduces poverty.

The study presented by Dr. Jessica Atsin from the Economic Commission of Africa and discussed by experts and officials representing the 14 countries of the subregion during the Asmara meeting, analyses the employment situation in East Africa.

East Africa is one of the fastest growing regions in the world, but has been experiencing a growth without jobs. While annual economic growth in East Africa averaged 6% between 2006 and 2016, the pace of job creation hasn't been able to catch up, with an employment growth rate of 4% on average. The study estimates that 8.3 million new jobs are needed every year in East Africa to absorb new entrants on the job market.

Moreover, "the benefits of East African high growth have not been shared by all, said Dr. Atsin, highlighting the fact that the new jobs created in the dynamic services sector are often informal and low paid, while inequalities have been rising. The study shows that unemployment figures for East Africa don't necessarily depict the reality of a majority of workers being self-employed, working in the informal sector or as domestic workers, poorly paid or not salaried at all.

The implementation of the AfCFTA, by boosting regional trade, is expected to have a positive impact on job creation, and at a faster pace in the manufacturing sector. Estimates forecast the job creation potential between 800,000 and 2 million jobs.

However, experts have highlighted, in order to tap on the benefits from the new employment opportunities, the current skills mismatch needs to be addressed. "We found that more than half of the young people entering the job market with a university diploma are not equipped with the skills expected by their employers. Automation, ICTs and the increasing level of technology required by jobs in the future will increase this skills' mismatch," said Vincent Leyaro, an economics lecturer at the University of Dar es Salaam.

The experts recommended to invest in a better quality of growth, implementing policies that could enhance the positive effect of the AfCFTA implementation on job creation. Their policy recommendations include providing incentives such as tax crdits to firms that train workers or increasing investment in technological and vocational training to empower people currently working in the informal sector. Policy makers, they argue, should also build entrepreneurial capacities of people involved in small and medium entreprises to enable them to create more jobs.

The ongoing 23rd Meeting of the Intergovernmental Committee of Senior Officials and Experts (ICSOE) for Eastern Africa is taking place in Asmara, Eritrea from 5-7 November. Deliberation focus on leveraging new opportunities for regional integration. More on the #ICSOE2019 meeting: https://www.uneca.org/ea-icsoe23

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