“African governments, with the help of private-sector actors, must develop methods for understanding how the informal economy works and how it can be improved. Only then will it be possible to address unemployment and poverty effectively and unlock the po
The billions of dollars in aid delivered to Africa annually may do the continent much good, but it cannot deliver a solution to poverty. Only creating more high-quality jobs can do that. The question is how.
Africa boasts a large and creative labor pool, buttressed by a youth population that is expected to double, to over 830 million, by 2050. That should be a boon for economies across the continent.
But African policymakers confront a serious problem: they do not know how many people they are dealing with, where they live, or how they earn a living. Simply put, they don’t have enough data.
In 46 of 54 African countries, official tracking of vital statistics such as birth, marriage, and death is limited. As the Mo Ibrahim Foundation reports, only “a third of all Africans live in a country where a census has been conducted since 2010,” and the census programmes that do exist are often underfunded and unreliable. More than half of all Africans live in countries that have not conducted a labor-force survey in at least a decade.
Meanwhile, young Africans are largely working in the informal economy, where they enter into ad hoc arrangements that lie beyond the purview of government regulation and taxation. They may be doing productive work, but in economies where informality is effectively institutionalised, owing to a lack of data-collection mechanisms.
Without an accurate picture of the state of the labour market, governments are hamstrung in their ability to respond to the challenges afflicting it. Initiatives aimed at reducing youth unemployment, while numerous, can only be so effective if we don’t know which types of jobs already exist and which are needed. With an estimated 122 million people expected to join the African workforce by 2022, keeping up with labor trends – and delivering enough good jobs – will only become more difficult.
Bringing the picture into sharper focus through improved data collection does not mean simply imitating the labourtracking methods used in OECD countries, where the informal economy does not account for such a high share of employment.
Instead, African governments, with the help of private- chains where young people can contribute, African leaders can create decent formal job opportunities in, say, light manufacturing for relatively low-skill workers. Only a small amount of skills training would be required to lift workers – such as the 120 now employed at a tomato paste factory in Nigeria – from the bottom of the value chain.
Another promising approach is exemplified by Johannesburg’s Vulindlel’ eJozi program, which aims to eliminate barriers to entry-level employment for young