Human Capital
KEY SUCCESS IN AFRICA
Africa’s human capital is at the core of leveraging inclusive value chain creation and jobs for youths to boost investment, manufacturing, incomes and growth in the years ahead. More than 70% of citizens in Ethiopia are under 30, and nearly 50% are under 15. In 2017, a World Bank report found that enrolment in higher education had multiplied fivefold since 2005, with the number of public institutions increasing from eight to 36 over the period. The government has also implemented a 70:30 higher education policy -training 70% of students in technology and science, and 30% in social science and humanities. In a world where service industries account for 65% of GDP, these are the type of education policies that seem adapted to new global context. Technology and knowledge-based industries have the potential to thrive, thanks to the cost advantages and the availability of human capital in Ethiopia. If the country’s youth can be channelled through relevant skills training, then this human capital will become a key economy-boosting asset.
Four out of every ten African software developers now work for at least one company based outside of the continent, while five work for local start-ups, according to recent research, highlighting the dynamic and growing market for the continent’s technical talent over the last two years. A 22% rise in the use of the internet by small and medium-sized business in Africa, a record fundraising streak by local startups in 2021 and demand for remote tech workers in more mature markets are all factors attributed to the rising awareness of Africa’s software development talent. And, of course, there was the COVID19 pandemic.
Since the beginning of the pandemic, working from home has won widespread acceptance worldwide. According to a Gallup study, between October 2020 and April 2021, 52 percent of all workers and 72 percent of office-based workers in the United States worked from home for all or part of the time, while the number of remote workers in Europe increased from 5% to 12.3%.
In Africa, too, organizations and businesses have had to review their practices to accommodate remote working -but this has happened at a slower pace. A study conducted during the early stages of the pandemic estimated that by June 2021, half of South Africans would work from home full-time. Currently, 42% of African employees work remotely at least once a day a week. In Nigeria, remote working vacancies increased steadily between 2020 and 2021.
Africa currently has a population of 1.37 billion, and this is projected to nearly double by 2050. It also has the world’s largest and youngest workforce (almost 60% of its population is under the age 25), with over 250 million of its youth unemployed. Future employment is likely to depend to a great degree on digital technology. Globally, 75% of jobs will require advanced digital skills by 2030. In addition, a research report by International Finance Corporation (IFC) estimates that by 2030, 230 million jobs in Sub-Saharan Africa will require digital skills, presenting a $130 billion opportunity for investors and education providers to train the future workforce. Meanwhile various sectors spanning from transportation, supply chains to healthcare will need skilled workers in digital. The health tech industry in Africa is expected to reach a revenue growth of 23.08% and a market value of over $11 billion by 2025.
Moreover African countries will need to invest in digital skills -to seize the opportunities available in the era of remote working- and developing skills in the population -from digital literacy to financial and soft skills- as well as improving digital access. The continent needs a strategy to ensure that the world’s youngest and fastest-growing continent, with millions of young people preparing for the future of work, is ready to attract jobs from Asia, Europe and the United States.