Outlook

Africa´s economies have rebounded from the slump which had been caused by the global recession. In 2010, Africa´s average rate of growth amounted to 4.9%, up from 3.1% in 2009. The political events in North Africa are likely to depress the continent’s growth to 3.7% in 2011. However, this forecast is surrounded by considerable uncertainty. Risks are related to the global economy, notably the impact of the earthquake and nuclear crisis in Japan, and to Africa, in particular the development in Libya and Côte d´Ivoire and how this affects neighbouring countries. With the assumption that economic normality returns in these countries, Africa´s average growth is expected to accelerate to 5.8% in 2012. The current economic recovery in Africa is likely to reduce the cyclical component of unemployment, but structural unemployment remains high in many countries.

In North Africa, where economic activity has been disrupted by the political upheavals, unemployment is likely to further increase in 2011. Youth unemployment has long been a major problem in North Africa (but also in many other African countries) and contributed to the political unrest which led to the overthrow of governments in Tunisia and Egypt. Labour markets have not been flexible enough to absorb the growing supply of young workers. Given Africa´s rapidly growing population, the demographic pressure on labour markets will continue in many African countries. But in North Africa and Southern Africa the demographic pressure on labour markets will ease as the youth population is projected to remain close to current levels.

A comprehensive approach is needed to address the problem of unemployment in general and of youth unemployment in particular. Improvements are needed both on the supply and the demand side of labour markets. More needs to be done to improve the quality of labour supply so that it better matches the skills required by employers. This also refers to university graduates who are vulnerable to unemployment if their skills do not match job requirements. At the same time labour demand needs to be boosted by further improving framework conditions for economic growth in general and for private sector activity in particular, including through the creation of new firms.