The challenge of reducing youth unemployment

While the current economic recovery is likely to reduce the cyclical component of unemployment in Africa, structural unemployment nevertheless 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 become a major problem in north Africa and contributed to political unrest, which led to the overthrow of governments in Tunisia and Egypt. According to a recent study by the International Labour Office (ILO), the youth unemployment rate in north Africa amounted to 23.7% in 2009 (down from 26.5% in 1998), and it is estimated to have remained at around the same level in 2010 (ILO, 2010). This is twice as high as in sub‑Saharan Africa, where the youth unemployment rate was 11.9% in 2009, down from 13.5% in 1998 (ILO, 2010).

The relatively low unemployment rate of the youth in sub‑Saharan Africa as recorded in this ILO study is somewhat surprising. As it is very difficult to get reliable labour market data, part of the relatively low rate may be due to statistical problems. However, given high poverty levels and lack of better alternatives in the labour market and education in many of these countries, the relatively low unemployment rate also reflects people’s need to survive by accepting any kind of work, including indecent jobs (ILO, 2010). Another reason for the relatively low unemployment rate is that people have given up seeking employment due to lack of opportunities and are not counted as unemployed as they are not actively looking for a job.

In parts of Africa, and notably in the north, labour markets have not been flexible enough to absorb the growing supply of young workers. Given Africa´s rapidly growing population, the pressure on labour markets continues to increase. Over the past decade, Africa´s population increased by over 217 million to more than one billion. One‑fifth of the population are at age 15-25 and thus at the age of entering the labour market and looking for a job. Both total population and youth population increased by 2 %, or 2.3% per year from 2000 to 2010. During the current decade, Africa´s population is projected to further increase by more than 23% (2. % per year), and the youth population by almost 20% (1.8% per year). While in eastern, central, and western Africa demographic pressures on labour markets continue, in north Africa and southern Africa, where population growth is more moderate, the youth population will stop rising and remain close to current levels (see Table 1.2).

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, with policies depending on country specifics. In many countries, more needs to be done to improve the quality of labour supply so that it better matches the skills required by firms. 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 conditions for economic growth in general and for private sector activity in particular, including through the creation of new firms.