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Growth Sectors for Youth Employment (GSYE) is an African Economic Research Consortium (AERC) collaborative research that is seeking to provide research evidence on which economic sectors have the potential to significantly create employment for youth. The project was commissioned by INCLUDE, with support from the Netherlands Ministry of Foreign Affairs. The project is implemented by AERC in conjunction with the Economic Research Forum (ERF) and the Overseas Development Institute (ODI). The project aims to provide research evidence on the economic sectors with the highest multipliers and potential to create employment opportunities for young people in the continent.

The objectives of the project are to:

  1. identify promising economic sectors or value chains for job creation for young men and women in selected countries in Africa
  2. identify the country-specific conditions needed for the local and foreign private sectors to invest in these sectors or value chains
  3. identify the country-specific actors that are needed to create these conditions that enhance or reduce investment security
  4. identify ways to promote equal access and opportunity for youth to these new sources of work and income, addressing inequality related to gender, socio-economic background, and place of residence

The project is implemented in several phases. The first phase involved the drafting of framework papers needed to draw some general characteristics on decent employment for Africa’s youth. The second phase involved drafting of nine country case studies: Egypt, Ethiopia, Kenya, Mali, Mozambique, Nigeria, Senegal, Tunisia and Uganda. Country case studies will help in the identification and explanation of nuances and peculiarities of these countries. During the final-review workshop held in late January 2022, the country case studies researchers presented their final draft reports.

The following are some key findings from selected country case studies:

Tunisia; growth in value-added per-capita between 2011 and 2018 was “jobless growth” in the sense that growth was not matched by satisfactory job creation. Job creation was driven by increased productivity and participation rate rather than an increase in the employment rate. A 1% increase in industrial output generates twice as much employment as the services sector for the people of the working-age, while a 1% increase in service output generates twice as much employment as industry for youth aged between 15 to 25 years. The manufacturing sector remains trapped by a misallocation of resources in such a way that less productive firms receive a large share of resources. It is evident that the agro-food sector has the highest average of aggregate productivity. This is followed by the chemical sector while the textile and clothing sector has the lowest aggregate productivity. The within-firm and between-firm components contribute negatively to labour productivity growth. This shows a weakness in firms improving performance. The negative contribution of the between-firm effects suggests a lack of reallocation of resources from the less to more productive firms.

Uganda; an increase in demand worth 10 billion Uganda shillings would generate 3,502 jobs in the agriculture sector, 2,291 jobs in the service sector and 2,071 jobs in the industry. For the jobs created in agriculture, 1,428 jobs are indirect jobs generated through backward and forward linkages. In general, the agriculture sector would generate more jobs for youths and women. This is followed by the service sector and lastly the industrial sector. At the sub-sector level, cash crops, agro-processing, wholesale, retail trade, tourism and transport services, would generate more jobs for the youth and women.

Nigeria; it has a comparative advantage in products such as cocoa, fuelwood, wood in the rough, leather and natural rubber. Crops, industrial and trade clusters include Kadawa tomato cluster Kano; Omor rice cluster Anambra; Computer village in Otigba (Lagos); leather tannery in Kano. Proper harnessing of the products and the various sub-sectors in which these clusters exist is likely to contribute to massive youth employment creation. Employment elasticity ranges from 0.056 to 0.734 – the highest contributor is from the financial services sector and the manufacturing sector is the least contributor to employment growth intensity. The main constraints to developing sectors with potential for job creation include access to finance, power supply, corruption, high taxation and policy inconsistency.

Kenya; agriculture, transport; trade, construction and education are sectors with the highest potential to create youth employment. Activities with high potential to create jobs include livestock, vegetables (horticulture), rice production, textile and footwear production, and hotels and restaurants. The sectors of the economy are interdependent in the sense that an expansion in one sector has backward and forward linkages with other sectors. Thus, there is the need to adopt a comprehensive multisectoral approach in job creation strategy for the country. Since economic activities vary across counties, there is need to stimulate activities where each County and economic bloc has comparative advantage to ensure sustained job creation for the youth.

Egypt; industries with an employment-generating potential for youth are agricultural, extraction and mining, manufacturing, and services activities. The highest employment multipliers in the manufacturing sector are found in the food products; basic metals; motor vehicles; paper products; non-metallic mineral products; beverages; wearing apparel; coke and refined petroleum products. Total and youth employment have positive spatial dependence. Specifically, there is a clustering of total and youth employment among governorates of the regions of Greater Cairo, the Delta, and Upper Egypt. Majority of high-ranking employment multiplier industries and feeding industries along their value chains are located in these regions, and in geographically close regions.

Ethiopia; if supply is elastic, a demand stimulus would have the highest output effect on the construction and trade sectors. This is followed by hotels, restaurants, transport, forestry, public administration and animal husbandry (cattle) and cash crops, excluding coffee, in the agriculture sectors have the highest multiplier effect. The effect on the construction and trade sectors is significantly higher than the rest – with four times larger than the median value. While the construction sector is one of the sectors with significant potential for job creation, it does not create jobs like that of manufacturing. The trade sector is not among the top sub-sectors with significant potential for job creation in the service sector either.

Senegal; the majority of jobs held by youth are concentrated in agriculture, trade and manufacturing sectors. However, most youth in these sectors work fewer hours than the norm and wish to do more, and have insufficient income inducing them to seek additional work. Less than 50% of the youth in these sectors have a regular job and benefit from a social security system as part of their employment. Youth working in the trade sector are more likely to have higher quality jobs, suggesting that the sector offers better employment opportunities for youth than other sectors. Employment support programmes allow young beneficiaries to access higher quality jobs than non-beneficiaries. These higher quality jobs are mainly in the service and industrial sectors. This attests to the precarious situation of young men and women in the labour market, and the need to increase employment support programmes to improve employability of young people in sectors offering quality jobs.

Mozambique; the period 2010 to 2018 was characterized by a fall in agricultural employment elasticity accompanied by a fall in employment. Apart from agriculture, wholesale, retail and tourism, and service sectors, other sectors registered a significant increase in employment elasticities. Manufacturing, mining, transport and communication, and civil construction have employment elasticity exceeding unity, characterized as employment generating sectors, dynamic with increasing productivity. This suggests that these sectors are potential employment generators. Thus, special attention should be accorded to these activities to promote youth employment.

 

Upcoming activities

During the first two weeks of March 2022, the country case studies teams will disseminate research findings in the in-country dissemination and policy dialogue workshops. Additionally, a regional policy dialogue workshop will be held on 28th March 2022 to disseminate country case studies research findings. The findings of this project will be documented in form of framework papers, country case studies papers, synthesis papers, policy briefs, working papers and in an edited volume.

 

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  1. Great Job on Include

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