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The jobs expected to be available for Africa’s youth from now – 2035

Research predicts that IWOSS will account for 60 percent or more of new jobs in Ghana, Rwanda, Senegal, and South Africa. Image: REUTERS/Paul Carsten

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  • Under 25s are expected to total 50% of Africa’s population by 2050, causing a demand for employment to reduce poverty in the region.
  • It’s predicted that ‘industries without smokestacks’ will account for 60% or more of new jobs in Ghana, Rwanda, Senegal, and South Africa.
  • Notably, IWOSS industries also offer more employment opportunities for women.

Africa’s youth population continues to grow rapidly: In fact, the World Bank predicts that people under the age of 25 are set to comprise 50 percent of the population of sub-Saharan Africa by 2050. Such growth has created now-urgent demand for employment that must be met for Africa to reduce poverty. To examine new strategies for job creation for the region’s youth, the Brookings Africa Growth Initiative (AGI) and its partner think tanks on the continent have been conducting research on how to support promising industries to grow and absorb low-skilled labor.

While export-led manufacturing has historically led to job creation, factors like technological progress and the evolving global marketplace have meant that Africa has not been able to capitalize on the gains from manufacturing that other developing regions have. In response, AGI researchers have identified other sectors, termed “industries without smokestacks” (IWOSS), that share characteristics with traditional manufacturing and thus might play a similar role in driving economic growth and job creation. In short, IWOSS are sectors that are tradable, have high value added per worker relative to average economywide productivity, exhibit capacity for technological change and productivity growth, and show some evidence of scale or agglomeration economies. IWOSS include high-value agribusiness, horticulture, tourism, business services, ICT (information and communication technologies)-enabled services, transport, and logistics—all sectors that are growing at a faster pace and have higher labor productivity than non-IWOSS sectors like agriculture. Notably, different sectors of IWOSS can cater to Africa’s youth, whose education and skills vary widely, with tourism and horticulture largely relying on low-skilled labor while sectors like logistics and ICT require more training.

The case studies for Ghana, Kenya, Senegal, South Africa, and Uganda were published earlier this year, and the recent paper “Addressing youth unemployment in Africa through industries without smokestacks” synthesizes the major findings and trends from those case studies.

Overall, the case studies predict that IWOSS will account for 60 percent or more of new jobs in Ghana, Rwanda, Senegal, and South Africa; however, the share is lower for countries like Kenya and Uganda, which are projected to rely heavily on traditional, “smokestacks” industries to 2035.

More opportunities for women

Notably, IWOSS industries also offer more employment opportunities for women: In fact, the case studies reveal that most IWOSS sub-sectors employ a greater share of women than other sectors of the economy. Within IWOSS, tourism employs the greatest share of women (56.7 percent), while horticulture and export crops follow second at 53.2 percent. Female employees in ICT comprise only 31.7 percent of the sector; according to the authors, this finding indicates a greater need for training in digital skills for young girls and women.

Policy Recommendations

While the job creation potential of IWOSS relies on the fact that most roles do not require higher-level skills, a persistent lack of skills at all levels still holds their promise back. More specifically, the authors find that, for IWOSS firms to grow and create jobs, potential workers must demonstrate soft, digital, and intrapersonal skills, which can be taught through postsecondary education but require input from employers and businesses, as each sector has different demands for the skills required. Countries in the case studies have at least a moderate deficit in all six subcategories of skills: basic, problem-solving, resource management, social, systems, and technical. Notably, Ghana, Kenya, Senegal, South Africa, and Uganda have a substantial deficit in all six skills for agro-processing and tourism, and in horticulture have only a moderate gap in social skills but a severe gap in the rest of the skill subcategories.

At the same time, the authors point out that gaps in necessary skills are not the only constraint IWOSS face, as poor infrastructure—like unreliable power supply and lack of or poorly maintained roads—pose major challenges for IWOSS development. Lack of competition as well as regulatory coordination issues that do not allow for customs and standards to be implemented also pose challenges. Since IWOSS face constraints similar to those of traditional manufacturing, the authors argue that policymakers are not required to choose between promoting IWOSS and manufacturing, thus enabling them to focus on forming multifaceted policies. Key takeaways of the report include the necessity of prioritizing investment in infrastructure (particularly gaps in the reliable supply of electricity), addressing the skills deficit through a demand-led approach between postsecondary education and businesses, and encouraging a competitive business environment. The individual case studies also provide country-specific recommendations for supporting the growth of IWOSS.

This article was published by the World Economic Forum in collaboration with the Brookings Institution. It first appeared here.

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Good Things Come in Threes: after Angola and Ghana, Eni strikes oil in Côte d’Ivoire

Italian major Eni has announced this month a major light oil discovery (40° API) at its Baleine-1X exploration well in block CI-101 offshore Côte d’Ivoire. The company had signed the contract for the block’s license back in March 2017 and operates it with a 90% interest. This marks the third oil discovery by the company this year following Cuica in April offshore Angola and Eban in July offshore Ghana. The Baleine prospect was drilled in water depths of about 1,200m by the Saipem 10,000 drillship and reached a total depth of 3,445m. It discovered oil in two different stratigraphic levels and will now be appraised and evaluated to assess the significant upside potential of the overall structure that extends into block CI-802, another block which was just awarded to Eni back in June 2021. According to Eni, the potential of the discovery can be preliminarily estimated at between 1.5 and 2bn barrels of oil in place and between 1.8 and 2.4 trillion cubic feet (Tcf) of associated gas. “Along with the appraisal programme, Eni and Petroci Holding will also start studies for a fast-track development of the Baleine discovery,” the company said in a statement yesterday. Eni has been increasing its exploration portfolio in Côte d’Ivoire in recent years: it had been awarded Block CI-205 in 2017 and Blocks CI-501 and CI-504 in 2019. It is also struggling to maintain its share of African oil production and has been faced with decreasing output for several years. In Q2 this year, its oil & gas production from sub-Saharan Africa stood at about 293,000 boepd compared with 399,000 boepd in Q2 2019 and 386,000 boepd in Q2 2020. Source: Government of Côte d’Ivoire The opening of a new play concept in Côte d’Ivoire’s sedimentary basin is also very good news for a country where oil production has failed to meet expectations and has been dropping significantly in recent years. Crude oil production had fallen to only 20,690 barrels of oil per day (bopd) in Q1 this year, against a daily average of over 40,000 bopd back in 2016. Most of the oil produced comes from the Baobab deep-water field operated by Canadian Natural Resources (CNRL) where production started in 2005. Côte d’Ivoire remains however a strong gas producing market with good domestic off-take infrastructure from the power sector.

Why Africa’s energy transition is only happening in South Africa

In more ways than one, the concept of energy transition makes no sense for African countries. The energy transition model by which fossil fuels were going to be replaced with renewable energy emerged out of developed countries, where low population growth and few incremental energy needs have paved the way for new planning strategies to reorganise the energy mix towards cleaner sources of electricity generation. For the same reason, the energy transition is mostly happening in countries where total energy supply and energy consumption has stabilised for over a decade. However, African countries are still under development and the continent counts over 600m people without access to electricity. Because of Africa’s continued demographic growth, the number of people without access to power is likely to rise. Lack of industrialisation along with uneven economic development means that Africa is also one of the world’s smallest carbon emitter. From a policy and development perspective, the priority will very much remain on adding as much power generation capacity as possible along with expanding electricity transmission and distribution infrastructure to lift people out of poverty. Before Africa can transition its energy mix, it needs to significantly expand and transform it. In doing so, renewable energy capacity will be growing, but not to the extent where it can replace existing electricity generation facilities. South Africa is the exception to the story. First, because its energy supply has remained more or less the same for a decade; its electricity consumption, for instance, has averaged 230 TWh a year for about ten years now, according to IEA data. South Africa is part of the G20, has started its demographic transition and has a relatively easy access to finance. Second, because well over 80% of the country’s electricity still comes from coal facilities, many of which are aging. A relatively stable electricity supply along with a heavy carbon-emitting electricity mix naturally paved the way for South Africa to transition its energy mix. South Africa’s energy transition strategy The country’s strategy is very much targeted at relying less on coal and more on solar, wind and gas. In fact, its 2019 Integrated Resource Plan (IRP) provides for the decommissioning of over 24 GW of coal power sources within the next 10-30 years. Natural gas will become an energy fuel for the country, especially when it comes to converting some of its diesel and coal facilities. The country notably commissioned several power plants expected to run on gas but currently running on diesel: Ankerling (1,327 MW), Gourikwa (740 MW), Avon (670 MW), and Dedisa (335 MW). In the IRP of 2019, South Africa reiterated a long-standing commitment to natural gas, by reaffirming its ambition to convert the four stations to LNG or natural gas, and commission an additional 3,000 MW of greenfield gas-to-power capacity by 2030. Several such projects are already well advanced, including the conversion of the Ankerling and Gourikwa stations. But the real story of the past few years has been that of wind and solar. South Africa has become an undisputed renewable energy leader on the continent, attracting local and global investors from Europe, China, the Middle East and the Americas into its now famous Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). From 2012 to 2015, South Africa awarded 6.3 GW of renewable energy capacity via windows 1, 2, 3, 3.5 and 4. Thousands of jobs were created, while attracting billions on foreign direct investment. While the projects from Window 4 are just reaching commissioning stage, South Africa just closed its Risk Mitigation IPP Procurement Programme (RMIPPPP), awarding another 2 GW of projects in March 2021. And this is only the beginning for the country’s clean energy sector. The need to ensure reliable and affordable energy supply post Covid-19 has accelerated the timeline of the future REIPPPP windows. Window 5 is currently underway with winners expected to be announced by the end of the year. Meanwhile, Window 6 is expected to be launched this year to announce the winners in May 2022, while Window 7 would be launched in 2022 to that winners are awarded in Q3 of the same year. Finally, South Africa is also planning a storage and gas-specific windows, with the former launched in November this year while the latter would see its request for proposal issued in Q1 2022.