Addressing Africa’s Skills Mismatch

Addressing Africa’s Skills Mismatch

By Hanan Morsy

While much of the world struggles with rapid population aging, Africa is experiencing the opposite trend.

With 60% of the continent’s population under the age of 25,
African leaders must ensure not only that a sufficient number of quality jobs
are available, but also that young people receive the education and training
necessary to fill these positions. And when it comes to the latter imperative,
much action is needed.

Mismatches between available jobs and the skills and
qualifications of the workforce are widespread across Africa. According to a
recent African Development Bank study of ten countries – Benin, Republic of
Congo, Egypt, Liberia, Madagascar, Malawi, Tanzania, Togo, Uganda, and Zambia –
a majority of young Africans are undereducated for their jobs, and nearly
one-third are under-skilled. Moreover, young people who are over-skilled or
overeducated for their current positions are underpaid and frustrated by their
limited career opportunities and wasted or deteriorating talents.

Undereducated youth do enjoy a wage premium, but it comes at
the cost of job satisfaction. The underskilled suffer from the pressure of
trying to keep up with the requirements of their job, and from the constant
fear of losing it. Eventually, underskilled youth suffer “scarring,” or lasting
damage to their economic circumstances and prospects. They accept mismatched
jobs out of desperation rather than waiting, unemployed, for more suitable
positions that may never come.

Given the magnitude and persistence of job-skill mismatches,
and their adverse effects on individuals and economies, reducing them should be
a top priority for African governments. The first step is to improve access to
education.

Though many African countries have made significant progress
in boosting education rates in recent years, many young people, especially
girls and rural dwellers, receive only limited schooling, or none at all. Furthermore,
even 38% of employed youth never attended school for economic reasons, and
another 12% because there was no school nearby.

Governments can make a difference by investing in
educational infrastructure: building new schools and renovating old ones,
improving working conditions for teachers, and upgrading school equipment,
including information and computer technology. At the same time, they should
eliminate primary-school fees, limit the costs of secondary and tertiary
education, and finance scholarship programs.

African governments must also do a better job of supporting
young people in their transition from education to employment. As it stands,
very few young Africans, employed or not, receive job-seeking advice from the
government or employment agencies.

To improve young workers’ prospects, governments should help
to disseminate information on available jobs, and create incentives (such as
tax breaks or subsidies) for firms to offer internships and apprenticeships to
graduates. Where such arrangements already exist, governments should strengthen
their impact by broadening their reach and mandate, advertising them more
widely, and investing in monitoring and impact measurement.

Finally, for such programs to work, young graduates need the
knowledge and skills that the labor market demands. African employers often
complain about the difficulty of finding candidates with specialized training
in the so-called STEM disciplines (science, technology, engineering, and math),
as well as complex problem-solving and communication skills. And nearly 40% of
those surveyed did not consider their education useful in finding employment.

The African Development Bank has taken the lead in creating
opportunities for African youth in ICT by providing financing to Carnegie
Mellon University Africa in Rwanda, which was established in 2011 to serve as a
center of excellence and a regional ICT hub for East Africa. This institution,
in collaboration with the Rwandan government, has established an innovation
incubator to help students create their own businesses.

Addressing the mismatch problem will require African
governments to foster more demand-driven, forward-looking education and skills
training. For example, they can create forums for companies to communicate
their needs regularly to educational and training institutions, which would
then adapt curricula accordingly. The result would be a new generation of
attractive local candidates, thereby mitigating a severe constraint on firms’
ability to expand output and create jobs.

Africa’s youth bulge is a major asset, with the potential to drive economic growth and development for decades to come. But if the continent’s young people are unproductive, frustrated, and desperate, it could become a major liability that undermines economic prosperity, social progress, and even political stability. The outcome in the coming years will depend on the policies that African governments adopt now.

Hanan Morsy– is Director
of the African Development Bank’s Macroeconomic Policy, Forecasting, and
Research Department.