Wednesday, November 13, 2013

Employment and Growth


John Page, a Senior Fellow at the Brookings Institution, points out in a post from this Spring, titled Africa's Jobs Gap, that "Africa Rising" does not necessarily mean Africans are rising. Employment statistics are not encouraging: 
Eighty percent of job seekers find themselves in informal employment, self-employment or family labour. These are not good jobs... 
Africa’s lack of good jobs reflects a feature of the region’s growth often overlooked in accounts of its success: Africa’s economic structure has changed very little. The region’s share of manufacturing in GDP is less than one half of the average for all developing countries, and it is declining. The sources of Africa’s recent growth – improved economic management, strong commodity prices and new discoveries of natural resources – are not job creators. 
While manufacturing is most closely associated with employment-intensive growth, there are also ‘industries without smokestacks’ in agriculture and services that can create good jobs. Investors in these industries, however, do not see Africa as an attractive location. Domestic private investment has remained at about 11 percent of GDP since 1990. This is well below the level needed for rapid structural change. Foreign investment is overwhelmingly in oil, gas and minerals. Industry in Africa has declined as a share of both global production and trade since the 1980s... 
For poor countries the export market is the main source of industrial growth. Africa has had little export success: manufactured exports per person are less than 10 percent of the average for low income countries. Breaking into non-traditional export markets will demand a coordinated set of public investments, policy reforms and institutional innovations more characteristic of Asian than African economies. 

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