December 12th, 2018

Youth employment and the private sector in Africa

Published by Institute of Development Studies (IDS),

This issue of the IDS Bulletin focuses on youth employment and the role of the private sector. Around the world, policy actors worry about youth unemployment and underemployment. A dominant policy approach to youth unemployment and underemployment has been the funding of skills-building programmes that seek to enhance the employability of young jobseekers.  This approach implies that Africa’s youth employment challenge is primarily a problem stemming from the unemployability of young people, rather than a problem of too few jobs. Economic growth to date has, however, not contributed significantly to the creation of formal jobs in the private sector. In the low- and lower-middle-income countries of sub-Saharan Africa, 50 per cent of formal wage jobs are still in the public sector. Therefore, the private sector has an important role to play in economic transformation and in  addressing youth unemployment. Policy actors are becoming more aware of the shortcomings of skills-building interventions, and attention is shifting to focus on how to promote productivity, boost the private sector, and generate the kind of growth that could create jobs. While policymakers have endorsed the role of the private sector as a job generator, it remains unclear whether, and under what conditions, the formal private sector generates enough and decent jobs. Empirical research on youth employment in the private sector is sparse. This IDS Bulletin begins to fill that gap. The articles here have been authored by young African scholars from the Matasa Fellows Network, convened by the Institute of Development Studies (IDS) in collaboration with Mastercard Foundation. These early-career academics from Ethiopia, Ghana, Kenya, Nigeria, Uganda, and Zimbabwe were selected to consider the role that could be played by the formal private sector in job creation in Africa. Case studies come from their respective countries. While some aspects of the youth employment challenge are common to all six countries, the local contexts and situations are unique and sectoral. This IDS Bulletin explores the scope of research and policy challenges in three specific areas: agribusiness and youth employment; skills gaps and youth employability; and youth employment in fragile and conflict-affected settings. The articles demonstrate the importance of effective policy measures to ensure that private sector growth creates sufficient numbers of decent, secure jobs to provide employment to African youth. Overall, the articles in this IDS Bulletin underline the complexities of each country, reminding us that claims about the private sector’s role in job creation are never straightforward, and that discussions need to be based on specific and contextualised understandings of what the private sector is, the nature of the jobs it creates, and its potential contribution to the economy and the livelihood opportunities of young people.

Three of the articles deal with agribusinesses and agricultural value chains:

Ethiopia’s agricultural transformation: agribusiness’ contribution to reducing youth unemployment. The article tracks the movement of labour from subsistence or small-scale family farming into agribusiness enterprises, as well as into the manufacturing and service sectors.

Labour casualisation and youth employment in Ghana’s formal private sector. This article uses a case study of the Blue Skies company, a processor and exporter of fruit products, to consider
the connections between private sector growth, youth employment, and labour casualisation in Ghana.

Uganda’s national youth policy and job creation for youth. The article scrutinises Uganda’s Youth Livelihood Programme and Youth Livelihood Fund, which are intended to support youth enterprise and job creation by extending grants to small groups of young entrepreneurs, to start small businesses that are expected to grow and provide employment, particularly focused on the maize value chain in Uganda.


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