Banking on the people of Africa: Improving human and social development

The session “Banking on the people of Africa: Improving human and social development” discussed the lessons from evaluations of AfDB projects particularly geared toward human and social development. The panel debated whether Africa's bottom-heavy demographic pyramid was a dividend and whether it could support inclusive growth, youth entrepreneurship, and employment perspectives in Africa.

Mouhamed Gueye, Manager for Human Capital Youth and Skills Development, AfDB, moderated the session. He told participants that Africa's growth and resilience depend on the accumulation of human capital and on substantial and intelligent investments in health, education, and skills development, as well as in innovation, in order to well prepare a productive African youth. He noted that positive Gross Domestic Product (GDP) numbers on the continent hide a decade of jobless growth. The average employment elasticity (i.e., the ability of an economy to generate employment opportunities for its population as a percent of its growth) in African countries has remained low at 0.41 (2000-2014), reflecting the lack of employment and productivity growth. Mr. Gueye added that in any society, the lack of jobs and opportunities for the young workforce is not only a source of fragility, but it also represents a brake on the resilience that Africa must build.
In a context where climate change and the COVID-19 pandemic have plunged many of our countries into an unprecedented economic crisis, with more than one in five young people in Africa not in employment, education or training (NEET) in 2020, what can be done to provide Africa with resilient human capital on which the continent can achieve social and economic transformation?"continued Mr. Gueye.

David Huysman, Technical Specialist at the International Labour Organization (ILO), provided a keynote presentation that focused on lessons learned from the impact of the multiple global crises that young African people are facing, affecting labor market prospects and the inequality gap. 
Several sectors and demographic groups were hit hard by the COVID-19 crisis – among them women, youth, and migrant workers, along with SMEs and many workers in the informal economy. According to the 2022 ILO World Economic and Social Outlook report, the pandemic has reversed a lot of the progress in poverty reduction achieved in the last decades. The region's GDP is estimated to have declined by 1.9% in 2020, with significant differences across sub-regions and countries in Africa. On the continent, the pandemic has resulted in a deficit of 15 million jobs, either lost directly or not created because of a lack of economic growth. Labor underutilization increased, as well as working poverty, while income declined. 
"The most recent ILO estimates show that in 2020, nearly 5 million additional workers and their households fell below the extreme poverty line," Mr. Huysman told participants. Many young people simply cannot afford to be unemployed and have a daily need to engage in any income-generating activities. Most of these  jobs are in the informal economy, do not come with any social protection, are often insecure and at times unsafe, and, in many cases, do not offer young men and women personal growth opportunities. The pandemic has aggravated the vulnerabilities of young people in labor markets. Africa's growth and employment patterns have not created enough productive employment opportunities. The ongoing crisis has exacerbated inequalities, and the gap is deepening as the labor force grows. The full impact of the crisis on youth is not yet known due to data challenges. 
Noting that, Mr. Huysman said that governments should ensure that their youth is a resource for the continent and not a source of instability. "Young African men and women need to play an active role in shaping their future, and the development partners, Bank evaluation professionals, and policymakers have a moral obligation to support an enabling environment and to guarantee them these opportunities while promoting resilience, providing anti-fragility measures, and financing youth-specific initiatives to boost entrepreneurship or/and to upscale their skills in the digital economy," Mr. Huysman said.
The ILO’s global accelerator on jobs in social protection for just transition aims at channeling national and international, private and public investment into social protection for the 4 billion people who fall outside any existing coverage and to create at least 400 million decent jobs. Another example is the ILO/AfDB project consisting of developing a jobs market  for the Bank, and hopefully later for each partner country. This job market envisions enhancing employment impact by integrating employment considerations into the Bank’s operations and thus making sure that all Bank financial instruments contribute to decent job creation.

Panel discussion: Evaluative evidence on inclusive growth, youth entrepreneurship, and employment perspectives in Africa
Mouhamed Gueye, as moderator, introduced the panelists and kicked off the discussions with questions for the panelists:
What are evaluations telling us about interventions by countries and development partners to foster inclusive growth, youth entrepreneurship, and employment? 
Chido Cleopatra Mpemba, African Union Special Envoy on Youth:
Youth employment has been a global challenge for many years, and as evaluation reports suggest, this situation is likely to be higher in the years ahead. African governments and Development Partners  must therefore anticipate the African population growth and capacitate young people to build a brighter future, and work closely with governments, policymakers, the private sector, and young people. It will take a holistic view of the private and public sectors with the young people themselves. 
The ILO 2020-21 evaluative lessons on how to build a better future for work after the pandemic indicates that new priorities and drivers for change are needed, and these priorities include employment of youth and women and the informally employed. 
Tapera Muzira, Coordinator of the Jobs for Youth in Africa, AfDB said that the issue of data and information is critical, so there is a need to invest in labor market systems that give us the power to make the right decisions regarding targeted policies and programs. It is important to note that young people are not a problem, and neither are women. They are an asset for the continent, but only when the right policies and investments accrue dividends. If there are no investments, then you get negative dividends, thus losing the opportunity. 

Evaluators want to measure the number of jobs, but what about the quality of jobs ?
Youth should be co-opted to be part of the narrative about what constitutes a quality/decent job. Evaluations should go beyond measuring numbers and focus on what is happening in the wider contexts. There is a need to see shifts in policies, and mindsets, so evaluators should consider the systemic issues to look out for when it comes to employment – these could be around resilience, inclusion, and/or equity. 
What are we learning about the most effective policies, strategies, and interventions to harness the demographic dividend? 
Mr. Muzira: Evaluations show that there is a need to take an integrated approach when designing programs and projects. Sporadic individual projects  targeting a few people in a particular locality cannot make a difference to creating sustainable opportunities for youth across Africa. Additionally, we needsa human resources protocol that allows anyone to work anywhere in Africa, to harness talent where it is needed, thereby making sure employment opportunities are not lost to other regions of the world where employment is better organized. There is also a need to increase local investment, local content, value chains, and production functions. We need to add value to the minerals and agricultural produce and take advantage of the African Continental Free Trade Area. 
Ms. Mpemba: Youth inclusion is an ingredient of effectiveness. Evaluations continue to highlight that the most effective policies are inclusive policies. As young people must be at the core of Africa's economic growth and inclusiveness, African youth should take a lead role in harnessing the demographic dividend. They should be co-opted to lead from the front. 
The African Union recently launched the Energize Africa Initiative, a platform of youth professionals and organizations seeking a holistic approach to the youth issue. Youth-centered policies and interventions, for example the AfDB's Jobs for Youth Strategy or skills training initiatives, coupled with informed market realities, will expand employment opportunities for youth.  

To what extent are the youth reaping new opportunities created by digitalization and technological advancements? 
Mr. Kamwendo: A MasterCard Study recently concluded in 7 countries in East and West Africa focusing on the effects of COVID-19 on the youth showed that technological advancements and digitalization have contributed to growth and have been job drivers for employment and job opportunities for youth. During COVID-19, digitalization gave people access to new access to skills and training opportunities. In addition, there was evidence of growth in other skills like coding, business-process outsourcing, and in creative industries, where they sold their products in the digital space.  
The challenges to reaping new opportunities include access to and affordability of data and digital devices, and these are still an issue. Smartphone penetration remains low. Young women in sub-Saharan Africa have the least access to digital technology. Evaluations should highlight what systemic shifts need to be addressed to optimize technology and digitization to drive job creation in Africa. Evaluations should also challenge systems, mindsets, and policies that could be barriers to promoting fairness and equity in job access.  

What kind of evidence is available on job creation and what lessons can be drawn from it? 
Ms. Mpemba: Across Africa, accelerator programs have strengthened the entrepreneurial context. For example, the African Continental Free Trade Area allows entrepreneurs to fully realize their business initiatives and create employment once they have access to funding. 
Furthermore, matching the current skills required in the job market with the education system calls for a review of the education sector and the organizations in the private sector to create jobs for the youth and make them more suitable. 

Mr. Gueye wrapped up the session, concluding that “We have to put in place inclusive approaches for creating jobs for youth and accelerate the structural transformation of African economies."