The Clock is Ticking on Sub-Saharan Africa’s Urgent Job Creation Challenge

As the rest of the world grapples with aging populations, Africa’s population is booming. By 2030, half of all new entrants into the global labor force will come from sub-Saharan Africa, requiring the creation of up to 15 million new jobs annually.

As the Chart of the Week shows, this challenge is particularly acute in fragile, conflict-affected, and low-income economies. They account for nearly 80 percent of the region’s annual job creation needs, but to date have struggled the most to create jobs.

These economies have high fertility rates, with youth populations yet to peak. For example, Niger has a population of 26 million people and a youth population share that is not expected to peak until 2058—the country will need to create 650,000 new jobs annually for the next 30 years. In contrast, many middle-income countries like Botswana, Ghana, Namibia, and Mauritius have seen their youth shares of populations peak already and will face less severe job creation pressures.

Harnessing Africa’s booming population growth potential requires generating vast numbers of productive, quality jobs that provide above-subsistence-level income, whether in formal roles or self-employment.

There are three main challenges to creating enough good jobs, but policymakers have the tools at their disposal to make a difference.

• Shifting informal jobs from a trap to a stepping-stone. Targeted policies include boosting productivity in the informal sector through well matched skills training, better access to finance, and policies that encourage transitioning to formal employment. It is valuable to create labor market programs that help young people, especially women who face additional barriers, enter the workforce, ensuring they have the tools to succeed.

• Creating conditions that are conducive to jobs growth in high-productivity sectors like modern services and manufacturing. Given limited public finances, governments can prioritize measures that benefit multiple sectors, such as improving market competition and making value-for-money infrastructure investments. They should be cautious with industrial policies that target specific sectors, as they can be expensive, distortionary, and pose corruption risks.

• Breaking down barriers to private business growth. Prioritizing important infrastructure like electricity, internet, roads, and affordable public transport can ease the flow of goods and services. Cutting red tape and curbing corruption will also help companies grow. Attracting more foreign direct investment and developing local capital markets can make more financing available. And strengthening regional integration and trade can expand markets. 

The international community has much to gain from thriving employment in sub-Saharan Africa. Not only is robust jobs growth good for the countries and the people of the region, but it will also provide an engine of growth, consumption and investment for the global economy. Failure could exacerbate poverty, fuel instability and drive migration, while success can unlock prosperity for both Africa and the globe. Policymakers must strive for meaningful change that will create a path for millions of people toward a brighter jobs future.

—This blog is based on an analytical note included in the October 2024 Regional Economic Outlook for Sub-Saharan Africa, The Clock is Ticking on Sub-Saharan Africa’s Urgent Job Creation Challenge, by Wenjie Chen, Khushboo Khandelwal, Athene Laws, Faten Saliba, Can Sever and Luc Tucker of the IMF’s African Department. For more, see the Analytical Corner presentation by Athene Laws and Faten Saliba during the October 2024 Annual Meetings.