Unemployment in Africa to rise by 5% in 2020
Africa has experienced high and continuous economic growth in the past decade, creating a pathway to 3% growth y-o-y over the next 5 years. In spite of Africa’s relatively strong economic growth performance over the past decade, many countries in the continent are grappling with several development challenges, with high unemployment rates being one of many.
Based on a report released by the International Labour Organization (ILO), youth unemployment rate in Africa is expected to exceed 30% this year, and young people will continue to be 3.5 times more likely than adults to be unemployed. Our experts at VIZON Research believe there is no unique determinant of the youth employment challenge in the African region. Rather, a combination of factors contributes to compound a situation that has become a top political priority for the region.
Data shows that over 35% of the total working-age population of the continent does not participate in the labour market. Regionally, sub-Saharan Africa has a lower unemployment rate, compared to Northern Africa.
According to the ILO, unemployment rates in sub-Saharan Africa remain relatively low because the vast majority of employable active youth must work to earn a living. However, these youth regularly suffer from low pay as well as poor working conditions. Our analysts at VIZON Research state that of the 38.1% estimated total working poor in sub-Saharan Africa, young people account for 23.5%. While in North Africa, unemployment rates (among a generally more educated labour force) are quite high at 23.8% estimated in 2012, with a 3% point increase between 2010 and 2011 and a steady rise since 2007, and projected to remain high over the next five years.
In 2018, Nigeria, the continent’s second largest economy, unemployment rate increased to 23.1% in the third quarter of 2018 from 22.7% in the second quarter of 2018. The total number of people out of work in South Africa reduced by about 50%, while unemployment in Kenya decreased to a record low of 9.3% in 2018 from 11.5% in 2017.
According to ILO, many workers in Africa find themselves having to take unattractive jobs that are characterized by low pay, and little or no access to social protection and rights. This leads to a very high share of insecure employment, constituting almost 90% of total employment in Africa. At 94.9%, underemployment is the main form of employment for African youth.
This leads to the question, what is in store for the youth? Analysts and experts at VIZON Research forecast that in 2020, Nigeria will experience the most change in unemployment rate, as it increased continuously through Q3 of 2018 to Q3 of 2019.
Optimistic analysts forecast that although countries like Nigeria may see an increase in unemployment rates, other countries could experience a decrease in youth unemployment, given government policies and legislation are passed to encourage SMEs, agriculture and investors. On the flip side, The World Bank forecasts there will be an overall increase in the number of citizens in countries across Africa. Niger is forecast to remain the country with the least unemployment rate, with Nigeria closely contending for top spot with the Democratic Republic of Congo at a 36% rate against its 30%.
All over Africa a new wave of industrialists and entrepreneurs have been emerging. At VIZON Research, we credit this emergence to the adoption of new technology and globalisation across countries in Africa.