Vera Songwe Says Innovation Key to Creating Much-Needed Jobs in Africa

ADDIS ABABA, Ethiopia, March 5, 2019/ — Africa has to innovate if the continent is to create sufficient decent jobs for its growing youthful population, Economic Commission for Africa’s (ECA) Executive Secretary, Vera Songwe, said Tuesday.

Speaking in Addis Ababa at a joint ECA-World Bank roundtable on jobs and economic transformation, Ms. Songwe said with Africa’s rising population, estimated to increase to 1.7 billion by 2030, a growth rate of more than 8 per cent per annum is needed to create at least 120 million jobs for the youth entering the labour market between now and 2030.

“The question around jobs and economic transformation is one that almost every African leader is worrying about,” she said, adding immediate action on all fronts was imperative to address the continent’s jobs challenge in a structural way.

“Africa is growing again but we need to do better and more. It is disheartening every day to see that more Africans are falling into poverty. That is why it is imperative that we are having this discussion of creating jobs on the continent,” Ms. Songwe added.

Innovation, she said, is a major force for economic growth and development, which is crucial for the continent to create enough jobs for its youth in particular.

“Digitalization is, now more than ever, playing an important role in Africa’s economic transformation and has the potential to open opportunities to labour markets, moving beyond markets through the free movement of people,” she said, adding digitalization was transforming how businesses operate, moving individuals from the informal sector to the formal sector.

Ms. Songwe also spoke about the need for African economies to stimulate adequate industrialization through increased intra African trade.

“As digitalization and trade create new opportunities for economic transformation through jobs, it will be important for policy makers to recalibrate policies towards strengthening human capital. Policies geared towards a highly skilled, knowledgeable and healthier population are pertinent in ensuring prosperity and thereby reducing poverty on the continent,” she said.

For his part, Akihiko Nishio, the Vice President for Development Finance at the World Bank, said it was fitting that they were discussing jobs and economic transformation in Ethiopia.

Having visited Ethiopia’s Bole-Lemi Industrial Park the previous day, he said; “It was impressive to see how the Ethiopian experience shows that ambitious, forward-looking and well executed initiatives can have a big impact in supporting transformation and job creation.”

“For most developing countries and development institutions like ours, the need for more and better jobs remains a top development priority. Jobs are a source of income, a means of raising productivity, and for meeting the aspirations of hundreds of millions of people,” said Mr. Nishio.

The challenges are daunting, he said, adding Africa will require that at least 15 million jobs be created each year to keep pace with its demographics.

“Failing to deliver good jobs for the growing youth population not only risks squandering the demographic dividend, but raises significant social risks, contributing to fragility and driving young people to migrate abroad in search of better opportunities,” said Mr. Nishio.

He said tackling the jobs challenge requires economic transformation.

“It means moving workers from lower to higher productivity activities led by a vibrant private sector and supported by public policy actions. This does not happen overnight, but requires committed leadership, sustained investments and efforts, and concerted support from all partners,” added Mr. Nishio.

This is why since 2017, he said, with support from International Development Association donors and borrowers, the World Bank adopted Jobs and Economic Transformation (JET) as a special theme under IDA18 to make its support for some of the world’s poorest countries more focused and deliberate.

The joint workshop focused on three topical areas: digital transformation, trade and global value chains, and human capital for jobs.