Africa will add 122 million people to its potential labour force by 2020 and by 2035 the continent’s labour force will be larger than that of any nation, including China or India, according to a report by McKinsey Global Institute.

 It says Africa has the potential to create between 54 million and 72 million more stable wage-paying jobs by 2020, with extensive growth coming from the manufacturing, agriculture, retail and hospitality sectors.

This would raise the share of workers with wage-paying jobs from 28 percent to between 32 percent and 36 percent by 2020. But it will require focused interventions to achieve the upper target, the authors argue.

“This would be a significant achievement that would lift millions out of poverty and raise living standards for Africa’s emerging consumer class, entrenching economic growth,” McKinsey says.

The report, titled “Africa at Work: Job creation and inclusive growth”, was launched yesterday at the Discovery Invest leadership summit, where former UK prime minister Tony Blair was one of the speakers.

Co-author of the report David Fine said: “Policymakers must focus on growth in jobs, not just gross domestic product. The key is to target reforms to unleash growth in those sub-sectors that have comparative advantage and the greatest potential to create jobs, invest in them end to end, and create a business environment conducive to growth.”

He said this could be done by selecting labour-intensive sectors in which a country could build a competitive advantage.

It entailed creating incentives for financing companies in the target sector and opening up to foreign investors; building the required infrastructure along the entire value chain; removing the impediments to investment and job creation; streamlining regulations; and ensuring competition.

The country should also ensure workers acquired the skills and job experience that matched employer needs.

South Africa was singled out in the study for its macroeconomic conditions and instability; limited access to financing; and high costs to operate, excluding wages.

In the continent’s most diversified economies, such as South Africa, Egypt and Morocco, the number of wage-paying jobs could grow faster than the number of entrants to the labour force over the next 10 years.

The report says the continent’s workforce is more educated and is employed in a more diverse of sectors than is commonly believed.

“Just 10 years ago, only 32 percent of Africans had secondary or tertiary education, but by 2020, that number will rise to 48 percent. Worker skills are not seen by business leaders as the most prominent obstacle to job creation in Africa today.

“The challenge for stakeholders will be to create opportunities for individuals to gain work experience and to build more practical vocational and tertiary programmes that develop the skills needed by business,” the study adds.

The research includes quantative modelling of national employment trends, a survey of more than 1 300 firms in five African countries, and interviews with dozens of firms and African government leaders.

Source : iol.co.za