Africa in the news: Politics, security, and wildlife poaching updates
South Sudan’s Machar deposed as head of party; South Africa’s Zuma hospitalized
On Wednesday, the military wing of South Sudanese Vice President Riek Machar’s political party (the Sudan People’s Liberation Movement-in-Opposition) announced that it had deposed him as party head after a three-day meeting of senior officials. The military wing indicated that Machar had “completely failed” to strengthen the party’s position since forming a coalition government with the Sudan People’s Liberation Movement, the party of current President Salva Kiir. In Machar’s place, the military wing named its chief of staff, First Lieutenant General Simon Gatwech Dual, the interim leader of the opposition party. The political reshuffling comes at a time when the world’s youngest country faces its worst hunger crisis since independence.
Elsewhere on the continent, former South African President Jacob Zuma was scheduled to appear in court on August 10 to resume his suspended corruption case, but his appearance is now uncertain after his hospitalization—the cause of which was not disclosed—on Friday following a routine medical appointment. Zuma, currently in jail serving a 15-month unrelated sentence, had been given permission to attend the hearing in person after his lawyers complained that a video-call trial was unconstitutional. Sixteen charges of fraud, graft, and racketeering still face Zuma, whose court appearances have, according to al-Jazeera, incited violence in South Africa that has seen the deaths of at least 337 people.
Ethiopia suspends two aid groups in Tigray region; conflicts continue in Niger, CAR, and Nigeria
On July 30, the Ethiopian government suspended part or all operations of two international aid groups, Doctors Without Borders and the Norwegian Refugee Council, further injuring the hundreds of thousands of civilians facing famine-like conditions in the Tigray region. The Ethiopian government claims that these aid groups were spreading misinformation, did not have appropriate work permits, and were using satellite radio equipment not authorized by the government. United Nations Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator Martin Griffiths rejected the claims, stating that blanket accusations, “need to be backed up by evidence if there is any and, frankly, it’s dangerous.”
Meanwhile, conflict continues in Ethiopia as forces in the Tigray region expand into neighboring regions of Amhara and Afar, forcing around 250,000 people to flee the region. On Thursday, Tigrayan forces took control of a town called Lalibela, located in northern Ethiopia, although with no reported fighting. The town contains 11 monolithic churches constructed out of rock over 900 years ago and a historical holy site for Ethiopian Orthodox Christians as well as a major tourist destination.
Other African nations continue to face internal conflict as well. In southwestern Niger, jihadist rebels attacked a military supply mission on Saturday, killing at least 15 soldiers. In the Central African Republic, rebels from the Funali ethnic group killed six civilians and wounded several others in the village of Mann last Saturday. Russia has sent at least 500 instructors to assist the Central African Republic’s army, but their deployment has been controversial as the U.N. claims that the instructors participate in “indiscriminate killings and lootings”.
Nigeria, too, faces internal conflicts with the separatists of the Indigenous People of Biafra (IPOB). Violence within the southeast region has escalated this year, resulting in at least 127 civilians, gunmen, and security forces dead. Amnesty International blames the government forces, namely the Eastern Security Network, for escalating the violence with arbitrary arrests, ill treatment, and torture of civilians.
Illegal animal and plant trade rising in Nigeria and South Africa
On Wednesday, Nigerian officials seized a substantial amount of pangolin scales, claws, and elephant tusks worth 22 billion naira ($54 million) in a recent attempt to combat the illegal trading of these items. Notably, pangolin has become one of the most trafficked mammals on earth due to the demand of its scales for traditional Chinese medicine. In 2019, according to Reuters, Nigeria became Africa’s staging ground for the illegal trade, with two-thirds of major seizures of the animals coming from the country in 2018, doubling the 2016 number.
In South Africa, rhino poaching has increased as lockdown restrictions have eased. According to South Africa’s Minister of Environment Barbara Creecy, in the first half of 2021 alone, 249 rhinos have been poached in South Africa, leading to a total of 125 arrests. In addition to protecting South Africa’s threatened southern white rhino and endangered black rhino populations, scientists are also trying to save the northern white rhinos from complete extinction. There are only two known living northern white rhinos in the world, both of which are female and living in Kenya.
Also in South Africa, officers from the Stock Theft and Endangered Species Unit arrested an individual smuggling boxes of Conophytums, succulents indigenous to the region, in the latest example of succulent poaching driven by demand particularly from collectors in Korea and China. Poaching has increased during the pandemic, as some plants can sell for thousands of dollars a piece. Poaching of this plant is most prolific in the Northern Cape and Western Cape provinces, which offer dry, arid climates in which succulents grow best. As officials crack down on poaching in these areas, botanists are struggling to deal with what to do with newly confiscated plants, with some facilities receiving about 2,500 plants per week.
A case study comparison of industries without smokestacks in Senegal and Ghana
In collaboration with think tank partners on the continent, the Brookings Africa Growth Initiative team recently published a series of reports examining industries without smokestacks (IWOSS) in various countries in the region. For the purpose of the research, IWOSS activities are defined as those that are tradable, have high value added per worker relative to average economywide productivity, exhibit capacity for technological change and productivity growth, and can absorb large numbers of moderately skilled labor.
The research seeks to widen the policy options for structural change and job growth in Africa, especially among African youth. Indeed, sub-Saharan Africa will need to create 18 million jobs each year until 2035 to accommodate youth market entrants Therefore, the AGI team and its partners have examined the employment creation potential of IWOSS in Africa to assess whether these subsectors can successfully contribute to addressing youth unemployment in the region. As part of the larger study, AGI published case studies examining whether and how IWOSS might improve youth employment prospects in Ghana and Senegal.
In short, both case study teams find that IWOSS sectors will create more jobs in coming years than other sectors. Figure 1 shows the projected share of new jobs created by 2035 by sectoral grouping: Notably, in both Ghana and Senegal, IWOSS sectors are projected to create more than half of new jobs by the year 2035.
Figure 1. Projected share of new jobs created by 2035 by sectoral grouping
Source: Coulibaly, B. and Page, J. Addressing youth unemployment in Africa through industries without smokestacks: A synthesis on prospects, constraints, and policies. (Washington, DC: Brookings Institution, 2021).
While the IWOSS definition includes a number of different sectors, the case study teams identified the subsectors in which their countries have a distinct comparative advantage. In Senegal, the team examined how horticulture, agro-industry, and tourism might generate much-needed jobs for youth. In Ghana, the team examined how agro-processing and tourism could accomplish this important task.
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In Senegal, the research shows that a thriving IWOSS sector can stimulate the economy and provide sustainable opportunities for the ever-growing working-age population; however, before Senegal can reach achieve this goal, it must address specific constraints that affect the business environment throughout the country. In Ghana, the research suggests that the same can be done if the country addresses the regulatory environment in which firms operate. Research also showed that IWOSS sectors in both countries have higher output per worker than non-IWOSS sectors. This higher productivity rate is important because higher productivity can be accompanied by higher wages.
As noted above, the research teams predict that IWOSS sectors will create more than half of the new jobs in these countries by the year 2035. More specifically, in Senegal, the case study authors project that, by 2035, IWOSS sectors will make up 52.8 percent of total employment, versus 3.3 percent from manufacturing and 44.0 percent from all other sectors (Table 1).
Table 1. Projected GDP and labor demand, Senegal
Source: Beye, Dia Gueye, Mbaya, and Mbaye. Employment creation potential labor skills requirements, and skills gaps for young people: A Senegal case study. (Washington, DC: Brookings Institution, 2021).
Similar trends can be seen in Ghana (Table 2). The Ghana team project that, by 2035, IWOSS sectors will make up 53.6 percent of total employment, versus 9.3 percent from manufacturing and 37.1 percent from all other sectors.
Table 2. Projected GDP and labor demand, Ghana
Source: Aryeetey, Baffour, and Turkson. Employment creation potential labor skills requirements, and skills gaps for young people: A Ghana case study. (Washington, DC: Brookings Institution, 2021).
For more a more detailed discussion of IWOSS in Senegal, please see the full case study, COVID update, and summary blog. For more on the Ghana case study, see the full case study and summary blog.
Addressing youth unemployment in Africa through industries without smokestacks: A synthesis on prospects, constraints, and policies
Young people between the ages 15 and 24 constitute 20 percent of sub-Saharan Africa’s population, making it the youngest continent in the world. While this trend is an opportunity for increased creativity and innovation, it is also a risk for many youths in the region not in education, employment, or training. And the number of young people continues to rise. The World Bank estimates that by 2050 half of the 1 billion people in sub-Saharan Africa will be under the age of 25, highlighting the importance of creating employment opportunities for Africa’s youth.
By some estimates, 20 million new jobs need to be created every year to meet the increasing demand for jobs (Fox and Gandhi, 2021). Yet the job creation capacity of African economies is only half of what it should be, and the lack of adequate employment opportunities has slowed the continent’s structural transformation and progress on poverty reduction. The development of export-led manufacturing, which has historically been a successful job creation strategy for other parts of the world, notably East Asia, is playing a much smaller role in Africa due to rising competition for low-cost work and decline of the sector. The services industry is largely absorbing the bulk of African youth leaving agriculture and moving to cities. This shift reflects the impact of technological progress, the rapidly evolving global marketplace, and natural resource endowments on Africa’s industrialization prospects.
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There is an opportunity for other industries—notably subsectors of agribusiness and service-oriented industry—that share firm characteristics with manufacturing to offer productive jobs for African youth (Baumol, 1985; Bhagwati, 1984). Similar to manufacturing, these sectors are tradable and have high value added per worker. They have the capacity for learning and productivity growth, and some exhibit scale and agglomeration economies (Ebling and Janz, 1999; Ghani and Kharas, 2010). Importantly, they have the capacity to absorb low-skilled labor. For lack of a better term, we call these “industries without smokestacks” (IWOSS) to distinguish them from traditional, “smokestacks” (e.g., manufacturing) industry. Moreover, reductions in transport costs and progress in information and communications technologies (ICT) have spurred the development of such subsectors.
IWOSS activities are defined as those that are:
– Tradable;
– Have high value added per worker—relative to average economywide productivity;
– Exhibit the capacity for technological change and productivity growth; and
– Show some evidence of scale and/or agglomeration economies.
The industries that conform to this definition and are explored in this paper include horticulture and high-value agribusiness, tourism, business services, and transport and logistics. Today, many African economies are turning to these industries to lead the process of structural change (Newfarmer, Page, and Tarp, 2018)—the movement of labor and other productive resources from low-productivity to high-productivity economic activities. The main question we address in this report is: Do these sectors have the potential to solve Africa’s youth employment problem and create large-scale formal productive jobs? Our research shows that there is an opportunity:
Key findings
IWOSS sectors have been growing at a faster pace than many other sectors (Newfarmer, Page and Tarp, 2018).
IWOSS have higher job creation potential compared to the rest of the economy and tend to employ women and young people more intensively compared with other sectors.
IWOSS sectors tend to have higher labor productivity compared with agriculture.
If government policies support the development of IWOSS sectors well, including by addressing key constraints—like infrastructure, skills, and the capacity to export—IWOSS sectors have the potential, over the next decade or so, to generate between 65 and 75 percent of all new formal sector jobs in the majority of countries.
The skill requirements in these sectors generally include soft skills, digital skills, and intrapersonal skills. Equipping young people with these skills will make them employable in IWOSS sectors.
Public policy priorities to support IWOSS range from improvements to the investment climate—reliable electrical power, lower costs of transport, workers better able to perform their jobs, and competition—to industry-specific interventions—such as investments to improve trade logistics in agro-processing and horticulture.
Although the case studies were largely conducted prior to the COVID-19 pandemic, follow-up work in four countries (South Africa, Uganda, Kenya, and Senegal) suggests that, in spite of the vicissitudes of the pandemic, the policy prescriptions in this report remain highly relevant in the post-COVID world.
In this paper, we will share deeper insights on the IWOSS sector in Africa and provide recommendations as we look ahead: Section 2 presents a review of crosscutting themes drawn from the country studies—Ghana, Kenya, Rwanda, Senegal, South Africa, and Uganda—undertaken under the project.1 Section 3 seeks to answer the central research question of the project: Which IWOSS sectors offer the greatest potential for employment of Africa’s growing young population? Section 4 sets out the constraints to growth of IWOSS sectors, built around four drivers of industrial location that have largely shaped the global distribution of industry—with and without smokestacks. Section 6 sets out a number of policy recommendations to relieve the constraints to the growth of IWOSS sectors. Section 7 summarizes the main policy recommendations arising from the research, Section 8 deals with the impact of the COVID-19 pandemic on IWOSS, and Section 9 offers some concluding remarks.
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It takes a village: The role of mentorship in supporting India’s young women in the workforce
Despite important gains in the formal education of girls in the last decade and half, women in India are conspicuously missing from the workforce. The country achieved universal girls’ enrollment in primary education in 2003, secondary-school enrollment currently stands at 74.5 percent, and in higher education, women participate in close to equal numbers as men. Yet, between 2005 and 2019, India’s female labor force participation fell from 32 percent to 21—a loss of more than 1 out of every 3 formally employed women.
Many factors are behind the decline: family-enforced social norms that place women predominantly in caregiving roles, deeply ingrained stereotypes around occupations that stymie aspirations, traditionally low levels of self-confidence, and information and network asymmetries. With so many job sectors that are traditionally male-dominated, women do not have access to the same amount of information and opportunities.
Mentor Together, the organization I founded in 2009, created a virtual mentoring program in 2018 for university students across India—with the goal of supporting workforce readiness through soft skill development, career planning, and network building. As the COVID-19 pandemic forced education institutions in India to close on-campus classes for the better part of 2020, we conducted virtual townhall meetings through which we onboarded 8,000 students from more than 10 states. We were heartened that more than 60 percent of our new sign-ups were young women. Female mentees also outnumbered their male counterparts 3 to 1 in accessing our six-month mentoring program!
Young women like Manjula (name changed for privacy), a graduate student of technology, are well aware of the challenges that face them and actively seek out mentorship that helps sharpen their skills and develop a plan of action to counter these challenges:
“This program is most recommended for students from rural backgrounds because we interact with a mentor who is a working professional, who is dedicated and committed to help students… Whenever I’m speaking with [my mentor], I feel like I’m speaking with my elder sister because she supports and cares so much. … She always shares her experiences in the field which is very important for me because I don’t have much knowledge about work life and programming. That was quite challenging and worrying for me, but now I am learning and understanding programming languages and got more confidence about myself because of my mentor.”
As an Echidna Global Scholar, my research at Brookings will focus on understanding the role of mentorship in the personal and professional journeys of young women. I will study the prevalence and interplay of factors that support or obstruct women’s professional aspirations and plans. I will also examine the role of mentorship in helping young women improve their work-readiness skills, career decisionmaking, and self-efficacy. Additionally, I will explore the possibilities, as well as the limitations, of the virtual mentoring format.
Young women are persevering in education against so many obstacles; it is our collective responsibility as a society to back up young women like Manjula with a “village” of mentors that champion their dreams.
A United Nations Development Programme study of the current policy landscape in India for women’s labor force participation found that out of 53 policies evaluated, the most frequent support provided to women was financial assistance (67 percent of the policies). Support to tackle challenges around social norms, beliefs, and information asymmetries were scarce. Less than half the policies focused on the capacity building of women, and less than a quarter on job placement and mentoring. Through my research, I hope to map out a richer framework of policies that can bring together actors across sectors to provide a broader range of supports to young women as they transition to the world of work.
If even half of Indian women were in the labor force, income per capita could increase by an estimated 20 percent by 2030. Young women are persevering in education against so many obstacles; it is our collective responsibility as a society to back up young women like Manjula with a “village” of mentors that champion their dreams.
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CFA franc zone: Economic development and the post-COVID recovery
Comprising many of the poorest countries in Africa, the CFA franc zone faces particularly daunting challenges to economic development and growth in the context of the ongoing COVID-19 pandemic.
Encompassing 14 countries in francophone West and Central Africa, the CFA franc zone faces climate change, poverty traps, demographic pressures, and natural resource management hurdles. Furthermore, the trifecta of high energy costs, financing constraints, and expensive transport creates barriers to competitiveness. In addition, despite decades of international aid flows, the region has struggled to gain the upper hand in reducing poverty. The COVID-19 pandemic has further amplified the challenges faced by the countries of the CFA franc zone and has simultaneously led to questions about the fiscal and monetary policies most conducive to driving recovery and growth as the world economy adapts to post-COVID-19 market realities.
Since the 1940s, the CFA has been pegged to European currencies—first to the French franc, and, since 1999, to the euro. Until recently, the CFA countries deposited 50 percent of their reserves in the French Treasury in return for a convertibility guarantee. While this arrangement generally resulted in lower inflation than other countries in Africa and some degree of fiscal restraint, it significantly limited the macroeconomic policy options available to its member countries. The trade-off for lower inflation has been slower per capita growth (Figure 1) and diminished poverty reduction.
However, the current exchange rate regime presents several macroeconomic problems that impede these countries’ ability to navigate the COVID-19 pandemic. First, the anchor to a strong currency diminishes private sector competitiveness by effectively subsidizing imports and penalizing exports. As measured by a simple CGE model, in 2020 the CFA franc in the West African Economic and Monetary Union (WAEMU, or UEMOA in French) was 20 percent overvalued, and in the Central African Economic and Monetary Community (known by its French acronym, CEMAC) it was 30 percent overvalued. Second, exchange rate rigidity forces adjustments to trade shocks on the fiscal side via cuts to public investment or additional debt accumulation. Third, the current system worsens inequality between urban elites and rural poor by constraining incentives for commercial agriculture. Fourth, since the monetary policy is fixed, the CFA countries face credit constraints and are unable to use interest rate policy to stimulate small and medium enterprise development. Finally, the currency union has failed to accelerate growth for the poorest members as seen in the lack of economic convergence over time (Figure 2).
As the CFA member countries plan for a post-COVID-19 future, taking the next step on meaningful currency reform must be part of the package. Specifically, while the Macron-Ouattara reform of 2019 ended the reserve deposit obligation and removed French representatives from the Central Bank of West African States (known by its French acronym, BCEAO), it stopped short of overhauling the exchange rate framework. Modernizing the system must include a serious discussion about alternative exchange rate frameworks that would enable greater monetary flexibility while improving competitiveness, opening the door to export-led growth, and realigning incentives for agricultural producers.
For more on this issue, see my book, “CFA Franc Zone: Economic Development and the Post-Covid Recovery,” in which I lay out a policy road map with a number of steps. First, the exchange rate regime should evolve from the peg to the euro, to a basket (tripartite) peg to the euro-dollar-renminbi that reflects West Africa’s changing trade patterns with the world. For CEMAC, which is an oil-rich region, I propose a peg to a basket, including the euro, dollar, and price of oil. This reform will balance stability and flexibility, make the currency more market-based, and support African exporters and entrepreneurs. In the CEMAC zone, it will help the countries adjust to oil price volatility, while in the WAEMU zone, the countries can even embrace integration with specific anglophone countries like Ghana and create a stronger economic space. Second, it is important to modernize the French convertibility guarantee for the CFA franc, which is unclear, and negotiate a clear swap line with the European Central Bank to provide a financial buffer during the transition period and downturns.
Finally, the ultimate goal of the reforms is to have greater African sovereignty and widen the options for fiscal and monetary management in a post-pandemic world. A richer and more prosperous CFA zone will be beneficial not only for West and Central Africa but also for France and the world at large.
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Leveraging IWOSS and soft skills to address slow structural transformation and youth unemployment in Uganda
In recent years, Uganda’s economic growth has been among sub-Saharan Africa’s strongest, averaging 5.4 percent between 2010 and 2019 (World Bank, 2020). However, the rate of growth has failed to match the rate at which employment opportunities are created to both absorb the burgeoning labor force and improve livelihoods. The high population growth rate (recorded at 3.1 percent per year) has resulted in a high labor-force growth rate that has outpaced the rate of job creation, resulting in increasing unemployment and pervasive underemployment rates.
Moreover, in this tough labor market, young and female workers remain disadvantaged, and overall employment numbers often mask other problems in the labor market. For example, as we find in our recent working paper, while the number of unemployed actually declined between 2012/13 and 2016/17 for both young female Ugandans (23.1 percent vs. 18.5 percent) and young male Ugandans (18.5 percent vs. 9.6 percent), the annualized growth rate of discouraged workers—potential workers who would like to work but are unable to secure a job and so have given up on the process—is extremely high and more acute among Uganda’s youth.
A solution?
Like in many other African countries, the slow growth of Uganda’s manufacturing sector—a sector that historically has led to the absorption of low-skilled workers and structural transformation in much of the developing world—has constrained labor outcomes in the country. To address this issue, recent research points to other sectors—termed “industries without smokestacks” (IWOSS)—that share much in common with manufacturing, especially their tradability and tendency to absorb large numbers of low-skilled workers. Examples of IWOSS include agro-industry, horticulture, tourism, business services, transit trade, and some information and communication technology (ICT)-based services. To better assess the potential of these sectors to drive structural transformation, we recently published a case study examining the constraints to growth of select IWOSS sectors (horticulture, agro-processing, and tourism) and skills requirements for those sectors.
IWOSS sectors’ growth contributing to employment growth
IWOSS are well-positioned to help Uganda achieve its growth objectives: Indeed, while the contribution of IWOSS to GDP in recent years has been less than non-IWOSS sectors, it has been higher than manufacturing (Table 1). Moreover, growth in IWOSS sectors (22.9 percent) has been higher than either manufacturing (17.2 percent) or non-IWOSS (18.4), implying that the contribution of IWOSS to GDP is increasing.
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In terms of employment, IWOSS sectors show higher elasticities than non-IWOSS and manufacturing: A 1 percentage point increase in GDP in an average IWOSS sector is associated with a 0.96 percent increase in employment. For manufacturing, the employment elasticity is negative and sizable, which could suggest that automation in the sector is replacing workers, having the opposite historic effect of industry. Despite agriculture being the biggest employer, it has a very low employment elasticity.
Table 1. Change in GDP and employment from 2012/13 to 2016/17 by sector
Source: Authors own calculations’ using UBOS Statistical Abstracts and Survey data sets.Note: This is Table 5 in the case study.
What sectors are driving structural transformation?
As seen in Figure 1, which combines GDP/output and employment growth to get a full picture of industry changes over time, by and large, little structural transformation has taken place over the time period under consideration. While growth in IWOSS overall has contributed to employment growth, the subsector “finance, business, and professional services” seems to have significantly driven the structural growth agenda in the country—much like in South Africa. While tourism, horticulture and export crops and agro-processing—the three IWOSS sectors we explore in this paper due to their significant contributions to revenue, potential for absorbing many Ugandan laborers, and strong backward and forward linkages–do provide great contributions to GDP and employment, they also have had mixed impacts on the economy’s structural growth. For example, while agro-processing seems to have spurred transformation, this change seems to have been driven by its contribution to GDP, not necessarily as an employment avenue.
Figure 1. Correlation between sectoral productivity and change in employment in Uganda, 2016/17
Notes: Uses methodology in McMillan and Rodrik (2011); yellow indicates IWOSS sectors; purple indicates manufacturing; and light blue indicates other non-IWOSS sectors.Source: Authors’ own illustration using 2016/17 UNHS dataset.
What does the future hold for growth and employment in IWOSS sectors?
The outlook for the Ugandan economy over the next 10 years suggests its makeup will shift, leading to a concentration of employment in tourism, finance and business services, ICT, and agro-processing. In our recent paper, we use a 7 percent GDP growth scenario (Table 2) to examine the prospects for job creation in the country. We find that IWOSS sectors will expand somewhat faster (8 percent) than non-IWOSS (6 percent) and twice as fast as manufacturing (4 percent) by 2029/30. In the same vein, employment is expected to grow at about 4.5 percent, largely driven by employment growth in the IWOSS sectors (6.3 percent).
Table 2. Sectoral distribution of GDP and employment in 2029/30—an illustrative 7%-growth scenario
Source: Extracted from Table 20 in the case study.
But are young people ready for these jobs?
While in other countries, IWOSS looks to readily absorb low-skilled workers, our research finds the trend in Uganda to be more nuanced. In fact, in line with the projected strong growth in IWOSS sectors, we find that the skill profile of workers in IWOSS will shift distinctively toward skilled and high-skilled workers, which could be problematic since we predict that, by 2029/30, 54 percent of Ugandan workers in IWOSS will need to be skilled or high-skilled. For a detailed discussion at the sector-specific level, see Table 21 in the full case study).
Figure 2. Uganda’s 7%-growth scenario—Projected employment by skill level
Note: MFG = manufacturing; non-IWOSS excludes manufacturing.Source: Derived from Table 21 in the Uganda case study.
Requisite skills needed for new jobs in horticulture, agro-processing, and tourism
To better advise Uganda on how it can prepare its young people to enter a labor market in which IWOSS are expanding, we need to assess which skills are both available in and needed for the market. To do so, we conducted firm surveys and found, among other trends, that gaps in problem-solving skills among employees inhibit firms from meeting their full potential. More specifically we found that tourism firms place a heavy emphasis on problem-solving and basic skills; horticulture, on problem-solving and social skills; and agro-processing on basic skills, At the same time, the surveys revealed that while the youth were overskilled for the jobs they were holding, the majority had skills gaps in problem-solving in all three IWOSS sectors of focus. Figure 3 illustrates this trend for the tourism sector (see details in full case study).
Figure 3. Skills gap by occupation type in the tourism sector—hotels
Source: Authors’ own calculations based on field survey data (2020).
Importantly, beyond these needs, we also find that digital skills will be paramount for future occupations likely to hire the youth. Indeed, future digital-skills needs were identified as a must by the interviewed firms in the tourism sector. In horticulture, digital skills will be needed for the use of computerized mechanisms in the production of fresh fruits and vegetables while in agro-processing, as automation progresses, digital skills will be needed for the production of primary raw materials.
Constraints to aspired growth
In addition, as our paper points out, to leverage IWOSS sectors and soft skills as avenues for addressing Uganda’s current slow structural transformation and youth unemployment challenges, several constraints to the growth of these sectors must be addressed. Outstanding among these obstacles are: limited access to finance; poor and costly infrastructure (roads, electricity, water, internet, and phone coverage); inherent nontariff barriers; government bureaucracy; and skill gaps (noted briefly above).
Unfortunately, the emergence of COVID-19 has only exacerbated challenges facing IWOSS sectors and the economy in general (see our paper updating our original case study as Uganda now faces the COVID-19 pandemic). Indeed, the three IWOSS subsectors on which we focused experienced significant losses due to reduction of earnings as business operations declined owing to the pandemic-induced lockdown across both the country and the globe. Indeed, many firms responded by laying off some workers, both temporarily and permanently.
Recommendations
In the original case study, we offered a number of high-level policy recommendations that, despite the COVID-19 pandemic, remain extremely relevant for Uganda’s growth and job-creation potential. If anything, the pandemic has made our recommendations all the more urgent. These include, among others:
Develop avenues to improve the soft and digital skills of workers and reduce the cost of trading through investing in physical and digital infrastructure. Such a push could eradicate the skills mismatch reported by employers as one of the obstacles to their operations. We continue to see the importance of this recommendation now: When facing COVID-19, sectors and firms that adopted ICT/digital technologies continued to survive within the measures that the government took to control the spread of COVID-19.
Ensure increased access to affordable financing. Already, a step has been taken in this direction by recapitalizing the Uganda Development Bank (UDB), the Uganda Development Corporation (UDC), and the Micro Finance Support Centre (MFSC) in order to offer affordable credit and facilitate the COVID-19 economic recovery. Such a program is an opportunity for agro-processing firms to acquire long-awaited financing, which historically has been one of their most difficult operating constraints.
For a deeper dive into our research as well as sector-specific recommendations, see our working paper, “Industries without smokestacks in Africa: A Uganda case study.”
The impact of COVID-19 on industries without smokestacks in Uganda
Abstract
In Uganda, the spread of COVID-19 and its economic impacts gained momentum in March 2020 when the country’s first case was reported. By March 30, the government of Uganda had declared a nationwide lockdown in addition to other critical measures to minimize its spread.
The impacts of the virus itself together with government initiatives to control its spread have been felt in the political, social, and economic spheres of life of the country. Simply put, there have been losers and winners as the pandemic took its toll on the economy.
This brief examines the potential economic impact of COVID-19 on Uganda’s industries without smokestacks as a follow-up on the previous work undertaken in the same sectors prior to the pandemic. The aim is to ascertain whether the recommendations made prior to the pandemic are still relevant.
Download the working paper
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Employment creation potential, labor skills requirements, and skill gaps for young people: A Uganda case study
Introduction
Over the course of the last decade, Uganda’s economic growth has ranked among sub-Saharan Africa’s strongest; indeed, the country’s annualized average growth rate was 5.4 percent between 2010 and 2019 (World Bank, 2020). Despite this impressive growth, there has been limited creation of productive and decent jobs1 to both absorb the burgeoning labor force and improve livelihoods. The population growth rate (recorded at 3.1 percent per year) has consistently remained higher than the jobs creation rate necessary for absorbing persons joining the labor market, resulting in increasing unemployment and pervasive underemployment rates. Moreover, where jobs have been created, few young Ugandans (especially young women) have benefited from such opportunities. Indeed, a study conducted by the EPRC (2018) finds that, while the economy grew by 4.5 percent in 2016/17, this growth was largely driven by the services sector,2 but services, in turn, contribute a mere 15 percent to total employment. In addition, due to severe skill gaps, Ugandan youth are largely engaged in low-value services (e.g., petty trade, food vending, etc.), and only few are able to secure employment in high value-added economic activities like agro-processing, horticulture, or tourism.
Uganda’s economy-wide unemployment rate declined to 9.2 percent in 2016/17 from 11.1 percent in 2012/13. Among youth3 (who represent 21.6 percent of Uganda’s population), unemployment declined to 16.8 percent in 2016/17 from 20.3 percent in 2012/13, however, with less progress recorded for female youth. Underemployment, a critical development challenge faced by the youth, is widespread in Uganda and can partly be explained by low skills among job seekers (at 1 percent), time (at 43.6 percent) as well as wage-related aspects (at 30.2 percent) (UBOS 2018). At the same time, inequality of opportunity is also growing. Even among the employed youth, 21 percent are classified as poor due to the precarious jobs in which they are engaged, especially if they work in the informal sector.
In this regard, informality, underemployment, and unemployment persist in the country’s labor market; as a result, many Ugandans are engaged in “vulnerable employment.”4 Vulnerable employment is often characterized by inadequate earnings, low productivity, and difficult conditions of work that undermine workers’ fundamental rights. According to the Uganda Bureau of Statistics (2018), 61 percent of employed persons in the country were classified as engaged in vulnerable employment with the share being higher for female Ugandans (71 percent). Similarly, 68 percent of employed persons living in Uganda’s rural areas are more likely to engage in vulnerable employment compared to 48 percent living in the country’s urban areas.
While agriculture employs nearly 77 percent of the rural population, recorded growth in the sector was low at 2.8 percent in 2016/17 (UBOS 2018). However, sectors providing more productive and better-paying jobs, like agro-processing and high value-added agro-industry have clear linkages to agriculture sector’s overall performance in the country. Weak economic growth in agriculture, therefore, affects agro-industrialization, which, in turn, has implications for the employment viability in the dominant agro-industry. Sector-level performance is also deterred by irregularities and erratic decisions in the business and policy environment. Consequently, the vast majority of Uganda’s labor force remains employed in labor intensive and less productive sectors. Even within agriculture, only a very small proportion of agricultural workers are engaged in the cultivation of high-value, commercialized crops.
The above narrative is also exacerbated by the small and not expanding number of formal jobs, especially in Uganda’s public sector. This lack of available “white collar jobs” is met by a significant number of youth graduating annually either with a certificate, diploma, or degree who aspire to find such employment. While the private sector is coming in to fill the gap in creating jobs for this segment of the population, current efforts are not sufficient, and more opportunities for jobs to be created for this segment of the labor force need to be identified and supported.
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In order to create jobs, especially for the youth, there is need to raise private investment in labor-intensive industries. Besides providing jobs, labor-intensive industries—historically manufacturing— can pave the way for continuous upgrading to higher value-added economic activities. However, the average share of manufacturing in Uganda’s GDP keeps declining, from 11 percent between 2000 and 2010 to 9 percent between 2011 and 2018. Therefore, manufacturing will not be able to absorb the 600,000 young Ugandans entering the jobs market each year (AfDB, 2019).
In light of the slow growth of the manufacturing sector, Uganda needs to find alternatives for the creation of productive jobs if the country is to achieve its Vision 2040. Service-oriented industries that share key firm characteristics with manufacturing firms have the potential to enhance growth and create decent employment opportunities. Such industries are called “industries without smokestacks” (IWOSS). Newfarmer et al. (2018) classify these as agro-industry, horticulture, tourism, business services, transit trade, and some information and communication technology (ICT) based services. This study contributes to the evidence base around this topic by analyzing the role of IWOSS in generating large-scale employment opportunities for (young) workers in Uganda, especially in the formal parts of the economy. The paper pays particular attention to three sectors: agro-processing, horticulture, and tourism, as the earlier literature indicates that these sectors have considerable potential to create large-scale formal employment opportunities for young people.5
Specifically, this study:
Assesses the current employment creation potential along the value chains of IWOSS industries under their respective current sectoral growth trajectories;
Aims to identify the key constraints to growth in IWOSS sectors;
Estimates future labor demand in IWOSS sectors when identified constraints are removed;
Analyzes the occupation and labor skills requirements and gaps in IWOSS sectors; and
Pays particular attention to the need for soft and digital skills among youth (employed and unemployed) to ensure that suggested policy interventions can bridge them.
The remainder of the paper is organized as follows: Section 2 presents the approaches adopted as well as data sources and their limitations. Section 3 presents the country context and background with emphasis on the performance of selected IWOSS sectors in Uganda. The section further delves into employment patterns and other salient features of employment in the country. Section 4 analyzes growth patterns in terms of output, productivity, and exports with emphasis on the role of IWOSS in structural transformation. Section 5 analyzes the specific characteristics regarding sectoral employment and comparisons are made between IWOSS and non-IWOSS sectors as well as manufacturing. Section 6 presents the growth constraints that IWOSS sectors face. Section 7 provides projections for the size of labor force by 2029/30 according to skill groups, projections that inform discussion on the skills gaps that need to be filled to solve current employment gaps. Section 8 presents firm-level surveys that provide insights into future employment requirements and the need for digital skills along the IWOSS value chains selected for this study (horticulture, agro-industry, and tourism). Section 9 concludes with policy recommendations to leverage IWOSS sectors for employment generation, especially for youth.
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The power of technical and vocational skills: Increasing girls’ participation in formal agriculture education in Afghanistan
In March 2021, I visited an agriculture and veterinary institute (AVI) in northern Balkh province in Afghanistan. With state-of-the-art educational infrastructure and labs, the institute is built on about 250 acres of land in the outskirts of Mazar e Sharif. The AVI is separated from the surrounding villages by the walls of an old castle. Beyond the walls, you see women and girls working in the agricultural fields. However, inside the walls—contrary to expectations—very few girls are pursuing formal agriculture education within the institute. The question is, why? Why have we been unable to fill these empty classrooms with students from outside the walls of the institute?
In the informal sector, women and girls from all socioeconomic and religious backgrounds actively participate in agricultural activities. Indeed, a 2017 study found that 70 percent of rural women are directly or indirectly involved in agriculture. They learn and transfer agricultural skills through informal processes with family and friends.
According to a 2018 report by the World Bank, 40 percent of the total labor force is employed in agriculture, and in rural areas more than half of the workforce is busy in the sector. Agriculture is considered the backbone of the Afghan economy, and women the backbone of agriculture, through unpaid labor. The Afghanistan Growth Agenda identified agriculture as one of the top growth sectors in the country, and the National Comprehensive Agriculture Development Priority Program prioritized an aggressive policy goal strengthening women’s role in growing and increasing food production at the household and commercial levels to ensure food security.
While national policies are calling for equal access to education, the question remains why girls’ participation in formal agriculture education remains low, particularly in rural communities.
The National Strategy on Women in Agriculture recognized formal agriculture education and women’s skill development as essential to inclusive agricultural development and called for the enhancement of vocational and skills training for women and girls. While national policies are calling for equal access to education, the question remains why girls’ participation in formal agriculture education remains low, particularly in rural communities. There are several key challenges that require further research.
Challenges
1. Low participation of girls in agricultural education
The Technical Vocational Education and Training (TVET) Authority of Afghanistan manages about 380 technical and vocational high schools and institutes across the country, of which about half are dedicated to agricultural education—or at least teaching agriculture as a trade. However, in 2020, of the 20,000 students studying agriculture in TVET programs, only around 3,000 are girls, and most of them are studying in urban areas. Of the 34 provinces nationwide, nine have less than 50 girls enrolled in agriculture schools and institutes; in another nine, there are no girls enrolled in formal agriculture education at all.
2. Perceptions of agricultural education
Agricultural education is perceived by society as second-class education. As one female teacher at an agriculture institute commented, “When I heard that through Kankor [the national higher education entrance] exam I got [accepted] to the agriculture faculty, I cried for one week. I wanted to become a doctor.” In my survey as a part of the Echidna Global Scholars program, of the 82 female students already studying at the agriculture faculty at Balkh University, only 12 respondents selected agriculture as their top choice. Further, of the 55 female students already studying at the AVI in Balkh, only 21 selected agriculture faculty as their top choice in Kankor. Since they could not get to the four-year undergraduate program, they are now pursuing a two-year degree program at the AVI. My survey indicates that female students are more inclined toward law and political sciences and medical sciences instead of agriculture. In some instances, even agriculture faculty professors questioned female students on why they were not studying something else instead of agriculture.
3. Lack of female teachers
Female teachers account for 4 percent of the total teachers in agriculture. Of the 1,248 teachers in agricultural schools and institutes in the country, only 54 are female, half of them hired on short-term contracts. The lower number of female students in agricultural education results in a lack of female teachers to serve as role models, resulting in a vicious cycle in which the small number of female teachers leads to a lack of interest among female graduates in teaching agriculture as a career, which attracts fewer female students, and so on.
4. Lack of financial resources
The TVET Authority would require substantial additional funding to increase and expand TVET and agricultural education for girls, yet it is unclear where this funding would come from. The current TVET Strategy (2019-2024) outlines the establishment of eight special TVET schools for girls, but no reference is made as to how or where these schools would be built, and the strategy does not mention how such construction would be financed nor where the funds would come from for their operation.
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As an Echidna Global Scholar, I will investigate pathways that could potentially address some of these daunting challenges, reviewing policies that currently support or hinder girls’ participation in formal agriculture education. I hope that my work at the Center for Universal Education will contribute to girls’ greater participation in TVET—particularly in formal agriculture education in Afghanistan—so that technical and vocational skills can help unleash their potential and enable them to more effectively participate in the national growth and economic development of the country.
Addressing America’s crisis of despair and economic recovery
Summary
Despair in American society is a barrier to reviving our labor markets and productivity, jeopardizing our well-being, health, longevity, families, and communities—and even our national security. The COVID-19 pandemic was a fundamental shock, exacerbating an already a growing problem of despair.
This despair in part results from the decline of the white working class. It contributes to our decreasing geographic mobility and has political spillovers, such as the recent increase in far-right radicalization. At the same time, other population groups are also suffering, for different reasons. Over past few years, for instance, suicides increased among minority youth and overdoses increased among Black urban males (starting from a lower level than whites but now exceeding it).
Policy responses have been fragmented, with much focus on interdiction or ex-post treatment rather than on the root causes of despair. There are local efforts to boost the well-being of vulnerable cohorts, but most are isolated silos. There is no federal level entity to provide the vulnerable with financial or logistical support, nor is there a system that can disseminate relevant information to other communities seeking solutions. While federal agencies—such as the Centers for Disease Control (CDC)—track mortality trends, no system tracks the underlying causes of these deaths. In contrast, many countries, such as the U.K. and New Zealand, track trends in well-being and ill-being as part of their routine national statistics collection and have key leadership positions focused exclusively on these issues.
This policy paper proposes a new federal interagency task force to address our nation’s crisis of despair as a critical first step to sustainable economic recovery. The task force would both monitor trends and coordinate federal and local efforts in this arena. We identify five key areas the task force could monitor and help coordinate: data collection; changing the public narrative; addressing community-wide despair as part of the future of work; private-public sector partnerships; and despair as a national security issue.
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