A ‘Marshall Plan’ needed to tackle Africa’s unemployment challenge

Every year, many university graduates enter the job market adding to the high unemployment rates in Africa. Photo/FILE 

By Tony O Elumelu

In Summary

• Economists expect Africa to create 54 million new jobs by 2020, but 122 million Africans will enter the labour force during that time. Adding to this shortfall are tens of millions currently unemployed or underemployed.
• Africa’s Marshall Plan should prioritise three interdependent pillars of development, which all work together to form a virtuous cycle of growth: Policy reform and a commitment to the rule of law; investment in infrastructure, and a commitment to developing Africa’s manufacturing and processing industries. 

To Africa’s many challenges, add one more: unemployment.

Unemployment, independent of any other factor, threatens to derail the economic promise that Africa deserves. It’s a ticking time bomb with no geographical boundaries.

Economists expect Africa to create 54 million new jobs by 2020, but 122 million Africans will enter the labour force during that time. Adding to this shortfall are tens of millions currently unemployed or underemployed.

Thus, even with the strong economic growth we have seen over the past decade, job creation in Africa remains much too slow. Africa needs a comprehensive, co-ordinated approach akin to America’s “Marshall Plan” in Europe after World War Two.

That effort focused on building infrastructure, modernising the business sector, and improving trade. By the end of the four-year programme, Europe surpassed its pre-war economic output.

We can, and must, do the same for Africa. Entrepreneurs, politicians, philanthropic foundations, and development organisations — such as the World Bank, International Finance Corporation and USAid — must all work together to solve the unemployment crisis and make Africa an engine of growth.

Africa’s Marshall Plan should prioritise three interdependent pillars of development, which all work together to form a virtuous cycle of growth: Policy reform and a commitment to the rule of law; investment in infrastructure, and a commitment to developing Africa’s manufacturing and processing industries.

This virtuous cycle forms the heart of Africapitalism: The public, private, and development sectors all coming together, united in a single objective of creating jobs and social wealth.

First, we need enlightened government policies that help reduce administrative and operating costs for investors and businesses.

We must streamline licensing and permitting processes, reduce import duties and tariffs and ease visa restrictions, among other reforms. Such policies would do much to attract investment, increase entrepreneurship and ultimately generate jobs.

Enlightened government policies in Kenya and Nigeria have already helped to advance the information technology and financial services sectors.

Microsoft’s pilot project to expand broadband access in Africa depends on government policy that frees up unused “white space” in the TV and radio broadcast spectrum.

Financial services reform across several African nations, starting with Nigeria, enabled United Bank for Africa to grow into a pan-African financial institution. The government’s privatisation programme has attracted billions of dollars in private investment to develop Nigeria’s power infrastructure.

Governments and the private sector must also commit to strong, transparent institutions to help boost confidence in Africa’s business climate. African nations such as Botswana, Rwanda and Liberia have made tremendous progress in this area, though in some countries, war and civil unrest continue to take a toll.