The clock is ticking on the urgent challenge of job creation in Sub-Saharan Africa

As the rest of the world faces aging populations, Africa’s population is booming. By 2030, half of all new entrants to the global workforce will come from Sub-Saharan Africarequiring the creation of up to 15 million new jobs annually.

That Chart of the week shows that this challenge is particularly acute in fragile, conflict-affected and low-income economies. They account for nearly 80% of the region’s annual job creation needs, but have so far struggled the most to create jobs.

These economies have high fertility rates, young populations have not yet peaked. For example, Niger has a population of 26 million people and a youth share that is not expected to peak until 2058 – the country will need to create 650,000 new jobs annually for the next 30 years. In contrast, many middle-income countries such as Botswana, Ghana, Namibia and Mauritius have already seen a peak in their youth population and will face less severe pressures to create jobs.

Tapping into Africa’s booming population growth potential requires the generation of large numbers of productive, quality jobs that provide above-subsistence incomes, whether in formal roles or self-employment.

There are three main challenges to creating enough good jobs, but policymakers have the tools to make a difference.

• Moving informal jobs from a trap to a cornerstone. Targeted policies include increasing productivity in the informal sector through well-adapted skills training, better access to finance and policies that encourage the transition to formal employment. There is value in creating labor market programs that help young people, especially women who face additional barriers, enter the workforce by ensuring they have the tools to succeed.

• Creating conditions that favor job growth in high-productivity sectors such as modern services and manufacturing. Given limited public finances, governments can prioritize measures that benefit multiple sectors, such as improving market competition and making value-for-money infrastructure investments. They should be cautious with industrial policies targeting specific sectors, as they can be costly, distortive and present risks of corruption.

• Removing barriers to private business growth. Prioritizing important infrastructure such as electricity, internet, roads and accessible public transport can facilitate the flow of goods and services. Cutting red tape and reducing corruption will also help companies grow. Attracting more foreign direct investment and developing local capital markets can make more finance available. And strengthening regional integration and trade can expand markets.

The international community has much to gain from thriving employment in sub-Saharan Africa. Not only is robust job growth good for countries and people in the region, it will also provide an engine for growth, consumption and investment for the global economy. Failure could exacerbate poverty, fuel instability and generate migration, while success could unlock prosperity for both Africa and the globe. Policymakers need to push for meaningful change that will create a path for millions of people to a brighter future for jobs.

—This blog is based on an analytical note included in the October 2024 Regional Economic Outlook for Sub-Saharan Africa, The clock is ticking on the urgent challenge of job creation in Sub-Saharan Africaby Wenjie Chen, Khushboo Khandelwal, Athene Laws, Faten Saliba, Can Sever, and Luc Tucker of the IMF’s African Department. For more, see Presentation of the Analytical Corner by Athene Laws and Faten Saliba during the October 2024 annual meetings.