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Leveraging Africa’s Informal Economy for Young People

To create quality job opportunities for Africa’s growing youth population, the continent’s governments should both nurture the informal sector and encourage informal businesses to formalize their operations. To this end, they could employ many of the same tactics that have proved effective in encouraging the development of small and medium-size firms.

LUSAKA – By 2050, Africa will be home to 25% of the world’s workforce. And yet there is no guarantee that those workers – especially the growing share of young people among them – will be employed, let alone in decent jobs.

Of Africa’s nearly 420 million young people (aged 15-35), one-third are currently unemployed, and another third are vulnerably employed. Only one in six young Africans is in wage employment. With few options and even less hope, young people may resort to activities like prostitution to make ends meet, or to distractions like illicit drugs.

Africa’s largest generation is now at risk of being lost – a failure that would have far-reaching consequences. If Africa’s human capital is left idle, its innovative capacity will be depleted, and its growth potential squandered. Demand for government benefits will rise, placing intensifying pressure on public budgets, and popular frustration will grow, potentially fueling social unrest and political instability.

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