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An Agenda for Decent Jobs in Africa

African governments have traditionally tried to tackle unemployment and underemployment by improving the business environment, but such reforms are politically difficult and often ineffective. Policymakers should instead implement three other sets of policies to boost job creation.

ABIDJAN – Few people would think that Africa’s labor markets are the most dynamic in the world. Yet, according to the International Labour Organization, African countries had some of the lowest unemployment rates in 2018. They include Niger (0.3%), Rwanda (1%), Burundi (1.5%), Madagascar (1.7%), Togo (1.7%), Ethiopia (1.8%), Tanzania (1.9%), Liberia (2%), Benin (2.1%), and Chad (2.2%).

The reality in these countries, however, is that almost everyone must work to survive because governments have limited capacity and no fiscal space to support social safety nets. At the same time, African economies also have some of the world’s highest underemployment rates, owing to erroneous policy choices, low levels of productivity, and insufficient growth, despite the commitment and hard work of an abundant labor force.

Defining unemployment and underemployment, and comparing them across countries, can itself be problematic. According to the ILO, an unemployed person is a member of the labor force who was not employed during a specified recent period, and is both available for and seeking work. The underemployed comprise the unemployed plus those who are employed part time (less than 30 hours per week) and want to work full time. Yet, although most African economists and statisticians accept the official definitions of these terms, policymakers continue to debate their practical significance.