Sectors that Will Shape the Future of Job Creation in Africa

Countries in Africa, since the early 2000s, have enjoyed a promising economic growth, albeit with a brief slowdown in the 2010s that mostly affected resource-rich countries and the impact experienced globally as a result of the negative impacts of the covid-19 pandemic. But despite this upside, job creation remains weak and many countries have not kept up with the rapidly expanding working-age population.

By 2017, sub-Saharan Africa, for instance, was home to 13 percent of the world’s working-age population; a number that was is projected to reach more than 17 percent by the year 2030, the world’s second-largest after Asia.

Also, more than 60 percent of the population in sub-Sahara Africa are under the age of 25, which means that the region is easily the world’s youngest region today. By 2030, it will be home to more than one-quarter of the world’s total under-25 population.

Over this period, sub-Sahara Africa is expected to expand the size of its workforce by more than the rest of the world combined, as more tech-savvy, the best-educated and globally connected youth the continent has ever had, enters the world of work.

From these stats, it is safe to say that job creation remains a crucial issue for the future of Africa, especially in sub-Sahara Africa. The best part, however, by leveraging this demographic opportunity, the region holds the potential to unleash new economic possibilities created by future industries and labor markets.

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As a result, the labor productivity and per capita incomes will be dramatically raised. Also realized will be a diversified economy ideal to stabilize economic growth and facilitate high-skilled talent and job creation for decades to come.

Luckily, several countries in the continent are bracing for technological advances and other disruptions that will fundamentally transform the work landscape. And as this goes on, the potential for certain sectors to remain the key drivers of employment cannot be disputed. Such sectors include:

1.     Agriculture

Africa is widely known for its abundance of agriculture and mineral resources. However, the continent still struggles to translate these resources into shared wealth and sustained economic development.

Innovations and investments, nevertheless, promise to change that picture and create exciting growth opportunities for business. And this is why Africa will remain a strategic continent for the agri-food industry in the world. In fact, it holds 60 percent of the uncultivated arable land of the planet!

According to the McKinsey and Standard Reports, it will take about 9.2 trillion dollars in cumulative investment to feed the world by 2050, and among all the sectors of the industry, the agri-food industry is the one that needs executives the most.

A basic workforce is ever available and the agricultural industry is constantly looking for talents that are experts in that department. This offers a lot of employment opportunities and will continue doing so, even as the world moves towards digitization.

2.     Manufacturing

With the increasing use of digital technologies such as robotics and artificial intelligence, the global manufacturing landscape is changing rapidly. However, some economists have called into question the primacy of manufacturing. Some people wonder whether there is anything special about manufacturing and others ponder if it indeed is the development path.

Well, while some enthusiastic experts might say being hellbent on manufacturing reflects a lack of imagination concerning other possible paths such as services, there is no denying that fostering industrialization is high on the list of priorities for policymakers in Africa.

Historically, industrialization has been associated with job creation, poverty reduction, and rapid growth in poor countries. Look at China, for example. The formal sector manufacturing employed around 50 million workers in 2014. A country like Kenya could employ its’ entire labor force with 50 million jobs.

Point is, the people of Sub-Saharan Africa are rich in natural resources and they are tired of sending raw materials to rich countries to be processed; they want to process these resources on their own turf to the benefit of their own people.

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The rapidly expanding young population and simultaneous surge in demand for consumer goods and food have deemed the continent fit for progressive business and industrial proposition. With the desire to produce more and to generate greater value from the available raw materials and resources, the manufacturing industry in Africa will remain one of the sectors creating jobs.

3.     Agro-Processing

Africa has suitable agro-climatic conditions that allow for the production of diverse agricultural commodities. However, most of these countries depend on the import of large quantities of food and other agricultural products.

Even though the export of manufactured goods has been on the rise lately, the imports of raw materials have also increased significantly. And with the continent’s exports mainly dominated by raw materials, it is evident that most of its commodities are not processed locally.

This is despite the fact that agro-processing is essential for sustained and accelerated economic growth, food security, job creation, and poverty reduction. The sector also can boost ancillary economic activities in the tertiary sector.

With clear policies and technology adoption, the potential of the agro-processing industry in Africa is quite significant. Innovation in the sector, as well as the agricultural sector, will result in the creation of thousands of jobs.

4.     Value Add

Africa’s dependence on commodity exports is a clear testimony that the continent is far from growing its economy by taking advantage of the added value that processing raw materials and manufacturing can bring.

The continent is rich in resources. It exports a ton of raw materials from oil to cocoa, cotton to vanilla. If Africa promotes successful industrial policies, attracts funding to infrastructure and industry, and supports the growth of capital markets, it could create quality employment that alleviates poverty.

In particular, attracting private sector investment is bound to drive agro-processing and build a strong value chain. Once the continent figures out how it will add value to what it creates, every time that product is exported, jobs will be created for the youth and this will add value to the local economies. It might be a gradual process, but it is worth it. Perhaps maybe then, markets will stop taking unprocessed products to the market and expecting high profits.

5.     Logistics

In sub-Sahara Africa, South Africa tops the list of countries with the most transport and logistics sector. This places it on par with some of the world’s most industrialized countries.  All is not lost for other countries in the region, however, as logistics companies are looking to the rest of the African continent for investment opportunities.

This will improve gateways connecting the African countries and the rest of the world, especially since the infrastructure barrier remains among the challenges hindering consistent economic growth in the region.

Improving the infrastructure is a welcome move for the global transportation and logistics industry that can play a vital role in the continent’s efforts to gear up – build its infrastructure, enable supply chains and distribution networks, provide mobility – and ultimately help create jobs for its people.

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According to a report by PwC dubbed ‘Africa gearing up: ‘Future prospects in Africa for the transportation & logistics industry, each country in Africa has its own value proposition. There is a strong need for the road, rail, air, and ports transport networks in some economies to be improved. Transport and logistics infrastructure has the potential to unlock the economic growth value of the continent. It can also provide businesses with great opportunities for growth and the creation of employment.

6.     Knowledge Transfer

It is a well-known fact that innovation rarely succeeds in isolation. For its success, innovation systems must be augured with business and education ecosystems that can support and perpetuate parallel innovation.

What this means is that for an innovation ecosystem to function properly, there must innovators, entrepreneurs, researchers, academia, venture capitalists, investors, trainers, legal consultants, business and professional development experts, as well as marketing gurus and a plethora of other individuals.

This calls for the need for knowledge transfers in various industries, which is key in ensuring that those struggling to seek out the details they need to perform specific tasks don’t inadvertently replicate work that has already been done.

Through skills transfer, youth entrepreneurs will grow efficiently and sustainably. They will improve knowledge, information, and networks regarding the development of entrepreneurship and small and medium-sized enterprises (SMEs) in Africa, thus creating employment for themselves and others.

It is only unfortunate that the continent falls short with the lack of research to backing up youth ventures and innovations, expertise to promote knowledge transfer, and funding to upscale innovative ideas into full-fledged commercialized products and services. It’s not that Africa doesn’t have these variables in place, it’s just that they don’t sync up at present.

7.     Data Analytics

Data science is still struggling to become pronounced as a career path for young Africans. There is a shortage of the field’s human capital, which has greatly slowed its adoption. But as financial institutions and financial inclusion policies continue to be implemented across various economies in the continent, as different economies recognize the power of data, and with the need to employ a greater level of data analytics in the design of product innovations, capable African data scientists are required to meet this demand.

Although the job market is not yet fully responsive to data science, opportunities are being created as institutions become increasingly data-centric. The current economic sphere has seen many businesses frequently resort to hiring data science consultants from outside due to the scarcity of competent local resources.

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A lack of formal educational opportunities is a key contributor to the shortage of proficient data scientists on the continent. But as different technological innovations and public as well as private sector support gradually emphasize the need for strong data scientists, youth with the required skills are bound to get jobs.

8.     Data Protection

Similarly, in the face of frequent data breaches and attacks, many economies in Africa will create a host of jobs for the youth with data protection skills. This will bolden their cybersecurity strategies and improve working relationships with other Western countries concerned about the insufficient data privacy laws and rampant cases of cybercrimes in the region.

9.     E-Commerce

Africa has already seen the potential e-commerce platforms have in terms of creating jobs. From packaging to delivery services to setting up premises as pick-up locations, the range of employment opportunities it packs is substantial.

Add that to the fact that as more and more e-commerce platforms expand to serve a specific niche and meet the dynamic preferences of the consumer, others with the ability can create their own stores and sell products within the same platform.

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The beauty of it all is that Africa is fast adopting digitization which continues to disrupt various industries. As corporations and enterprises strategize and move their services and products online, they are creating jobs. This is the one sector that is yet to fully boom in Africa as well as some parts of the world.

In conclusion…

Africa has the potential to create hundreds of thousands of jobs. As the continent moves forward, it is gradually implementing policies that support its industries, which is, in turn creating jobs for the youth. Perhaps when the country is fully self-sufficient, unemployment rates will go down significantly.