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Urban youth can save Africa - or sink it

Greg Mills | 09 October, 2011 01:19
A commuter train on the Kenya-Uganda railway line chugs through Kibera, one of the largest and poorest slums in Africa and home to about a million people, in Kenya's capital, Nairobi. Urbanisation in Africa is gathering speed Picture: REUTERS

The population of sub-Saharan Africa is expected to nearly double to 1.5 billion by 2030.

By then, most Africans will live in the continent's cities. And two-thirds of Africans will be younger than 24 - accounting for an astonishing one in four of young people worldwide.

What are they going to do? How are we going to provide jobs for burgeoning numbers of young people in our cities?

This is nothing to be scared of - it is estimated, for one, that as much as 40% of East Asia's growth "miracle" was the result of just such a demographic dividend. But it requires the right policies and choices to be made.

Not much can be done without rapid growth, somewhere around 10%, up from sub-Saharan Africa's current 6%. Growth at these levels involves realising both of the continent's comparative and competitive advantages: digging things out of the ground (usually) and making them.

The former especially demands regulatory clarity and predictability, the avoidance of over-bureaucratisation, lowering of infrastructure costs and reducing policy uncertainty. If you threaten to nationalise, forget it.

The latter, improving competitiveness, requires all of these things and more, success hinging on a complex range of policy actions. Running through all of these is a key question: how can a government improve the chances of its businesses to compete globally?

Here there is an overall need to differentiate between policy options and political choices.

Politicians are rather bad at this.

Yet, there are a set of basic imperatives for those countries seeking to add value (and jobs) through manufacturing and services: tax incentives, productivity related to costs, skills and wages, ease of work permits, efficiency of infrastructure, etc.

While a lot of effort is spent on addressing tariff barriers, the greater rewards, at least in the short term, will likely come from logistics. For one, 24/7 customs regimes should be a norm.

Wages and skills are two sides of the productivity coin. Educational establishments are not the only way to create the necessary skills. Getting people into jobs is another. Restrictive labour practices are an impediment to this. Such laws are politically understandable, if commercially problematic. Yet, it is necessary to make it easier to employ folk, particularly in first-time employment.

Like Italy, where the number of marriages went up when divorce was allowed, this requires making it easier to fire workers before they are employed.

Fortunately, most African countries are at such a low economic base that even a few improvements - such as in infrastructure and bureaucracy - can bring huge rewards.

Unless policy adjusts quickly to this reality, however, the undoubted energy of African youth, matched with globally fed expectations, could quickly turn an unsurpassed opportunity into a destabilising nightmare.

 

Original Source: The Times Live

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