No Vacancies! Region has highest unemployment in Africa

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Gaborone - Persistently high levels of youth unemployment in Southern Africa pose a threat to regional peace and stability, a new report by the African Development Bank (AfDB) shows. 

Titled “Coping with the COVID-19 pandemic”, the report found that compared with other regions, “Southern Africa has the highest unemployment levels, averaging 12,5 percent between 2011 and 2019, followed by North Africa averaging 11,8 percent over the same period.” 

Warning that increasing levels of unemployment do not bode well for the region’s peace and stability, the AfDB says: “In terms of youth unemployment, more countries are struggling. Nine out of the 13 countries experienced double digit youth unemployment levels, with the worst-affected countries being South Africa (53,2 percent), Eswatini (47,4 percent), Namibia (44,8 percent), Botswana (37,5 percent), and Lesotho (33 percent). Youth unemployment rates were generally double the average levels.” 

Madagascar had the least youth unemployment in 2019; while Zambia, Madagascar, Malawi, Lesotho and Mozambique significantly reduced youth unemployment between 2011 and 2019, the report says.

“Countries that experienced an increase in youth unemployment include Namibia, Mauritius, South Africa, Botswana and Angola,” says the AfDB.  “Overall, the high level of unemployment, especially among the youth, is due to inadequate skills, skills mismatch, limited economic diversification, and low absorption capacity of industries, growth models driven by capital intensive sectors (eg diamonds in Botswana), a lack of functional institutions, slow economic growth, and a lack of pro-employment macro-economic policies.”

The AfDB recommends employment creation be mainstreamed in all national (fiscal, monetary and economic blue-prints) and sectoral policies.

“However, in the context of the COVID-19 pandemic, unemployment is likely to escalate especially in the hardest hit sectors such as tourism and hospitality, entertainment, retail and trade and agriculture, where most of the people in the region are employed,” the report states.

It says SMEs and the informal economy in general – big employers in several SADC countries – have been negatively affected by national lockdowns and slowdown in business activity occasioned by the pandemic.

“Without government support, the majority of workers are at risk of losing jobs, thus, compounding the unemployment statistics,” the report notes.

 

Inequality

 

According to the report, poverty and inequality were twin challenges demanding the attention of the Southern Africa region.

“High unemployment rates,” the researchers say, “have also contributed to huge income inequalities and pose questions on the role of developmental policies in the region in reducing unemployment and promoting structural transformation.”

They continue: “Seven countries had about or more than half of their population living below the national poverty line between 2007 and 2018 (Lesotho, Madagascar, Malawi, São Tomé and Príncipe, South Africa, Zambia and Zimbabwe).”

The countries with the largest share of the population living below the poverty line, according to the AfDB, were Zimbabwe (70,5 percent), Madagascar (70,1 percent) and South Africa (55,5 percent).

In addition, ten of the 20 most unequal societies in the world, the report stated, were found in Africa, with South Africa leading in the region. Of the 10 African countries ranked among the world’s 20 most uneven, six are in Southern Africa: Botswana, Eswatini, Lesotho, Namibia, South Africa and Zambia.

“Southern African countries have not been performing well in terms of reducing inequalities. Two of 13 Southern African countries have very high levels of inequality, while four are in the high inequality category, two with medium inequality and three with low inequality,” the report says.

The AfDB says the COVID-19 pandemic demands redoubled effort to deal with unemployment and inequality.

“The COVID-19 pandemic will adversely impact economic growth in the region in 2020. Most factors that were initially projected to push GDP growth upwards, such as strengthening commodity prices, (especially for agricultural goods, metals and minerals), the implementation of structural reforms to restore macroeconomic stability, and steady investment growth, are being threatened by the impact of COVID-19,” the report says.

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