Expanding economic opportunities for women and youth in Africa through structural transformation
Programs and partnerships
Lead institution(s)
Summary
The lack of transformation in economic structures poses a significant challenge to Africa’s sustained growth, as well as its ability to tackle youth un/underemployment and close gender gaps.Read more
The lack of transformation in economic structures poses a significant challenge to Africa’s sustained growth, as well as its ability to tackle youth un/underemployment and close gender gaps. The celebration of “rising Africa” — strong economic growth and progress in health and education — is increasingly met with questions about its sustainability and its inability to facilitate inclusive economies. National governments and regional bodies are realizing the importance of addressing this critical challenge and are actively searching for clear options on how best to do so.
This project seeks to identify concrete ways to achieve the kind of economic transformation that helps expand livelihood opportunities for the growing youth population and marginalized women. The objective is to provide policy options to enable countries to move from low-productivity sectors to high-productivity, high-growth, and export-oriented sectors that can generate broad-based employment opportunities. The project will generate new evidence on skills gaps and how this will limit the attainment of inclusive growth and greater labour participation of women and youth. It will also enrich policy discussions and debates beyond traditional economic growth models through exploring the role of the services sector and the potential implications of the so-called fourth industrial revolution (which integrates physical, digital, and biological inputs into the production process).
The project will strengthen the capacity of African researchers to lead national and regional discussions on how countries — and the region as a whole — can stimulate economic growth that is inclusive of women and youth. The research will be carried out in four countries in sub-Saharan Africa, involving national country teams. The country selection will be guided by careful consideration of geographic diversity, data availability, and potential for policy uptake. The University of Cape Town’s Development Policy Research Unit (DPRU) will provide a coordination and oversight role.
Research outputs
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This policy brief provides a synthesis of four country case studies: Ghana, Kenya, Senegal and South Africa. Economic complexity refers to the amount of “productive knowledge” or “technical know-how” within a country. The paper provides a table summarizing product-specific constraints by country.
Country constraints include product certification, which is performed by state agencies. When such agencies lack regulatory capacity, products do not get certified and as result, cannot be exported – inhibiting the growth of firms. Constraints also exist where there is inadequate electricity supply; firms need to invest in expensive diesel-operated generators in order to function.
This study details the degree and extent of economic complexity in Kenya, including the country’s product space, and provides policy options to enable Kenya to move from low to high productivity. It identifies and examines constraints such as the high cost of doing business; the lack of access to finance; inadequate infrastructural support; skills deficiencies; trade in counterfeit products; and stringent product licensing requirements. Of the sectors considered for analysis, most were affected by supply side constraints resulting from poor production techniques. Concerted efforts are needed to upgrade workers’ skills and competencies in the production process.
This policy brief assesses the prospects for boosting employment through export-led growth, making use of the product-space framework. Product-space analysis enables computation of the economic complexity or implied technological sophistication of exports. The central concept is to diversify exports into increasingly “complex” products embodying sophisticated capabilities. Senegal’s manufacturing exports have risen over time as a share of total exports, but the preponderance of manufactured exports consists of capital-intensive products like chemicals and cement. Exports of labor-intensive manufacturing such as textiles, clothing and shoes have declined sharply over time. Weaknesses in the business climate consist of deficient public services, corruption, and restrictive labor market regulations.
Industry expansion in Ghana is hampered by difficulty in accessing larger markets within the Economic Community of West African States (ECOWAS) subregion: products that are exportable through a free tariff regime are subjected to unreasonable delays at the ports. Additionally, costs of production are extremely high: high interest rates, duties on imported raw materials, exchange rate fluctuations, taxes, electricity, as well as labour and training costs. Ineffective regulation and cheap imports are also impediments to economic complexity. ECOWAS countries must commit to enforcing free trade within the sub-region to promote intra West Africa Trade, facilitating the growth of exports and job creation.
By improving product quality and cost-competitiveness, Senegal can foster increasing economic complexity and employment growth within existing product lines with strong comparative advantage.
Product complexity refers to technological sophistication, and can be used to identify possible diversification opportunities that will spur growth. The central concept is to diversify exports into increasingly “complex” products embodying sophisticated capabilities. This policy brief assesses the prospects for boosting employment through export-led growth, making use of the product-space/product complexity framework.