Can a Systems Approach Create More and Better Jobs for Africa’s Youth?

Across the world today, there are an estimated 1.2 billion young people aged 15-24 – accounting for one out of every six people globally. Nowhere is this more relevant than in Africa, the world’s youngest and fastest-growing continent. For Africa’s labour markets, this ‘youth bulge’ simultaneously presents an opportunity and a challenge: a growing share of the working-age population could lead to a boost in productivity and growth for African economies; but this is contingent on labour markets accommodating these growing numbers of youth putting intense pressure on systems that are often already struggling to keep up. Action must be taken to ensure that there are sustainable and transformative approaches which allow this growing population of young African women and men to have access to decent and dignified employment opportunities.

One approach that can lead to sustainable and transformative impact at scale, which has been used across various economic sectors in international development by different donors, is market systems development (MSD) approach. That’s why the ILO Lab and the Mastercard Foundation joined forces to explore how this approach can address the challenge of decent work for Africa’s youth.

Together, we sought to:

• Understand the different pathways and experiences of market systems development (MSD) programmes in labour market to address youth employment;
• Draw lessons from these programmes on successful delivery, with a focus on what is specific for youth; and
• More broadly, ask how useful the MSD approach is for addressing the challenge of youth employment in sub-Saharan Africa.

Six key learnings emerged from our research, relating to the design and implementation of youth-oriented programmes:

Programme Design

• Rethink sector selection. Youth-specific barriers to entry into the labour force may vary across economic sectors. Therefore, sectors that present good opportunities for youth may differ from those chosen for other market systems programmes. Programmes taking the risk of working in experimental markets with a potentially limited evidence base (e.g. ICT, solid waste management, childcare services) – as well as within other aspects of the labour market system – and adapting selection criteria to focus specifically on opportunities for youth have led to a win-win impact on youth employment and sectors.
• Consider an urban setting for faster scale and innovation. Urban and rural areas present different opportunities and challenges for youth. Urban projects may have more complex market dynamics but have a higher impact payoff. Whilst urban programmes may scale relatively faster, programmes focused in rural areas emphasize the inclusivity aspect of youth, and especially young women, in sub-Saharan Africa.

Implementation

• Account for youth aspirations. Plans should be constantly iterated throughout the lifecycle of a programme as youth perceptions and labour market dynamics become better understood over time. These perspectives must be balanced against contextual realities to enhance the effective and sustainable integration of youth into the labour market.
• Recognise youth incentives and opportunity cost. The incentives and opportunity cost of youth may differ from non-youth – often linked to their valuation of time. Factoring these into interventions appear to increase the likelihood of interventions being successfully sustained over time.
• Understand the perceived risk profile of youth within the sector(s) chosen. This can help improve the business model proposed to partners, encouraging them to engage more youth. In some cases, such as in agricultural sectors, youth can be seen as higher risk (or less experienced) while in others they may be relatively more attractive for employers – such as service sectors like ICT, business process outsourcing and tourism.
• Work through partners and channels with youth outreach. Local partners can make or break an intervention. It is important to facilitate interventions by leveraging those who have good youth outreach and can influence strong peer-to-peer networks among youth to help sustain and scale-up labour market interventions.

Having drawn out key lessons from these MSD programmes, what can be said more broadly about the effectiveness of the approach to the challenge of youth and labour markets in sub-Saharan Africa?

On a positive note, we heard of instances where programme interventions had been successfully adopted and replicated by the market, helping to create more and better jobs for young Africans through the market systems development approach.

Despite this, however, it seems the promise of sustainability and scale has yet to be realised in the sub-Saharan African context.

We identified a number of possible reasons for this, including:

• Thin evidence base. There are few well-established market systems programmes in Africa focusing explicitly on youth in labour markets.
• Maturity of programmes. Those programmes that did exist were fairly young, with only one to three years of implementation.
• Trade-off between poverty alleviation and structural transformation. The focus of donors and programmes in sub-Saharan Africa remains largely on immediate poverty alleviation and creating jobs for today, rather than longer-term structural transformation and moving youth to the growth industries of tomorrow.

The challenge of decent work for Africa’s youth is one of huge scale and complexity; there are no silver bullets. The lessons from our research reinforce that taking a systemic approach to youth labour markets is challenging and iterative, but if we apply the lessons learned it could significantly contribute to improving the working lives of young Africans.

Both the ILO and Mastercard Foundation are committed to this goal, and will continue to explore how using a systemic approach can lead to large-scale, sustainable positive change to the working lives of young Africans.

The ILO Lab is committed to exploring this promising area of work further; get in touch if you are interested in collaborating to create more and better jobs for youth using market system.