An Issues Paper

Table of Contents

I. Introduction

II. The Employment Challenge in Africa

• Dimensions of the Employment Challenge
• The Consequences of Poor Employment Performance
• The Ouagadougou Plan of Action: Challenges of Implementation

III. Mainstreaming Employment in National Development

• Mainstreaming Employment in Macroeconomic Policies
• Promoting Structural Transformation and Diversification
• Economic and Corporate Governance for Private Sector and Social Development
• Harnessing Globalisation and Regional Integration
• Integrated Human Resource Development
• Strengthening Institutional Capacities

IV. Conclusion and Issues for Discussion

References

Introduction

1. Employment is one of the basic indicators of the economic health of a nation. The lack of employment results not only in household poverty but also in losses to the economy as a whole in terms of potential output, tax revenues and human capital. Inadequate employment also exacerbates poor human development and restricts social and political participation. For this reason, the UN World Summit in 2005 identified employment as one of the key requirements for achieving the Millennium Development Goals (MDGs).

2. Increasingly, Africa's Ministers of Finance, Planning and Economic Development have been focusing their attention on the pressing issue of increasing employment levels on the continent, as a catalyst for economic development. At the May 2005 Conference of Ministers in Abuja, on the theme "Meeting the Challenge of the MDGs", the Economic Commission for Africa (ECA) presented an Issues Paper that emphasised the role of employment in meeting the internationally agreed development goals. Moreover, in August 2004, the African Union (AU) Ministers of Finance meeting in Ouagadougou, Burkina Faso, issued a Memorandum, stressing the "decisive role of employment in poverty reduction".¹ At the subsequent September 2004 Extraordinary Summit of the AU Heads of State and Governments (AUHSG) on Employment and Poverty Reduction, the AUHSG acknowledged: "Widespread poverty, unemployment and underemployment compromise basic human rights and dignity of individuals and communities affected, and (that) they constitute a threat to social, economic, and political stability". Employment would be placed at the centre of development policies and programmes in Africa, according to the Ouagadougou Declaration (AU 2004).

3. Despite this recognition, an examination of the policy environment in African countries reveals that not enough has been done to explicitly incorporate employment objectives in national poverty reduction strategies and development programmes.

4. The main objectives of this issues paper are:

(a) To outline briefly the nature of the employment challenge;

(b) To elaborate on strategies for embedding employment in national development policies, required for more vigorous implementation of the Ouagadougou Plan of Action; and

(c) To provide an opportunity to deepen commitment to the Ouagadougou Declaration.

5. The aim of this conference is to facilitate the implementation of the Ouagadougou Declaration and Plan of Action as well as inform the theme of the next High-level Dialogue of the UN Economic and Social Council (ECOSOC): "Creating an environment at the national and international levels conducive to generating full and productive employment and decent work for all, and its impact on sustainable development".

6. The expected specific outcomes of the conference include: 1) reaffirmation of the centrality of employment to poverty reduction and development; 2) and facilitating the development of partnerships in employment generation, including the establishment of an employment database and an employment expert's forum to assist Member States to formulate, implement and monitor employment policies and programmes in line with the Ouagadougou Declaration.

II. The Employment Challenge in Africa

7. This section provides a brief description of the main dimensions of the employment challenge and the consequences of high levels of unemployment and underemployment in Africa. The section highlights the challenges and progress made in implementing the Ouagadougou Declaration.

Dimensions of the Employment Challenge

8. Africa's employment challenge has six main dimensions:

(1) Despite appreciable improvement in the level of economic growth on the continent in recent years, aggregate employment growth has been slow relative to population growth. Consequently, the ratio of employed to the adult population in sub-Saharan Africa declined from 69 percent to 67 percent in 2005, while the (official) rate of unemployment persisted at around 10 per cent (ILO 2006).²

(2) The number of the working poor is increasing as a result of the declining number of well-paid jobs and continuing exclusion of a sizeable proportion of the labour force from the benefits of economic growth. Based on the US$1 per day poverty line, there were over 148 million working poor in sub-Saharan Africa in 2005, representing 56.3 per cent of total employment (ILO 2006). Many of the working poor are located in the informal sector.

(3) The level of underemployment in rural and agricultural economies remains high because of the continuing neglect of the rural and agricultural sectors, where most people are employed in low-productivity activities due to low investments, limited access to and linkage with urban markets, dependence on the weather, and limited use of appropriate technology (ECA 2005).

(4) The exclusion of women from high paying job opportunities persists, with significant costs to overall socio-economic development. In 2004, the female labour force participation rate (for ages 15+) was 62.7 per cent, compared to the male labour force participation rate of 85.9 per cent in Sub-Saharan Africa (ILO 2005). Less than 10 per cent of women are in formal employment compared with more than 20 per cent for men, leading a larger majority of women to take up work in unpaid rural or low-paying urban informal jobs.

(5) The high incidence and duration of unemployment among young people, especially the increasing unemployment of graduates, undermine investment in education and constitute a major source of social concern. The youth unemployment rate in sub-Saharan Africa officially³ stands at an average of 21 per cent, driven by generalised lack of employment; high population growth rates; low literacy rates; poor quality education; and skills mismatch (ECA 2002); and

(6) The dearth of employment statistics imposes severe constraint to policy making. Africa is the most under-reported region in the world with regard to employment records. Identifying areas of high employment, monitoring employment performance and formulating employment policies to generate better employment outcomes require reliable, up-to-date and consistent statistics. Many national statistical offices lack the human and financial capacity to collect and disseminate employment data. This is compounded by the growing "informalisation" of the economy, necessitating more innovative fiscal and technical approaches to the production of employment statistics.

The Consequences of Poor Employment Performance

9. Failure to address the high levels of unemployment and underemployment entails significant economic, social and political costs. When an economy fails to generate enough jobs for the labour force, potential production of goods and services is irretrievably lost, lowering the economy's growth potential. In Ghana, for example, it is estimated that for every 1 per cent point labour surplus is greater than the natural rate of unemployment, 0.75 per cent of GDP is lost (Boateng 1994).

10. The situation of high unemployment has contributed to the large migration of youths to Europe and USA. There is a number of indirect effects of unemployment on human development: poverty; social exclusion; skills loss and human capital depreciation; deterioration of physical and human health; family breakdown; and inequality (Sen 1997). Furthermore, high unemployment affects political stability. On the one hand, conflict reduces economic growth, and hence employment, by discouraging investment, disrupting trade and hindering agricultural activity. Lack of employment, on the other hand, ignites and drives conflict through disaffected, unemployed persons (Fosu and Collier, 2005).

11. With clear implications in the achievement of the MDGs, the issue of employment is largely ignored, albeit mentioned in MDG 8 Target 16. Employment provides the main escape route from poverty (MDG 1). In addition, employment can stimulate the demand for children's education (MDG 2) by enhancing returns to education and parents' ability-to-pay. It can also advance the status of women, and help correct the gender disparity in education (MDG 3), as well as furthering progress in maternal health and battling diseases such as HIV/AIDS (MDGs 5 and 6). No less important, labour income enables households to increase child nutrition, thereby reducing child mortality (MDG 4). Finally, broad-based employment has a potential role in combating environmental degradation by promoting alternative opportunities for the poor (MDG 7) (see, for example, Osmani 2005).

The Ouagadougou Plan of Action: Challenges of Implementation

12. In September 2005, as part of the monitoring process, the AU Commission and the regional economic communities (RECs), with the support of the ILO and other UN agencies, convened a meeting to review progress made towards the implementation of the Plan of Action. Key observations presented include the following:

• Member States are implementing various aspects of the Plan of Action, without, for the most part, adopting a comprehensive approach. Without coherent national frameworks for employment generation, employment issues are not adequately embedded in national development programmes.

• Sub-regional and national coordination of implementation and monitoring is weak as a consequence of inadequate human and institutional capacity.

• There is need for further elaboration of implementation strategies at all levels- national and regional.

13. As a result of these conclusions, the AU/RECs meeting recommended technical assistance from ILO, ECA and other partners to develop the capacity of national and sub-regional institutions in the areas of employment policy formulation and monitoring including statistical data collection and employment evaluations.

14. The Ouagadougou Plan of Action proposed a set of 11 key priority areas (see Table 1).

Table 1. Condensed Matrix of the Ouagadougou Plan of Action

Source: AU (2004)

15. The critical implementation challenges underlying the Ouagadougou Plan of Action are as follows:

• Developing the framework for placing employment at the centre of PRSs and other national development programmes, as well as in the NEPAD Priorities, and bilateral and multilateral development cooperation programmes;

• Designing programmes for economic diversification, especially for agricultural and rural economies, that are economically and environmentally sustainable and the methodology for identifying and investing in activities with high employment content;

• Developing labour legislation that is sufficiently attractive to investors and also enhances employment, especially for women and young workers;

• Implementing policies and resolutions towards regional integration;

• Designing human resource programmes that focus on skill development and in particular provide the means to harness the creativity of the human population, especially that of women and young people; and

• Identifying and building of capacity in policy formulation and monitoring.

16. Poverty reduction strategies are currently the principal frameworks for governments and partners in setting development goals and priorities. Hence, they also provide an important channel for pursuing the objectives of the Ouagadougou Plan of Action. Reports presented at the March 2006 African Plenary on Poverty Reduction and the MDGs held in Cairo revealed that two-thirds of the 21 Poverty Reduction Strategy Papers adopted in Africa up to 2005 contained some employment-oriented policy measures such as improved access to education and training; increased access to credit and loans; infrastructure investment; private sector development; agriculture and rural development; and institutional capacity building. However, none of them substantially and explicitly confronted employment issues and challenges. Of those reviewed, however, only Tanzania's PRSP holds adequate employment content in terms of specification of measurable indicators and targets.

17. Several reasons account for the slow pace of integration of employment in national development programmes: 1) the heavy focus of existing macroeconomic framework on price and external trade stability; 2) weak policy formulation capacity, and 3) inadequate fiscal capacity to support job creation. The next section addresses some of these issues.

III. Mainstreaming Employment in National Development

18. This section examines the issue and rationale, as well as suggest a methodology, for mainstreaming employment in national development.

Issues and Rationale

19. Mainstreaming employment in national development in Africa is necessary because of:

• The increasing level of open unemployment and underemployment;

• The widening gap between the expectations of the population in terms of the supply of productive and decent jobs and the actual employment opportunities available; and

• The adverse implications of high unemployment and underemployment for national development.

20. Mainstreaming employment in macroeconomic policy can play an important role in achieving accelerated employment growth by:

• Ensuring political commitment to the goal of employment;

• Facilitating efficient allocation of public budget among competing ends;

• Providing a mechanism for achieving synergies and harmonisation especially in the formulation, implementation and monitoring of national economic and social development goals.

Strategies

21. ECA proposes the following six pillars for facilitating the implementation of the Ouagadougou Plan of Action, which aims at maximising employment in the process of national development:

1. Mainstreaming employment in macroeconomic policies underlying national development;

2. Promoting structural transformation and diversification to expand the base of employment;

3. Promoting governance for private sector and social development;

4. Harnessing globalisation and regional integration;

5. Implementing integrated human resource development programmes; and

6. Strengthening institutional capacities.

Mainstreaming Employment in Macroeconomic Policies

22. Macroeconomic policy provides a great potential for creating jobs in Africa. One of the primary objectives of macroeconomic policy is to ensure full employment. In Africa, it is urgent to feature employment prominently as an explicit objective of macroeconomic policy.

23. For example, fiscal expenditures have strong employment-creating effects both directly through public sector employment and indirectly through employment in private sector firms that provide goods and services for public sector consumption, as well as by providing infrastructure that expands the capacity of the economy to produce. Variations in these expenditures affect employment levels. Conversely, by withdrawing resources from households and firms, taxation can reduce employment, the magnitude of such reduction depending on the type and extent of the tax. For this reason, it is crucial that governments in Africa adopt fiscal policies that go beyond the traditional function of raising revenue for meeting financing needs of government, to achieving high levels of employment.

24. There are three main strategies involved in mainstreaming employment in macroeconomic policies: 1) identifying entry points for employment in macroeconomic policies over the policy cycle; 2) formulating employment-friendly macroeconomic policy instruments; and 3) mobilising and utilising resources for employment creation.

25. Identifying the appropriate employment entry points for mainstreaming employment in macroeconomic policies requires:

1. Explicit inclusion of employment objectives, measurable targets and indicators in the macroeconomic framework in the same manner in which other economic objectives and targets, as for example growth and inflation, are set;

2. Systematic promotion of mutually reinforcing policy actions across government departments and agencies, creating synergies in support of agreed employment goals, with Ministers playing a key part in coordinating employment promotion activities through their role in approving spending priorities during the annual budget cycle, as well as consultations with multilateral development agencies and other development partners;

3. Establishment of employment monitoring mechanisms within the framework of macroeconomic policies; for example, through the establishment of appropriate institutional structures within line ministries;

4. Involvement of employment stakeholders, notably, ministries responsible for employment, workers' and employers' representatives, in all phases of the policy cycle, from the identification and analysis of employment issues, formulation of strategic interventions, and implementation, to monitoring and evaluation of employment outcomes and impacts; and

5. Adapting macroeconomic management systems and processes of the Bretton Woods institutions (and the UNDAF group), which assist African countries in the formulation and monitoring of macroeconomic policies.

Formulating Employment-friendly Macroeconomic Policies

26. A major aspect of an employment-friendly macroeconomic policy is its growth orientation. Economic growth provides the wherewithal for employment creation; hence, employment-friendly macroeconomic policy must first and foremost be growth promoting, by facilitating savings and investments, and ensuring export growth. Another aspect of employment-friendly macroeconomic policies is the "optimal" mix of instruments that will ensure a simultaneous acceleration of growth in GDP and employment, while maintaining stable macroeconomic conditions (see Table 2 for examples).

Table 2. Examples of Employment-Friendly Macroeconomic Policies

Source: ILO-ECA (2006) forthcoming

Earmarking Public Expenditure and Revenues for Employment Creation

27. Within the framework of macroeconomic and national development policies, efforts should be made to explicitly earmark particular revenue mobilisation activities for investment in employment-generation programmes. Since revenue earmarking could have implications for the efficient allocation of public resources, such a strategy should be used only in the short-term. An example of such a strategy will be the allocation of a certain percentage of revenues from taxes on imports of books and other published materials to special employment programmes.

28. A central aspect of this strategy is the monitoring of public expenditures to ensure cost-effectiveness, better outcomes and better understanding of the linkages between job creation, on the one hand, and overall development, on the other. Existing mechanisms for tracking public expenditures, such as the Public Expenditure Tracking Survey (PETS) and for establishing linkage between development objectives and required public expenditures such as provided by the Medium Term Expenditure Framework (MTEF), could be re-designed to incorporate employment creation activities and objectives.

Country-Specific Strategies: The Special Case of Post-Conflict Countries

29. The macroeconomic structures, including the structure of employment and labour markets, and governance frameworks in African economies differ widely. Hence, there is the need to develop country-specific strategies for mainstreaming employment in macroeconomic policies. In particular, special accommodation is necessary for post-conflict countries and for the African Least Developed Countries (LDCs).

30. Post-conflict countries face capacity constraints in the design and implementation of macroeconomic policies because of resource shortages vis-à-vis the requirement of rebuilding economic and social life, while maintaining political stability. In this situation macroeconomic policies should go beyond stabilisation objectives, and focus - at least in the short run - on meeting the need for "collective security" through growth supported by broad-based employment generation. Reconstruction and peace-building programmes should have employment components that include public works programmes and targeted skill training for demobilised soldiers. Fiscal space is critical for such countries.

Promoting Structural Transformation and Diversification

31. The main thrust of an employment-focused strategy for structural transformation includes: 1) building production capacity by mobilising and steering investments and human resources into selected sectors, and through schemes such as fiscal incentives and skills development that enhance returns to such investments; 2) stimulating effective demand for the output of the selected sectors, through market access-creating and demand-switching policies and by strengthening their linkages with other sectors; and 3) developing and utilising labour resources as core inputs in the installation and operation of physical infrastructure to support the process of economic transformation and diversification. The main components of the implementation include the following:

Identifying Labour-absorbing Sectors

32. The primary step is to undertake a critical assessment of the employment absorption capacity of the various sectors and production activities in the economy. Such assessments should yield insights into the factors underlying the differential employment intensities among sectors and activities such as the effects of macroeconomic policies on the wage-rental ratio, available technology and skill-mix. To design investment relief and similar fiscal incentives packages that maximise "decent employment" over the long run, careful analysis is required of the trade-off between "mass employment" generated through low cost investments on the one hand, and "quality jobs" generated through high-cost investments on the other. ⁴

33. In the foregoing analysis, it is imperative to distinguish between direct and indirect job creation via linkages between sectors. For example, agriculture is the most labour-intensive sector in the South African economy, employing 18.6 workers for every 1 million Rands (R) of output produced. The sector also generates other jobs through linkages with other sectors, resulting in a combined total of 27.9 jobs for R1 million in sales, as shown in Table 3. In contrast, agro-processing is not very labour-intensive with 2.3 workers per R1 million in output; however, demand for its final products generates a total of 18 jobs per R1 million of sales. Furthermore, employment in agro-processing provides relatively "decent" wages compared to agriculture; hence "effective" employment may actually be higher in agro-processing.

Table 3. Employment Generation in South Africa by Industry

Note: Figures in () are rankings.

Source: Pollin et al. (2006)

Enhancing labour mobility in tandem with re-allocation of investments

34. Strategies to improve labour mobility to match the reallocation of investment among sectors are required. These include:⁵

• Modernisation of labour regulations to reflect increasing flexibility in the organisation of production and work, and the need to accommodate an increasing number of women and young people in the labour market, taking into account increased local competition to ensure that labour market regulations do not hinder job creation, nor undermine social protection;

• Reduction in labour mobility costs through better transport links and housing, and decentralised and targeted training programmes to enhance the skills of especially young workers and the poor; and

• Facilitation of labour market information flows for employers, job seekers and government to reduce skills mismatch.

Adopting Appropriate Short-term Pro-employment Schemes

35. Within public budgets, programmes and projects that have low requirements in terms of capital but high returns in terms of labour employed may be adopted as "short-term measures" to promote employment in the short term. The following labour-intensive public works programmes may be considered:

• Urban sanitation programmes: engaging the urban unemployed to assist in street cleaning, and rehabilitation of public infrastructure, for example;

• Rural forestation and soil conservation: engaging underemployed youth in rural areas to assist in tree planting, and disease control, among others; and

• Road construction and maintenance, and building water management and irrigation systems.

36. Such programmes have already been incorporated in some African poverty reduction strategies. For instance, Rwanda has focused on labour-intensive public works as a vehicle for job creation in their PRSP. However, the biggest constraint for African governments in this area is not only the cost of implementation but also the optional policy space allowed by donors who provide the bulk of the funding for public capital projects.

Exploiting ICT potentials

37. The information and communication technology sector provides a large potential for generating employment in Africa as demand for ICT products and services is increasing. Given the digital gap between Africa and the rest of the world, the catch-up requires momentous manpower. Further, ICT has the capacity to augment production possibilities. Mobile telephony and Internet services are creating new employment opportunities for Africans even in rural areas through telecentres. Furthermore, the introduction of ICTs throughout the economy allows each industry to develop new functions, improve product-related services and supply customized products and services. ICT also offers a high potential for the transfer of technical, managerial, and online learning skills, among others. Finally, ICT offers several applications that ease business operations such as in accounting and management. Notably, in some countries in Africa the percentage of jobs requiring ICT skills has increased from under 2 per cent in the 1980s to over 40 per cent in 2000.

38. Governments must support investment initiatives in the sector. For instance, venture/risk capital is required for innovation and business development, as well as investments and project financing for the ICT industries, particularly the software and IT-enabled services sector. Some major challenges for strengthening and sustaining the ICT sector for employment opportunities include the need for investment in human resources, capital, infrastructure, and science and research.

Improving agricultural and rural living conditions

39. The most significant challenge here is to diversify the rural economy and improve agricultural productivity. In this respect, African countries must consider:

• Integration of rural development programmes and, in particular, the supply of utilities, social amenities and public services such as education and health, in national development programmes, and strengthening the linkages between agriculture, rural non-farm activities, and especially the services sector, including transport, storage, processing and marketing;

• Adoption and application of the concept of "localised African green revolution", complemented by agro-processing support schemes; and

• Development of modalities for establishing and financing the proposed Agriculture Commodity Exchange at district, national, regional and continental levels.

Economic and Corporate Governance for Private Sector and Social Development

40. The employment strategy in governance should be built around three main approaches: promoting an employment-friendly competitive business environment; recognising and enhancing the role of the informal sector; and facilitating effective operations of the labour market to cater for both enterprise and social development.

41. Key strategies include:

Establishing an employment-friendly competitive business environment

42. To stimulate investment and job creation, especially in high employment sectors, investment and business promotion packages should have explicit employment objectives. In addition, periodic assessment of the regulatory environment should be undertaken to determine the extent to which the cost of doing business in the economy is affecting the establishment of new businesses and the generation of new employment. More specifically, careful attention should be paid to property rights, contract enforcement, licensing costs and procedures, and competition policy that influence investments in the local economy.

Recognising and enhancing the role of the informal sector

43. Though the informal sector has largely been a location of last resort for job seekers and enterprises, it does potentially have an important role in creating jobs as the sector accounts for almost three-quarters of non-agricultural employment in sub-Saharan Africa. The informal sector is characterized, however, by low wages, long working hours, poor health and safety standards, high job insecurity, absence of worker representation and few opportunities for skill enhancement. This sector also contains a high concentration of women, youth and vulnerable groups.

44. Governments must promote, in particular, the informal sector's ability to create decent work in the following ways: improving access to credit and insurance for businesses; developing and enforcing property rights; increasing flows of information and technology; and providing incentives for and access to training.

Embedding social development in labour market operations

45. Economic processes are increasingly generating conflictual outcomes, while exposing segments of the population to vulnerabilities arising from increased competition exacerbated by globalisation. Labour market conflicts affect investment and lead to output losses, whilst social vulnerabilities undermine inclusive development. It is therefore crucial to promote techniques of social dialogue and tripartism in enterprise and national economic management.

46. Social development also requires the establishment of mechanisms for minimising the vulnerability of the population to both internal and external shocks such as the provision of job training. Macroeconomic policies, especially fiscal and financial interventions, must facilitate the entry of women, youth and vulnerable groups into high paying economic activity by providing access to education and training, micro credit facilities, and basic transport and housing, especially in urban areas.

Harnessing Globalisation and Regional Integration

47. Globalisation is a major driver of economic growth and job creation. However, the process of opening up an economy and the resultant increase in external competition pose major challenges, especially in terms of job loss in domestic industries.

48. Harnessing the benefits of globalisation and minimizing its costs require specific strategies at the national, regional and global levels:

1. At the national level⁶: Member States must embed employment criteria in investment promotion packages, especially for foreign direct investment (FDI); maintain stable macroeconomic environment; develop local human capital; support export sectors with high employment content such as horticultural exports; harmonise employment policies with regional economic partners; revise human versus physical infrastructure investment for appropriate complementarity and sequencing; and establish schemes for the protection of vulnerable groups and losers from globalisation and regionalisation.

2. At the regional level: Member States must, in the context of the 1994 Abuja Treaty and NEPAD, harmonise economic and social policies, including regulations on the movement of labour, and ratify bilateral and regional protocols on cross-border trade, investments and labour movement (ECA 2004).

3. At the global level⁷: Member States must utilise opportunities offered by the global community, especially the UN General Assembly, to secure fair returns from international investments and migration of labour; for example, Member States must actively participate in the establishment of the proposed Global Migration Group/Forum aimed at launching initiatives for building the capacity of developing countries to benefit from international migration, through for example utilisation of Diaspora expertise and facilitation of immigrant remittances.

Integrated Human Resource Development

49. The lack of linkage between human resource development (HRD) institutions and the labour market (that is, employers) has resulted in a skill mismatch in most African countries. In turn, this has adversely affected aggregate labour demand due to high screening costs and reduced returns to education in general.

50. To address this situation, an integrated HRD programme should be implemented, driven by two main strategies, namely, strengthening the capacity of education and training institutions to produce skills required by the economy, and strengthening the linkage between the human resource sector and other sectors of the economy, notably, printing and publishing, and ICT. A component of the integrated HRD strategy is to implement active labour market policies or programmes, involving job search assistance, labour market training, self-employment training, and access to credit/grants and other business requirements that aim to improve the situation of individuals who are unemployed or out-of-the labour force. One solution is establishing a National Skills Building Fund to provide resources for training activities. Such initiatives must be tailored to meet the needs of women and young people.

A Regional/Global Approach to HRD

51. In view of national capacity limitations as well as the reality of international labour mobility and the consequences of brain drain, among others, national HRD policies should be implemented with a view to regional and global labour markets. At the regional level, ECA (2004) recommends a number of strategies, in line with the Abuja Treaty and NEPAD: harmonising education policies; developing core curricula and teaching materials; establishing distance education, education planning and management cadres, digital libraries and databases for academic research outputs and other information.

Strengthening Institutional Capacities

52. The main aspects of the capacity of African countries to promote employment generation include: a) capacity to formulate, implement and monitor employment policies, including data collection, storage and dissemination; and b) capacity for regular assessment and analyses of employment issues. To deal with these issues requires:

1. National, regional and global partnerships for formulating, implementing and monitoring employment policies - The support of development partners is needed not only with regard to funding but also in the provision of policy space that enables Member States and African LDCs and post-conflict economies, in particular, to initiate and implement employment expansion plans especially for vulnerable groups;

2. Strengthening national statistical offices - Rigorous empirical analysis of employment issues requires consistent and reliable data, and ultimately, the choice of employment indicators for macroeconomic policy may be constrained by data availability;

3. Improving the supply of employment specialists to national planning offices - Human capacity is required in the identification of employment issues, policy formulation, and the monitoring and evaluation of the employment situation on a regular basis. The role of employment analysts in national development programming has to be properly recognised and resourced;

4. Disaggregated statistics - National statistical offices should also ensure that disaggregated data are collected to facilitate analysis of the situation of women, youth and other social groups in the labour market;

The Role of ECA and Partners

1. Establishing a regional employment forum of technical experts and policy facilitators: This forum, to include the AU, ADB, ILO, ECA and the RECs as well as country level stakeholders, should assist Member States in the development of capacity especially for monitoring employment outcomes; to facilitate learning and experience sharing; undertake in-depth analysis of employment issues in the region, including the design of resource mobilisation strategies; and prepare and disseminate periodic multi-stakeholder reports on the regional employment situation;

2. Developing a comprehensive employment-friendly macroeconomic and national development policy framework: Over the medium-term 2006-2009, ECA in collaboration with its partners should develop a comprehensive regional framework and assist Member States to develop their own national frameworks in line with policy suggestions provided above;

3. Developing a plan of action to extend the proposed ECA study on the development of statistics on the informal sector in order to provide more information and facilitate the promotion of employment in the sector.

IV. Conclusion and Issues for Discussion

53. African countries continue to suffer from high levels of unemployment, underemployment and a lack of decent work, in spite of numerous initiatives to generate employment. The Ouagadougou Declaration and its Plan of Action provide a new opportunity to reverse the inaction of the past. This Issues Paper has presented strategies for meeting the challenge of employment in Africa, thereby assisting with the implementation of the Ouagadougou Plan of Action. The first step is to embed employment in national development frameworks, which will require national, regional and global partnerships in building capacity and in mobilising resources. The following issues should facilitate further in-depth discussion and elicit information on country experiences on these important topics.

Issues for Discussion

Policy formulation and implementation issues

• There is a wide gap between employment policy initiatives and their implementation. What factors constrain African governments in implementing employment initiatives? What lessons can be learnt from national attempts to embed employment in macroeconomic policies? What lessons can be learnt from the experiences of African governments in their attempt to develop and implement broad-based employment initiatives that provide opportunities for all segments of society?

• Agriculture has a strong potential for generating employment. How should macroeconomic policies address agriculture vis-à-vis its potentials?

• Human resource development (HRD), including ICT skills development, should be integrated into national development. What are the key entry points?

Role of Finance, Planning and Economic Development Ministries in employment generation

• Integrating regional labour markets may be necessary for overcoming labour immobility and for promoting full employment in Africa. What are the constraints and risks to regional labour market integration? What is the role of Ministers of Finance, Planning and Economic Development in resolving this?

• Some say it is a luxury to talk about labour standards in Africa where there is mass unemployment and generalised poverty. Can African countries really enforce labour standards? Should there be a gradual approach in the enforcement of labour standards? What is the role of Ministers of Finance, Planning and Economic Development in this?

• Globalisation and regionalisation generate both losers and winners. What options are available especially in the fiscal realm for enhancing national competitiveness? What role should Ministers of Finance play in addressing these issues including youth migration from Africa?

• African LDCs, especially the post-conflict countries, face severe technical and financial constraints that limit their ability to adopt bold approaches in employment promotion. How can sufficient fiscal space be created for such countries?

Role of Regional Institutions in the African Employment Agenda

The Ouagadougou Declaration recognises the important roles of regional institutions including AU, ECA, ILO and other UN agencies alongside the private sector, research institutions and civil society in the implementation of the Ouagadougou Declaration. What should be the role of a regular experts' or stakeholders' forum in this? What support can Ministers of Finance, Planning and Economic Development give for such a forum to be effective in terms of its impact on the design and implementation of employment policies in Africa?

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1 Memorandum of African Finance Ministers to the Extraordinary Summit of Heads of State and Government on Employment and Poverty Reduction, Ouagadougou, August 2, 2004.

2 It should be noted that due to measurement problems the official unemployment rate understates the true magnitude of the number of people without work or underemployed.

3 See footnote 2.

4 High-labour content may not necessarily ensure employment maximization in the long run.

5 See, for example, Fosu (2004)

6 See, for example, Fosu (2004)

7 See, for example, Langmore (2004)