Department of Agricultural, Food, and Resource Economics Feed the Future Innovation Lab for Food Security Policy

F. Kwame Yeboah and Thomas S. Jayne. 2016. Africa’s Evolving Employment Structure. Feed the Future Innovation Lab for Food Security Policy Research Paper 31. East Lansing: Michigan State University

HIGHLIGHTS
Major economic and demographic transformation has been underway in Africa since 2000, characterized by rapid but highly variable rate of labor exit from farming to off-farm employment. Variable urbanization patterns across countries. Share of urban workforce rising rapidly in most countries (e.g., Tanzania, Ghana,) but declining in some countries (e.g., Rwanda and Nigeria). Over 60% of the workforce still resides in rural areas.Pace of economic transformation in last decade linked to agricultural productivity growth. Off-farm employment is growing at a faster rate in rural areas than in urban areas. Employment in off-farm segments of the agri-food system is growing rapidly in percentage terms, but starting from a very low base and generates less number of new jobs than farming. There are many more jobs opening up for young people and the entire workforce in the non-farm sectors of the economy than in off-farm segments of the agri-food system. Farming accounts for the largest share of total number of new jobs in most countries but the largest share of new FTE jobs comes from non-farm sector outside the agri-food system. Public investments that raise labor productivity in agriculture will be essential to absorb the growing labor force into gainful employment.The economically inactive comprise 30% or more of the youth population (15-24 years), reflecting major increases in education and training. Africa’s labor force in 2030 will be substantially better educated than it was in 2000.Rising rural unemployment particularly in countries experiencing rapid declines in farming’s share of employment (e.g., Rwanda, Zambia). Youth and females are more likely to be unemployed and economically inactiveRapid percentage growth in wage employment particularly in private sector but from low initial base. Hence, self-employment and informal sector jobs will remain a key feature of African economies at least in the next few decades.