Jump to ContentJump to Main Navigation
Development In AfricaRefocusing the lens after the Millennium Development Goals$

Hany Besada and Timothy M. Shaw

Print publication date: 2015

Print ISBN-13: 9781447328537

Published to Policy Press Scholarship Online: May 2016

DOI: 10.1332/policypress/9781447328537.001.0001

Show Summary Details

Employment creation for youth in Africa: the role of extractive industries

Employment creation for youth in Africa: the role of extractive industries

Chapter:
(p.169) Six Employment creation for youth in Africa: the role of extractive industries
Source:
Development In Africa
Author(s):

Bernadette Dia Kamgnia

Victor Murinde

Publisher:
Policy Press
DOI:10.1332/policypress/9781447328537.003.0007

Abstract and Keywords

The youth in Africa, as elsewhere, have aspirations to become active citizens and contribute to the development of the continent. Unfortunately, the African youth are among the 75 million of 15 to 24-year-olds globally that the ILO indicates are looking for a job, and not to be excluded from the 262 million of young people that the World Bank surveys describe as economically inactive in emerging economies. Young people face several challenges when entering the labour market, particularly in developing economies. Not only do they need to find a job, and preferably one that corresponds to their level of qualifications, but also they want to develop a foundation for a lasting, stable employment relationship that helps them to progress in life. Africa’s youths are firmly entrenched in the group. This chapter analyses the role of extractive industries in job creation for the youth in Africa. The structure of youth unemployment is first presented, followed by an analysis of the human resources contradictions in extractive industries. Strategies to unleash job opportunities in extractive industries are finally appreciated. What should be the nature of industrial and other policies that can generate job-based growth?

Keywords:   jobs, youth unemployment, Africa, industrial policies, extractive industries

Introduction

Singular among the economic challenges facing African countries today is the issue of youth unemployment. Almost 200 million of the population in Africa, equivalent to approximately 17 per cent of the population in 2015, is in the age range of between 15 and 24 years old (AfDB, 2013a). Essentially, in the majority of African countries, young people represent a significant proportion of the total national population. Unfortunately, they constitute the bulk of the unemployed in Africa, irrespective of their school qualifications. And young women are the most likely to be out of the labour market in many African countries, due to entrenched gender biases.

There are many causes of youth unemployment. It is attributed either to the lack of prioritisation of job creation in development policies, or to the socioeconomic environment, without ignoring the negative impact of the structure of African economies and the educational system.

But African economies have been growing healthier since the late 1990s, with an increasing number of African countries engaging or upgrading in global value chains such as agriculture, tourism and manufacturing. Interestingly, governments have been firmly engaging in affirmative actions in favour of youth employment.

The contention in this chapter is that in the current supportive economic environment, Africa must leverage opportunities in the extractive industries1 by enhancing value addition and converting these into jobs for its growing youth. Indeed, the extractive industries sector suffers from a skills shortage and an apparent low capacity for job generation.

This chapter is structured into five sections. The next section highlights the key aspects of the youth unemployment challenge (p.170) in Africa. The third section reviews the African heads of states’ Declaration of Intent on the Joint Youth Employment Initiative for Africa (JYEIA), pointing to the need to give due consideration to a keen blend of policy, direct actions and knowledge production. Evidence on the booming of the extractive sector is highlighted in the fourth section. The fifth section examines the means for mobilising partnerships in catalysing opportunities in the extractive industries into youth employment in Africa, and some policy recommendations are offered.

Youth employment: a dire challenge in Africa

As noted earlier, Africa has the youngest population in the world, and it is critical to invest strategically in order to reap the demographic dividend.

Young people constitute the bulk of the unemployed in Africa

It is largely believed that with a population growth of 2.2 per cent per year and a fertility rate of 5.2 children per woman, the highest in the world, the number of young people in Africa will double, to constitute 29 per cent of the total world youth population by 2050 (AfDB, 2011; AfDB et al, 2012; ILO, 2012a).

According to the United Nations (UN) Focal Point on Youth, close to 75 million young people worldwide were unemployed in 2012, which is 12.6 per cent, three times the global adult unemployment rate of 4.5 per cent (ILO, 2012a,b, 2013).2 Youth unemployment has become a challenging issue globally, but remains a greater barrier for the economic and social development of the African continent. As reported by the International Labour Organization (ILO) (2013, p 116), North Africa records the highest youth unemployment rate, whereas the rate remained around 12 per cent in Sub-Saharan Africa since 2005, well above their 2000 levels of 13.3 per cent, as shown in Figure 6.1. Nevertheless, irrespective of the region, the youth unemployment rate has been consistently twice that of adults from 2000 to 2012.

These rates are even higher in some countries. Indeed, the 2013 ILO report indicates that in South Africa, the rates are much higher than the regional average, and over half of the young people in the labour force were unemployed in the first three quarters of 2012. In Namibia, youth unemployment was 58.9 per cent in 2008, and in Réunion, it was 58.6 per cent in 2011 (ILO, 2013). Beyond country (p.171)

Employment creation for youth in Africa: the role of extractive industries

Figure 6.1: Unemployment rate for youth and adults in Africa (%)

Source: Constructed based on data from Table A3 of ILO (2014, p 120)

specificities, the gender structure of youth unemployment merits some close consideration.

Young women are the most likely to be unemployed in Africa

Using a gender lens, the youth unemployment rates for males and females in Morocco were fairly close in 2011: 18.1 per cent for young men and 17.4 per cent for young women (ILO, 2013). This was also the case in the 2000s (see Figure 6.2). In Tunisia, young women were slightly better off than those in Algeria and Egypt in the 2000s, but in

Employment creation for youth in Africa: the role of extractive industries

Figure 6.2: Gender lens of youth unemployment in North Africa (%, 2000–09)

Source: Constructed based on data from Table 9.3 of The World Bank (2011, p 102)

(p.172) the same period, Egyptian young women were far more likely to be unemployed than young men, as revealed by Figure 6.2. This structure was also reported for Algeria in 2010, which had an unemployment rate of 37.5 per cent for young women compared to 18.7 per cent for young men.

The unemployment rate was generally high in Sub-Saharan African countries such as South Africa, Namibia, Ethiopia and Botswana (see Figure 6.3), but the gender bias towards young women was relatively lower in Sub-Saharan Africa than in North Africa, as shown in Figure 6.3.

In terms of individuals out of the labour force, The World Bank (2009a) reports that young women’s labour participation rates were likely to be the most affected in Sub-Saharan Africa by unemployment in the early 2000s, with a regional mean of 58.0 per cent for young women and 52.3 per cent for young men, as depicted in Figure 6.4.

As can be seen from Figure 6.4, the distribution of young men and women according to job status in the 14 countries surveyed by The World Bank (2009a) follows a similar pattern to the regional mean. But Kenya, Mozambique, Mauritania, Malawi, Nigeria and Uganda revealed the greatest number of young people out of the labour force, whereas Sao Tomé and Principe had the largest gender unemployment gap. Following this World Bank survey analysis, a number of facts ‘conspire’ to keep female youth out of the labour force in Sub-Saharan Africa. These factors are related to the type of the jobs available, the skills of the jobseekers, or to the marital status of the individuals in the two groups. The survey results demonstrate that even though women tend to work more hours than males, they are more likely to engage in non-market activities.

The survey also revealed that young women had lower levels of school attainment and school enrolment, which is rather common to African countries. For instance, in 2005, the male and female net school enrolment ratios in Africa were 71 and 65 per cent in primary education and 28 and 23 per cent in secondary education respectively, whereas the male gross school enrolment ratio in tertiary education was 6 per cent, while that of women was 4 per cent (The World Bank, 2009b). Indeed, in many African countries, most female youth have already been married before the age of 24, and the majority of them prioritise motherhood at the expense of education and participation in the labour force. All these factors merely define women in the vulnerable working group, irrespective of their age. McKinsey & Company (2012) further underscore that, even when women own businesses and become job creators, the numerous (p.173)

Employment creation for youth in Africa: the role of extractive industries

Figure 6.3: Gender lens of youth unemployment in Sub-Saharan Africa (%, 2000–09)

Source: Constructed based on data from Table 9.3 of The World Bank (2011, p 102)

(p.174)
Employment creation for youth in Africa: the role of extractive industries

Figure 6.4: Distribution of young men and women by job status (%)

Source: Constructed based on data from The World Bank (2009a, p 9)

(p.175) constraints they face – such as access to capital and land, and a low level of education – leave female-led small businesses on the low productivity side.

The debates about the roles of the extractive sector come at a moment when Africa is seeking its rapid transformation, and envisions driving an industrial revolution using local people. In this regard, the challenges of youth unemployment must be part of the larger agenda. Indeed, a number of affirmative actions are being explored to support effective youth employment interventions.

Affirmative actions for youth employment

In the face of the current favourable economic growth conditions in Africa, and the commitments governments are adopting at their summits (for example, the Common African Position [CAP] on the post-2015 agenda), policy, direct actions and knowledge production must be best blended and entrenched for sustaining job creation for young people in Africa.

Favourable economic environment for youth employment creation in Africa

The causes of youth unemployment are numerous, ranging from lack of prioritisation of job creation in development policies to the socioeconomic environment, through to the structure of African economies and educational systems. Job creation schemes either remain non-existent or were not activated by development policies. The majority of African economies are dominated by a multifaceted informal sector. In some Sub-Saharan African countries, the informal sector comprises as much as 90 per cent of non-agricultural employment. This tends to be the case for at least two reasons. First, it is believed that African university graduates barely meet labour market demands in a number of African countries due to a skills mismatch. Second, in many cases socioeconomic environments are flecked by tensions and conflicts, and are thus likely to push active populations into the informal sector. Fortunately, a great number of African economies have been growing healthier since the late 1990s.

Indeed, it is widely admitted that six of the ten fastest growing economies in the period 2001-10 were in Africa: Angola, Nigeria, Ethiopia, Chad, Mozambique and Rwanda. Moreover, the prospective views on Africa’s growth from 2011 to 2015 brought into the growth outlook countries such as Tanzania (7.2 per cent), Democratic (p.176) Republic of Congo (DRC) (7 per cent), Ghana (7 per cent) and Zambia (6.9 per cent), while Ethiopia (8 per cent), Mozambique (7.9 per cent) and Nigeria (6.8 per cent) (The World Bank, 2011). On a regional stand, West Africa and East Africa are forecast to maintain their ranking at the top of the continental growth array, with 7.1 and 6.2 per cent in 2015 respectively (AfDB et al, 2014). More interestingly, while the growing diversification of African economies shelters them against external shocks, growth episodes are getting longer in Africa.

African economies have also been integrating into global value chains that best map the continent’s resource endowment, with some cases as presented in Table 6.1, below.

Extractive industries, tourism, services and agriculture have the largest share of integrated economies, as shown in Figure 6.5. Should agriculture be conceived on a more aggregate view to include horticulture, then the agriculture value chain would also be one of the well-integrated value channels in Africa.

Biofuel value chains are also expanding on the continent. Kenya, Uganda and Ethiopia are upgrading their horticulture value chain, whereas the value chains of palm nuts for vegetable oil and soap must be nurtured in countries such as Côte d’Ivoire and Cameroon. Other agricultural value chain experiences are sorghum for the production of

Table 6.1: Participation of selected African countries in GVCs

Extractive industries

Agriculture

Horticulture

Fishing

Construction/manufacturing

Textile

Animal husbandry/leather

Tourism

Services

South Africa

Botswana

Kenya

Nigeria

Morocco

Senegal

Uganda

Mozambique

Zambia

Madagascar

Source: Constructed using value chain participation information in country notes in AfDB et al (2014)

(p.177)
Employment creation for youth in Africa: the role of extractive industries

Figure 6.5: Degree of integration of some value chains in Africa

Source: Constructed based on the information in Table 1 (AfDB et al, 2014)

beer, bananas to make drinks, and exports of mangoes, garlic, onion, tomatoes, pineapples and avocados.

Essentially, the extractive sector has economic potential for creating new jobs and ultimately for reducing poverty. Development partners and governments in Africa are joining their planning and financing efforts to tackle the problem of youth unemployment on the continent.

Targeted actions for youth employment in Africa

On 12 September 2013, the African Union Commission (AUC), the African Development Bank (AfDB), the United Nations Economic Commission for Africa (UNECA) and the ILO signed a Declaration of Intent on the Joint Youth Employment Initiative for Africa (JYEIA). This spells out the duties of the four parties in the creation of employment to accelerate youth development and empowerment, underscoring three areas of intervention: policy-level intervention, direct intervention and knowledge production. Direct action provides hands-on solutions to the problem, and a sound policy ensures the sustainability of the interventions, whereas success stories are disseminated through knowledge produced.

(p.178) Many more actions have been launched since the mid-2000s, in support of effective employment interventions. In 2006,3 the AU heads of states endorsed the JYEIA Charter geared towards strengthening, reinforcing and consolidating continental and regional partnerships and relations. It entered into force on 8 August 2010, having been signed by 37 countries and ratified by 21. Equally, the Assembly of heads of states and governments of the AU4 declared 2009-18 as the Decade on Youth Development in Africa as well as approving a plan of action in line with international consensus on the International Year of Youth 2010 (ILO, 2012b). As a follow-up, at their July 2011 summit in Malabo, the deliberation of the AU heads of states led to the declaration to advance the youth agenda by adopting policies and mechanisms for the creation of safe, decent and competitive employment opportunities (ILO, 2012b).

The ILO (2012b, p 105) recorded a number of these programmatic interventions for creating youth employment in Africa in terms of their geographic distributions, thematic areas, milieus of residence in specific countries, strategic approaches and implementation modalities, partnerships in implementation, modes of financing, targeted beneficiaries and special priorities, notably young women, and disabled and unemployed young people. Unemployment programmes are scattered over the regions, mapping almost all the 54 countries. Overall, these interventions included as thematic areas employment creation, skills development, employment services, integrated services and others, but employment creation and skills development were given the highest priority across the continent. Moreover, interventions were developed in due recognition of the unemployment gap between the rural and urban areas of Africa. In effect, unemployed and under-employed youth are not only in a greater number in rural Africa, but rural youth also face more acute challenges in accessing job opportunities. In their implementation, the interventions pull together as many development partners as possible, but without advocating for a one-size-fits-all solution to the youth employment challenge (ILO, 2012b, p 68).

Governments in Africa are going beyond declarations adopted at their various summits. Some are mainstreaming employment in their national employment policies and national development frameworks in an attempt to address concerns for youth employment. For instance, the Ethiopian national development Growth and Transformation Plan for the period 2010-15 set employment creation as a priority, with a firm commitment to mainstream women and youth issues across all development plans – women and youth empowerment (p.179) and equity is one of the pillars of the strategy. Others put in place frameworks to elaborate shared programmes, with UN agencies and/or multilateral development banks. Examples include the ILO (2012b) joint programme that emphasised community participation either in the identification, design and/or implementation, as in Côte d’Ivoire, Liberia, Zimbabwe and Mozambique.

In sum, either for youth or for adults, Africa has upheld the urgent need to create jobs for its growing population in the last decade or so. Agriculture, household enterprise and services (either wage or hospitality) have generated the bulk of jobs in Africa, and are expected to lead in the creation of new jobs. The question is to know what contribution the extractive industries could make. Could the extractive industries, in their expansion in Africa, be part of the solution for youth employment?

Potential for youth employment in the extractive industries

Africa must leverage opportunities in the extractive industries to create productive and decent jobs.5 Certainly, relevant partnerships could unleash job opportunities in the extractive sector.

Extractive industries, a booming sector

More than 250 million Africans live in countries where natural resources account for more than 80 per cent of exports, and in some cases, more than 50 per cent of government revenues (The World Bank et al, 2010). In the specific case of the extractive industry, the investment projects implemented by large multinational and national companies are growing exponentially, encouraged by the numerous recent natural resource discoveries and increasing demands. According to Ramdoo (2012), Africa has about 30 per cent of the world’s extractive resources, and produces over 60 different types of metals, ores and minerals.

The boom and bust of gold-mining projects in a number of West African countries is noteworthy, particularly in Ghana, Burkina Faso, Mali, Mauritania, Liberia and Sierra Leone, where a significant rise in gold prices between 2007-12 stimulated further exploration and development of projects in these countries over the five years, and the reverse happened when prices decreased in 2011.

For oil, it is believed that over 10 per cent of the world’s reserves are in Africa, which constitutes over 12 per cent of the global market. (p.180) Ramdoo (2012) highlights that new discoveries of hydrocarbons show that Sub-Saharan Africa is home to some 115 billion barrels of oil, of which 75 per cent are offshore in the Atlantic Ocean. The same estimates portrayed Africa as hosting some 744 trillion cubic feet of gas, most of it stacked offshore off East Africa, mainly in Tanzania, Mozambique, Madagascar and Seychelles. Of course, the persistent upward shift in oil supply coupled with the sluggish global economic recovery, including in the European Union (EU), and the lower than expected growth in China and other emerging countries, has pushed the price of crude oil down to a historic five-year low, as at December 2014. Over the first quarter of 2015, oil prices lunged even deeper, at levels lower than the 2009 rates, rising slightly to around US$60 per barrel by late April of 2015 (Global Finance Magazine, 2015). The anticipated negative impacts of this price downturn might slow down oil exploitations and decelerate ongoing explorations.

Beyond oil, Africa has the largest reserve of bauxite, cobalt, industrial diamonds, manganese, phosphate rock and platinum (Ramdoo, 2012). The trends in mineral discoveries set the extractive sector as a firm driver for Africa’s transformation. Strategies and appropriate policies must therefore be designed and put in place in order to unleash job opportunities in the sector.

Diverse job opportunities in the extractive industries, with specific skills requirements

Globally, three major categories of activities shape the extractive industry: (i) activities pertaining to the extraction of raw materials from the earth; (ii) the processing of extracted minerals for sale or commercial use in construction, building, road or manufacturing works; and (iii) transport and storage, which ensure overall connections within the industry. Extractive-related activities involve exploration, development and mining. Processing activities comprise beneficiation, smelting and refining, without omitting other added value activities (Antonio, 2012). Each industry node calls for the intervention of specific professionals, which in the case of oil and gas, Sigam and Garcia (2012) group into three categories: (i) technical jobs; (ii) operational jobs and (iii) support positions, as defined in Table 6.2.

Exploration globally centres on project appraisal. At exploration, one seeks to know (i) if the required resource is economically feasible to develop; and (ii) what the environmental impact of the project could be and what environmental impact strategy to put in place. Economists in general, and environmental economists in particular, (p.181)

Table 6.2: Professionals required in the oil and gas industry

Professional required

Exploration

Production

Transportation

Refining

Distribution

Marketing

Technical job

Geo-scientists

Petroleum engineers

Mechanical engineers

Chemical engineers

Industrial engineers

Analysts and traders

Operational job

Oil drillers and seismic crews

Oilfield workers

Pipeline workers

Plant operators

Terminal operators and truckers

Service station attendants

Support position

Landmen

Petroleum attorneys

Petroleum accountants

Human resources

Information technology

Administrative assistants

Source: Sigam and Garcia (2012)

undertake tasks (i) and (ii) above. Production is technically preceded by the construction of facilities and staff housing, but the required professionals are either engineers or operational workers or staff such as attorneys. Transportation, refining and the marketing of the specific minerals requires technical, operational and support jobs. Overall, careers in the extractive industry are as diverse as engineering, finance, law, design, IT, environmental management, customer support, sales and health and safety.

Of course, extractive industries are believed to be highly capital-intensive and make a limited direct contribution to employment. The World Bank (2013) supports this assertion with some evidence as presented in Table 6.3.

This gives a broad basis for comparison over countries and types of mining worldwide, pulling together examples from Africa, Latin America and Asia. The liquid natural gas project in Papua New Guinea appears as a typical example of extractive industries that is highly capital-intensive, with a limited contribution to employment. In effect, in Papua Guinea, the investment cost of the project exceeded twice the country’s GDP at project start-up, and generated around 9,300 jobs during construction, but it is unlikely to generate more than 1,000 direct jobs in the longer term. Interestingly, however, the gold-mining project in Peru required an investment of only 2.6 per cent of GDP, but it was projected to generate 6,000 jobs during construction and sustain one-third of these jobs in the longer term. Coal mining in Mozambique is expected to increase its employment creation from 150 to 4,500 in the longer term of a decade or so, with an investment requirement of only 13.9 per cent of 2010 GDP. Overall, some extractive activities may have different capacities for generating a notable amount of jobs, even for young people, provided the appropriate policies are put in place to unleash them.

(p.182)

Table 6.3: Jobs creation in the extractive industries

Country

Project (sector or resource)

Investment (% of GDP, 2010)

Direct employment number

Papua New Guinea

LNG Project (liquid natural gas)

237.0

9,300 during construction; 1,000 afterward

Mongolia

Oyu Tolgoi (copper, gold)

74.2

14,800 during construction; 3,000 to 4,000 afterward

Botswana

Jwaneng Cut 8 Project (diamonds)

20.2

1,000

Papua New Guinea

Ramu Mine (nickel)

19.0

5,000 during construction; 2,000 afterward

Mozambique

Benga Mining (coal)

13.6

Currently 150; 4,500 afterward

Tanzania

Mchuchuma (coal)

12.2

5,000

Namibia

Husab Mine (uranium)

11.9

5,200 during construction; 1,200 afterward

Zambia

Lumwana Mine (copper)

9.3

4,700 during construction

Pakistan

Reko Diq Mining (copper, gold)

4.0

2,500 during construction; 200 afterward

Peru

Conga Mine (gold)

2.6

6,000 during construction; 1,700 afterward

Source: The World Bank (2013, p 200).

Sigam and Garcia’s analysis (2012) is noteworthy for highlighting the potential for jobs creation in the extractive industries. They argue that at the local level, large-scale extractive projects can have significant employment effects. However, the net impact depends on how these projects affect employment in pre-existing activities, such as agriculture or small-scale mining. At best, communities can capture a number of benefits depending on their qualification for the available jobs opportunities, or their ability to indirectly participate in the supporting activities of the wider value chain. This point is also advanced by USAID (2008),6 which specifically points to the role that artisanal and small-scale mining could play in local employment, notably in poor countries. Unfortunately, the contribution of artisanal and small-scale mining to the economy is oftentimes difficult to estimate for at least two reasons. First, artisanal and small-scale mining are typically informal activities, and second, in many cases, these activities are performed either in remote locations and are therefore (p.183) difficult to observe, or they are conducted during periods of seasonal agricultural inactivity or under-employment, hence as part-time occupations.

But it is important to appreciate job opportunities in the extractive industries with respect to their specific skill requirements. Some jobs require just a high school diploma – for example, the assay technician who collects samples from the mine, splits, dries, crushes, splits again and pulverises the samples to the consistency of talcum powder. Or the environmental technician who conducts water, soil and air monitoring activities, who enters the industry with a high school degree (see Mining Information Institute, 2013, or visit www.mineralseducationcoalition.org/sites/default/files/uploads/rolesinminingppt6.pdf). Indeed, many more jobs in the extractive industry require college degrees (Mining Information Institute, 2013). This is especially the case for geologists, mineralogists, geophysicists, geophysical engineers and geotechnical engineers. Young men and women in Africa can access some of the available jobs if their skills match the requirements of this labour sub-market.

Catalysing opportunities in the extractive industries into youth employment in Africa: partnerships matter

The specificity of existing jobs in the extractive industries and the associated huge investment gap requires public–private partnership schemes as innovative sources of funding for catalysing job opportunities into youth employment in Africa.

Partnership in skills development for the extractive industries

Job opportunities in the extractive industries are notable, but skills constraints remain tight. For instance, Sigam and Garcia (2012) contend that rising skills shortages have become one of the main problems facing the oil industry throughout the world. Skills shortages leave many producers unable to meet their schedules. Hence, delays in the implementation of projects are increasing, whereas some contracts have to be renegotiated in order to meet the skills constraint. The unfortunate fact is that even job advertisements with promises of high pay are insufficient to secure enough qualified personnel.

The causes of skills shortages, irrespective of the economic sectors in developing countries, are numerous, but five may be considered as critical in the case of Sub-Saharan Africa: (i) scarce educational facilities; (ii) weak vocational and technical training; (iii) lack of school (p.184) accreditation; (iv) increasing demand for higher skilled workers in the industry; and (v) attrition during the search for more productive sectors and/or regions. In short, the skills mismatch extends to various economic sectors in Africa including manufacturing and mining. For example, the African Mineral Skills Initiative (AMSI, 2013) indicates that the Mozambique government requires around 300 staff members with at least an undergraduate-level education just to fill the current vacancies, whereas one of the numerous resource companies such as BHP Billiton or Anadarko Petroleum operating in Mozambique foresee the need for almost 700 professionally trained staff by the end of 2015 (an increase of almost 500 from 2013), and for 9,314 semi-skilled and unskilled mine workers over the same period. In Ghana, however, trained professionals are leaving the country to apply their skills in other West African countries, as well as in Australia, Canada and South Africa, hence creating a significant vacuum in the country for the capacity to replace such professionals. In Guinea, weak local expertise in key areas such as taxation, community relations, contract negotiations and mine administration highly constrains the mining reform process7 that has been launched (Ministère des Mines et de la Géologie, 2011).

Some extractive industries provide on-the-job training, but a given position must be filled before the individual can have access to such training: individuals must first qualify for the available jobs. UNESCO’s report on Education for All (2010) stresses that governments, trade unions and employers must develop effective vocational education to give young people the skills for effectiveness in employment. This calls on mutually reliant interactions among educational systems, institutions and industries – in this case, the extractive sector. In the extractive industries, effective and trustworthy institutions are not only a prerequisite for business, but also for the implementation of local contents8 to support education and skill needs, among others. But educated citizens develop good institutions and skill that bridge the quality of interaction between the educational systems and extractive sectors. Figure 6.6 highlights the envisioned interactions.

The success of technical and vocational education programmes is highly variable, and also depends on conditions outside the education sector. A number of African countries have been relying on technical and vocational training since the 1970s, with the aim of creating a class of young professionals. But on completing training, the scarcity of corresponding job opportunities often lowered the expectations of degree earners to attain work in their field. Rather, (p.185)

Employment creation for youth in Africa: the role of extractive industries

Figure 6.6: Interactions among educational, institutional and economic stakeholders

Source: Adapted from Gao (2010)

they join universities, mostly schools of economics, and management departments in particular, whose degrees allow a number of young people to enter the informal sector and to undertake activities such as petty trade. This has been the case in Francophone African countries such as Cameroon, Côte d’Ivoire and Burkina Faso.

Fortunately, some models have produced good results. As a means of enriching the discussion and reforming skills development schemes, the same UNESCO report proposes (i) reinforcing the links between the education sector and the labour market; (ii) recognising that past achievements are no guarantee of future success, and that governments must adapt and renew vocational programmes in light of changing circumstances; (iii) avoiding the separation of vocational education from general education based on rigid tracking into vocational streams, especially at an early age; (iv) developing a capability-based national qualification systems involving the private sector, that allows training to be used for transferable credits into technical and general education; and (v) integrating vocational programmes into national skills strategies, aligned with the needs of high-growth sectors. In the search for strategies to reduce the skills constraint, we may give a special tribute to model (iv) as a precursor of public–private partnerships in education for labour markets.

(p.186) Coordinating training, work experience and labour market services in the extractive industries: are public–private partnerships in education a viable solution?

In its analysis of the collaboration of the private and public sector in education, The World Bank (2009b, p 15) refers to these schemes as modern public–private partnerships. In such partnerships, governments contract with private providers to deliver a range of inputs and services with the expectation that they will introduce new pedagogical skills and management efficiencies that the public sector lacks, thus generating alternatives to traditional forms of public education. Of the seven forms of public–private partnerships in education analysed by The World Bank, facility availability and education services could be harnessed to solve the skills gap problem in the extractive sector. The considered partnership implies ‘governments contracting the same private firm, not only to build the facility, but also to undertake all of the activities associated with delivering education and related services’ (The World Bank, 2009b). The private sector, in this case, the extractive sector, would engage in the educational system in the area of curriculum design and delivery. The expected results are educational outcomes that best suit the labour market.

The ILO (2012b) compiled some ideal cases for combining training, work experience and labour market services from a number of countries in Sub-Saharan Africa. These fall under either one of two broad views: (i) promote youth entrepreneurship and practical skills training in partnership with employers, based on labour market needs, or (ii) adopt a combination of apprenticeships, internships, work placements and industrial attachments. In regard to the first group of views, the majority Zimbabwean perception is that the government and its partners should commit to financing entrepreneurship, training and skills development for young people using informal and formal channels of training. Zambians were in favour of rehabilitating the infrastructure and upgrading equipment and other training aids in all the vocational training and/or youth resource centres by government, so as to create a favourable training environment and to provide relevant skills to young women and men (ILO, 2012b). Under view (ii), the perception from Madagascar is for a system that encourages employers to recruit young people without experience and from more marginalised groups. These views are shared by people interviewed in South Africa – underpinned by the social compact between the government and the private sector as a way to place young people in internship programmes. Government and the private sector should take part equally in providing such work (p.187) experience places. In Zambia, however, it is believed that a sound model is based on creating incentives for employers to take on young people as interns and apprentices to promote more formal and informal apprenticeships and work-related exposure (ILO, 2012b). As incentives, the government could offer subsidies to employers or establish a youth employment quota system.

Introducing new pedagogical skills and management efficiencies in the African educational system is of the utmost importance to sustain the development of youth employment in the extractive industries for two reasons in particular. First, jobs in this sector are very specific and young people need the appropriate training and skills. The participation of the extractive industries in the design and delivery of training courses should significantly reduce the skills gap in the sector. And second, the boom of the extractive sector makes it a viable niche for solving the problem of youth unemployment on the continent, provided, of course, they have the right skills.

Partnerships between the extractive industries and governments are best spelt out in local contents. Such strategies are essential for overcoming the financial and resource constraints in the education sector, among others. For instance, companies’ local content agreements on training and employment for nationals and their preference for local suppliers could be better aligned with public policies for human capital development, job creation and technology transfer. In Guinea, for example, Article 108 of the Mining Code9 stipulates that ‘Any holder of an exploitation permit or a mining concession shall design during the development phase, and present to the Ministry in charge of Professional Training and to the Mining Administration, a training plan for Guinean managers enabling them to develop the requisite knowledge and skills in order to take management positions in the first five years as from the starting date of commercial production’ (Ministère des Mines et de la Géologie, 2011). In that regard, one would advocate for local contents that allow countries to apply hiring quotas or targets for training local workers. But targeting specialised staff such as mining engineers would work best. These arrangements will be the most effective if policies are complemented with training programmes supported by the extractive industries and intended to ensure the availability of skilled workers.

An example of public–private partnerships in training for the extractive industries is Sierra Leone’s Peace Diamonds Alliance initiative. The government of Sierra Leone, large-scale diamond corporations such as DeBeers and Rapaport, and several international development organisations and non-governmental organisations (p.188) (NGOs) collaborated to create the Peace Diamonds Alliance. This advocates for an integrated and transparent approach to diamond management. Examples of the services it provides are developing competitive buying schemes, training miners to recognise the value of their products, tracking diamonds from earth to export, providing credit to miners, and ensuring that communities benefit from the mining that takes place in their localities. Among other skills, the Alliance trained 209 individuals on valuation techniques, as reported by Wise and Shtylla (2007, p 52).

Sigam (2012, p 11) notes that several resource-rich countries have applied hiring quotas or targets for training local workers in order to increase local staffing in the extractive industries. Sigam further argues that even having had to comply with targets of participation, oil companies in countries such as Nigeria and Angola have encountered difficulties in achieving these targets, especially for the more specialised staff. In effect, this revealed that two conditions are necessary to ensure the effectiveness of schemes of hiring quotas or targets for training of local workers: (i) such policies must be complemented with training programmes supported by the extractive industries, and (ii) the supported training programmes are intended to ensure the availability of skilled workers in accordance with the sector’s changing requirements. As reported by Sigam (2012), support measures to local entrepreneurs and special preferences in terms of participation and training in Trinidad and Tobago were applied for a certain period for local capabilities development, business opportunities and diversification.

In short, an ideal public–private partnership in education for the extractive industries would function such that young people who are inexperienced would be accorded the first opportunity to acquire the necessary exposure and skills needed in the sector. Inexperienced young people are, for example, new graduates in mineral engineering and related technical fields who may not yet have the same practical skills as their counterparts who graduated a few years earlier and who have gained some experience and are gainfully employed. A necessary condition for effective first job opportunities for new graduates is partnerships in education for which industries commit themselves to take new graduates as interns and apprentices to create apprenticeships and work-related exposures that fit the sector’s needs.

Conclusions

Africa must address the urgent need to create jobs for its growing population. Agriculture, household enterprise and services have (p.189) generated the bulk of jobs in Africa, and are expected to lead in the creation of new jobs. The key argument of this chapter is that policies should be put in place to create opportunities in the booming extractive sector for youth employment. Public–private partnerships in education to develop the necessary capacities/skills in young people are perceived as a viable solution, and such partnerships are best spelt out in local contents. Local content strategies provide the framework for negotiating such partnerships between companies and governments. The efficacy of these partnerships relies on the alignment of public economic policies with priorities for industrial development, private sector development, investment promotion and competitiveness. More specifically, we advocate for local contents that allow countries to apply hiring quotas or targets for training local workers. These arrangements will be the most effective if policies are complemented with training programmes supported by the extractive industries and intended to ensure the availability of skilled workers. Another version of partnership that is likely to lead to youth employment is a partnership to allow young people who are inexperienced to be accorded the first opportunity to acquire the necessary experience and skills needed in the sector.

References

Bibliography references:

AfDB (African Development Bank) (2011) Accelerating the AfDB’s response to the youth unemployment crisis in Africa, OSHD/EDRE Working Paper, Tunis: AfDB.

AfDB (2013a) ‘Youth employment in Africa: a brief overview and the AfDB’s response’, AfDB Partnerships Forum 2012, PowerPoint presentation by Stijn Broecke, EDRE2 (Division 2 of the Research Department of the African Development Bank) Amadou B. Diallo, OSHD1 (Division 1 of the Human Development Department of the AfDB).

AfDB (2013b) From fragility to resilience: Managing natural resources in African fragile states, Draft document for review, March.

AfDB, OECD (Organisation for Economic Co-operation and Development), UNDP (United Nations Development Programme) and UNECA (United Nations Economic Commission for Africa) (2012) African Economic Outlook, Issy les Moulineaux, Chapter 6 (http://www.africaneconomicoutlook.org/en/).

AfDB, OECD and UNDP (2014) African economic outlook 2014: Global value chains and Africa’s industrialisation (http://dx.doi.org/10.1787/aeo-2014-en).

(p.190) AMSI (African Mineral Skills Initiative) (2013) Business plan, Addis Ababa: UNECA.

Antonio, M.A. (2012) ‘The Africa Mining Vision: towards shared benefits and economic transformation’, GREAT Insights, vol 1, issue 5, July.

Gao, R. (2010) Education and corporate social responsibility, Social Business/Enterprise and Poverty Certificate, HEC Chair, Paris: HEC (Hautes Ecoles de Commerce).

Global Finance Magazine (2015) ‘US oil prices rise above $60 a barrel’, 5 May (www.gfmag.com/topics/syndicate/34310674-us-oil-pricesrise-above-60-a-barrel).

ILO (International Labour Organization) (2009) The informal economy in Africa: Promoting transition to formality: Challenges and strategies, Geneva: ILO, Employment Sector and Social Protection Sector (www.ilo.org/wcmsp5/groups/public/@ed_emp/@emp_policy/documents/publication/wcms_127814.pdf).

ILO (2012a) Africa’s response to the youth employment crisis: Synthesis of key issues and outcomes from eleven national events on youth employment in the African region, Regional report, CH-1211, Geneva: ILO (www.ilo.org/publns).

ILO (2012b) Youth employment interventions in Africa: A mapping report of the employment and labour sub-cluster of the Regional Coordination Mechanism (RCM) for Africa, Geneva: ILO (www.ilo.org/wcmsp5/groups/public/---africa/documents/publication/wcms_206325.pdf).

ILO (2013) Global employment trends for youth 2013: A generation at risk, Geneva: ILO.

ILO (2014) Global employment trends for youth 2014: Risk of a jobless recovery?, Geneva: ILO.

McKinsey & Company (2012) Africa at work: Job creation and inclusive growth, August (www.mckinsey.com/insights/africa/africa_at_work).

Mining Information Institute (2013) Mining careers (www.mineralsed.ca/i/pdf/MII%20Careers%20in%20Mining.pdf).

Ministère des Mines et de la Géologie (2011) ‘Code minier de la République de Guinée’, République de Guinée (http://itie-guinee.org/codes_miniers/Code_Minier_2011.pdf).

Population Reference Bureau (2012) World population data sheet, Washington, DC (www.prb.org/pdf12/2012-population-datasheet_eng.pdf).

Ramdoo, I. (2012) ‘Treasure hunt: do extractive resources work for development?’, GREAT Insights, vol 1, issue 5, July.

(p.191) Sigam, C. (2012) ‘Human capacity problems in developing countries and local content requirements in the extractive industries’, GREAT Insights, vol 1, issue 5, July.

Sigam, C. and Garcia, L. (2012) Extractive industries: Optimizing value retention in host countries, Geneva: United Nations Conference on Trade and Development.

UNESCO (United Nations Educational, Scientific and Cultural Organization) (2010) Education for All global monitoring report: Reaching the marginalized: A summary, Paris: UNESCO (http://unesdoc.unesco.org/images/0018/001865/186525E.pdf).

UN (United Nations) (2012) World youth report 2012: The UN focal point for youth 2012, New York: UN.

USAID (United States Agency for International Development) (2008) Partnering with extractive industries for the conservation of biodiversity in Africa: A guide for USAID engagement, Biodiversity Assessment and Technical Support Program (BATS), Task Order 02, November (http://pdf.usaid.gov/pdf_docs/Pnadn726.pdf).

Wise, H. and Shtylla, S. (2007) The role of the extractive sector in expanding economic opportunity, Economic Opportunity Series, Corporate Social Responsibility Initiative Report No 18, Cambridge, MA: Kennedy School of Government, Harvard University.

World Bank, The (2009a) Africa development indicators 2008/09, Youth and employment in Africa: The potential, the problem, the promise, Washington, DC: The World Bank.

World Bank, The (2009b) The role and impact of public–private partnerships in education, Washington, DC: International Bank for Reconstruction and Development and The World Bank.

World Bank, The (2011) Africa development indicators 2011, Washington, DC: The World Bank.

World Bank, The (2013) World development report: Jobs, Washington, DC: The World Bank.

World Bank, The, World Bank Institute and AfDB (African Development Bank) (2010) ‘Governance for extractive industries’, PowerPoint presentation, March (www.mmdaproject.org/presentations/GEI%20Update%20March%202010%20external.pdf). (p.192)

Notes:

(1) Extractive industries are taken to comprise mining, quarrying, dredging, oil and gas. Mining refers to the extraction of minerals (bentonite, fine clay, kaolin, lignite, quartz crystals, zeolite, or minerals in alluvial form) and solid fossil fuel (oil shale and coal, including their hydrocarbons). In mining, extraction can take place in either an underground mine or in an above-ground mine, known as a surface mine, ‘open-cast mine’, ‘open-pit’ or just ‘pit’. Quarrying defines the extraction of aggregates and industrial minerals above ground. The extraction of marine aggregate underwater is known as dredging, while that of liquid fossil fuel is oil extraction, and that of gas deals with the extraction of gaseous fossil fuel.

(2) See Population Reference Bureau (2012) and UN (2012). This figure has not significantly changed in 2015 given the drags that characterise labour markets.

(3) At the July 2006 summit in Banjul, the Gambia. The initiative basically supported the establishment of national and regional youth networks, including the Pan African Youth Union (PYU), with the aim of channelling youth engagement and promoting youth perspectives to be incorporated into national, regional and continental policies, strategies and programmes (ILO, 2012b).

(4) During the last Executive Council meeting held in Addis Ababa, Ethiopia, in July 2014.

(5) Defined earlier.

(6) ‘Artisanal mining is practiced by individuals, groups, families, or cooperatives, using simple, un-mechanized tools and equipment, and usually occurring outside the legal and regulatory framework. Most African artisanal miners excavate gold because it is easy to extract, refine, and transport. In Ghana, gold accounts for two thirds of total artisan and small-scale production, however, artisanal miners also produce about 65 per cent of Ghana’s diamond production’ (USAID, 2008, p 31).

(p.399) (7) This led to the adoption of a new mining code in September 2011 (Ministère des Mines et de la Géologie, 2011).

(8) Local content is the development of local skills, using local manpower and local manufacturing. Local content requirements in renewable energy policy serve as either a precondition to receive government support or an eligibility requirement for government procurement in renewable energy projects.

(9) The new mining code that was adopted in September 2011 gave Guinea the opportunity to break from the past by making the mining sector accountable to the Guinean people. Ensuring the successful transfer of benefits to Guinean people is, however, the responsibility of the government in applying the code and in maintaining an open environment with its citizens, creating an attractive environment for investors.