Unlike developing countries such as Asia, African countries do not rely on export-led manufacturing to drive structural transformation, but instead focus on service-oriented sectors. While many services are less productive and less professional, some sub-sectors may, according to recent research by Brookings Africa Initiative TV, be the catalyst for economic growth and job creation in a dynamic global marketplace. Known as IWOSS, these sectors have the potential to add significant value to a worker’s productivity in terms of productive economy, demonstrate potential for technological change and productivity growth, show some measurement or aggregation economies, and attract low-skilled workers. they are. These sectors include agro-processing and horticulture, tourism, information and communication technologies (ICT), transit trade and finance and business services.
IWOSS has conducted a number of case studies, including in South Africa and Uganda, to explore the potential and limitations of IWOSS to encourage inclusive growth, economic transition, and job creation for employees of various skill levels.
Major trends in South Africa
South Africa’s youth are particularly affected by unemployment: the country’s youth unemployment rate is 56 percent, which is much higher than in sub-Saharan Africa.
South Africa’s economy is moving in the same direction as other countries in the project, just as IWOSS has 66.7 percent (8.8 million) of private sector jobs in South Africa in 2018, according to the South Africa Case Study. IWOSS, however, unlike other case studies, that shift did not take place in the IWOSS sub-sectors In particular He is ready to accept low-skilled labor. In fact, the authors recognize that finance and community, social and private (CCP) services – the least skilled labor-intensive sectors – have seen tremendous growth. Even more so in the financial sector. In 1980, it accounted for 13.4 percent of the country’s gross domestic product. In 2018, it grew to 22.4 percent. 1980 to 2018 (Figure 1). As a result, the DPRU findings of the group that IWOSS has the potential to attract manpower as a whole have been destroyed, but tourism and horticulture are particularly high. Low capacity If certain restrictions are met, they are ready for labor and greater growth. (See full case study for more details.)
Figure 1. Contributions to GDP in South Africa, 1980 and 2018 (percent)
Source: Allen, C, Asmal, Z, Burat, H., Hill, R, Monaco, J, Ouzuzen, M and Rooney, C Job Creation Skills Requirements, and Skills Gaps for Youth – South Africa Case Study. (Washington, DC, Brookings Institution, 2021).
Major trends in Uganda
Uganda’s population growth rate remains high, creating unemployment or unemployment among 600,000 young people entering the labor market each year. Unemployment is a problem because most young people are involved in informal services such as grocery shopping and cannot find high-paying jobs in the formal sector.
The Center for Economic Policy Research (EPC) in Uganda has seen similar trends in South Africa as the DPRU, but also mentioned that Different Sub-sectors in East Africa are contributing to its growth. In other words, like South Africa, the popularity of IWOSS has grown in recent years, especially in terms of production, but the fastest growing sub-sectors are agro-processing and tourism (Figure 2). Tourism in particular has contributed significantly to Uganda’s economic growth, accounting for 7.7 percent of the country’s gross domestic product by 2019.
Figure 2. Uganda Tourism Performance: 2000-2017
Source: Guloba, M., Kakuru, M. Job Creation Skills Requirements, and Skills Gaps for Youth – Uganda Case Study. (Washington, DC, Brookings Institution, 2021).
Recommendations to release IWOSS potential in South Africa and Uganda
In particular, such growth in both countries is not yet strong enough to produce the required number of jobs and types of jobs there: They become unemployed. Some of the suggestions from the authors include investing in infrastructure, especially engineering and urban planning, and providing the necessary support for post-secondary education and parenting programs to develop the sector-specific skills.
Like South Africa, Uganda, horticulture, agro-processing and tourism have the potential to create much-needed jobs, and case study authors recognize that unusual and distorted trade policies have hampered the growth of these sectors. E.E.C.P. Improves the need for improved digital and problem-solving skills as well as improved investment in road infrastructure to improve transportation and communications. They recommend that the government create policies that encourage the adoption and adoption of technologies that reduce the waiting time on customs and licensing applications to better support fruit and vegetable processing.
For more information on the South African case study, please see the full report, Covide Update and Summary Blog. For Uganda, please see the full report, covide update and summary blog.