New pathways to job creation and development in Africa

Type Book Section - In search of an employment escape to a growth path
Title New pathways to job creation and development in Africa
Author(s)
Publication (Day/Month/Year) 2025
Page numbers 385-431
Publisher Brookings Institution Press
City Washington DC
Country/State US
URL https://www.brookings.edu/wp-content/uploads/2025/05/New-Pathways-to-Job-Creation-and-Development-in​-Africa.pdf
Abstract
South Africa has been in a long-run, low-growth trap since the onset of democratic rule in 1994. Between 1994 and 2008, real gross domestic product (GDP) per capita growth was between 1 and 3 percent, with a sharp decline in 2009. Since 2010, real GDP per capita growth has been below 2 percent, with the rate of growth turning negative in 2014. The impact of this poor economic growth on the labour market has been significant: In 2018, 16.4 million individuals were employed in the South African economy, with 6.1 million unemployed, rendering the national unemployment rate 27.1 percent. If we include discouraged work seekers - defined as those who want to work but are not actively seeking employment - then a further 2.8 million unemployed are added, resulting in an expanded unemployment rate of 35 percent. This situation is particularly dire for youth age 15 to 24 years: The narrow and expanded unemployment rates for youth are substantially higher than those of the overall population, at 53.4 percent and 64 percent, respectively. This chapter first examines the sectoral patterns of economic growth in South Africa. This is followed by a comparative assessment of industries without smokestacks (IWSS) and the non-IWSS sectors. We then identify constraints on growth in four specific IWSS sectors and provide a quantitative analysis of future employment growth between 2019 and 2028. This quantitative analysis is supplemented by a firm survey, which we use to better understand the skill requirements of firms in these sectors. Based on our findings, we concluded the chapter by discussing a number of policy implications.

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