Leveraging the African Diaspora as Human Capital Investment across Africa

Intro

Today, Africa is home to the youngest population globally by continent with a median age of 19.4 years (Desjardins, 2019). Of the approximately 420 million African youth aged 15-35, ​one-third are without jobs. This issue is exasperated by the 10 to 12 million youth entering the workforce each year, where only 3.1 million job posts are being created (African Development Bank Jobs for Youth in Africa Strategy Report, 2016). This growing bubble requires immediate attention to avoid crises for the generation to follow.

As late as last year, the majority of solutions devised towards this have been inward looking. However, with countries such as Ghana hosting ‘The Year of the Return’ in 2018, perhaps it is time for African governments to reach out to its untapped counterparts – the diaspora.

Leveraging the diaspora could be key to supporting the structural transformation of African economies, upskilling youth to warrant job consideration and supporting entrepreneurship to create jobs for youth.


Where’s the solution?


Local entrepreneurship presents itself as a viable case to support job creation and training.

In a study, the World Bank found that there are some 45 million Micro, Small and Medium Enterprises (MSMEs) across Sub-Saharan Africa. In 2015, SMEs generated an average of 80% of jobs in the Sub Saharan African region (Ndiaye, 2017). These businesses account for almost 90% of businesses in both leading and developing economies through job creation, employment, tax provision and contribution to GDP (Muriithi, 2017).

This displays how entrepreneurship is already at the pinnacle of the day-to-day lives of Africans, what may be left for governments to do is support scale. This finding was hoisted by the African Development Bank Group launching its Jobs for Youth in Africa Strategy (2016-2025) in 2016. The initiative supports African countries in creating opportunities in education and training, transformative jobs and building a business environment conducive to entrepreneurial activities.

By honing in on entrepreneurship, Africa could theoretically shift itself from embodying the economic model of the ‘Trickle Down’ to focusing on the ‘Multiplier Effect’ as shown below (Pettinger, 2017):

Figure 1: Trickle Down Effect




In action, the Trickle down theory renders populations somewhat inactive by awaiting an increase in GDP and government subsidies, which is not translating. Based on a survey conducted by Afrobarometer, poverty levels have barely improved in the past decade despite an average five percent growth in gross domestic product in the same period (Khumalo, 2013). This finding is highlighted by the President of the African Development Bank, Prof. Akinwumi Adesina at Davos 2018 where he stated “…people do not eat GDP.” (CNBC Africa, 2018).

Enabling entrepreneurship facilitates a multiplier effect of increased income for entrepreneurs, scaled enterprises, more jobs and ultimately increased income across local communities. This provides the African diaspora with a potential important opportunity to play in supporting Africa in building entrepreneurs from the ground up.


How could the Diaspora feature?


The African diaspora represent circa 15 million across Europe alone, a strong proportion of which working professionals (ICD, ). African governments could look to emulate countries such as Ghana and The DRC by looking to develop diaspora-focused programmes. An example of which is the Chambre Commerce Swiss-Congo (CCSC), a government function supporting the Congolese diaspora in establishing trade relations. However, this concept could be extended to not only facilitate investment but enable skills-sharing across industries of focus between first-time entrepreneurs and those with sector experience in the diaspora.

Based on the African diaspora’s inclination to have contact with their homeland, this could act as a great trade-off for both parties. This would act as a ‘lease of diaspora support’ to upskill entrepreneurs and deploy training as an additional supplement to direct human capital investment in the population.

In February of this year McKinsey published a report titled ‘Winning in Africa’s agricultural market,’ the piece stated that Africa could be two to three times more productive if it intensified its agricultural productivity (Goedde, Ooko-Ombaka and Pais, 2019). Figure below taken with data from 2014 displays the difference between current and potential in millions of hectares:

Figure 2: Cereal and coarse-grain production potential, Africa, millions of tons

One of the causes of this disparity is supply chains for agriculture in sub-Saharan Africa are fragmented, moving from national importers to regional distributors to “agro-dealers” (which are typically small, rural shops) caused change of hands at least three times. This fragmented supply chain led to a 20 to 50 percent mark-up over import price across major agricultural inputs. Supporting entrepreneurs in identifying avenues for improved service to agro-dealers is an example of where expertise could be leveraged for impact.

The African Union is taking steps towards embedding the diaspora across African affairs predominantly from an advocacy perspective, through their Diaspora Division. Nonetheless, whilst entrepreneurship and training frameworks remain infantile, direct contact with micro-enterprises through measurable programs which target prominent sectors, address knowledge gaps and integrate youth entrepreneurship networks should be prioritised. Partnering with professional African diaspora networks which show a wide representation of sectors useful to countries could be tapped into by African governments to bring this position into fruition.


Conclusion

The conundrum of youth unemployment in Africa is a great juxta-position when considering the wider context of the continent. Economically, Africa is growing but youth unemployment seems to be trending upwards with it. In 2018, the fiction movie studio Marvel released the film Black Panther which was set in the African wonderland ‘Wakanda.’ The sacred land is home to a globally sought commodity called ‘vibranium,’ which cannot be found anywhere else globally. Perhaps it is exactly that the African continent’s youth dividend is ‘Africa’s true vibranium,’ which requires mining and polishing through innovative approaches to education, training and job creation.

The significance of Africa’s youth unemployment difficulties is made even more acute by the estimation that by 2035 the continent is estimated to possess the world’s largest workforce at 1.1 billion (Future Agenda, 2019).

In essence, the world will see a global shift in dependency on labour as Africa will produce the largest and youngest collection of workers in the next two decades – who may lack adequate access to jobs and training. Should these projections prevail under current market conditions, the risk of cross-border migration heightens as young persons go in search of work.

The stage is projected to be set for Africa to be at the forefront of global affairs, therefore, this issue ought to be on the agendas of not just African governments but international forums. Whilst The Diaspora itself is not the metaphoric silver bullet to youth unemployment in Africa, employing the established skillsets of professionals on a pro-bono basis could be a feasible short-to-medium term bridging solution for certain countries.


Reference List

http://www.culturaldiplomacy.org/index.php?en_programs_diaspora_eu

https://www.mckinsey.com/industries/agriculture/our-insights/winning-in-africas-agricultural-market

https://www.economicshelp.org/blog/174/economics/trickle-down-economics/

https://mastercardfdn.org/africas-true-vibranium/

http://en.rfi.fr/france/20190925-macron-says-cannot-successfully-host-all-migrants-tighter-laws-immigration-far-right

https://idjournal.co.uk/2017/05/20/africa-needs-smes/

https://www.researchgate.net/publication/315516536_AFRICAN_SMALL_AND_MEDIUM_ENTERPRISES_SMES_CONTRIBUTIONS_CHALLENGES_AND_SOLUTIONS

https://www.weforum.org/agenda/2019/02/mapped-the-median-age-of-the-population-on-every-continent/

https://www.bbc.co.uk/news/uk-wales-49797720

https://mg.co.za/article/2019-07-30-unemployment-rate-at-29-statssa

https://www.futureagenda.org/foresights/africa-growth/

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