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Delivering on Africa's promise by filling the skills gap

Charlotte Lau - May 17, 2013

Skilled Labour Gap

The 23rd World Economic Forum on Africa convened last week at the Cape Town convention center, under the theme "Delivering on Africa's Promise." It was a platform for regional and global leaders from business, government, and civil society to discuss a sustainable and inclusive pathway to growth and development, by 1) accelerating economic diversification, 2) boosting strategic infrastructure, and 3) unlocking Africa's talent.

In relation to the first and third goals, the Rockefeller Center then announced a $100 million commitment to the Digital Jobs Africa Initiative, which will train high potential youth who lack access to jobs and economic opportunities. The initiative takes advantage of the "youth bulge" in the continent, whose population is set to double in the next generation.

The global skills gap

The announcement comes off the back of a recent McKinsey report showing the growing demand--and shortage--of highly skilled youths:

  • 39% of employers report that inadequate skills are a leading reason for entry-level job vacancies
  • By 2020, globally there will be an inadequate supply of 150 million highly skilled workers, for a demand of 166-168 million workers (~10% shortage).
  • Currently,  in South Africa, where youth employment is 36%, there are also over 800,000 unfilled job vacancies for skilled workers.
The McKinsey report explains:
“Worldwide, young people are three times more likely than their parents to be out of work. In Greece, Spain, and South Africa, more than half of young people are unemployed, and jobless levels of 25 per cent or more are common in Europe, the Middle East, and Northern Africa. In the organisation for Economic Co-operation and Development (OECD) countries, more than one in eight of all 15- to 24-year-olds are not in employment, education, or training (NEET).”
We must come together at various education levels to improve employability and workforce skills. Rockefeller and other foundations are supporting vocational training.

Investing in global business leadership

Meanwhile, at Prodigy Finance, we are supporting leadership training via top MBAs, about 2/3 of whom return home to emerging/developing markets, providing value to the local job market or even founding new companies that create local jobs. There are already at least 7 startups from Prodigy alumni, since we started issuing loans in 2007 (see some Prodigy entrepreneur profiles here). And Prodigy Finance itself is an example of this trend: our South African founders have established a growing business development office in Cape Town, hiring many locals in an economy that faces high unemployment.

All in all, we were optimistic (and proud!) to see WEF here in Cape Town. There is indeed much to cheer about: Subsaharan Africa is expected to grow 5% in 2012-2013. Nearly half of African countries have attained middle-income status. Financial markets in Nigeria and Kenya have risen by over 50% in the past year. #Emergingafrica indeed.

We must just remember that the economic transformation is still nascent. Good education, combined with private and public sector leadership, will "deliver Africa's promise."

mckinsey skills shortage according to employers worldwide

Note: All graphs are from BusinessInsider coverage on the war for talent and the education skills gap.

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