Africa: The Business Perspective to Addressing Africa's Skills Gap

ANALYSIS

By Emma Green

The phrase "Africa is rising" has been used over the past decade to describe the continent's economic trajectory. The steady growth in foreign direct investment (FDI) across the continent indicates that businesses and investors around the world see real opportunity to generate profits. However,

leading CEOs and business executives agree there is much more involved in uplifting a continent for the long term.

Lack of a skilled workforce

The real indicators of Africa rising must be reflected in its people by the development of the continent's workforce. The reality is that while great strides are being made in many areas, Africa greatly lacks a pipeline of local talent that can be employed in the ever-increasing number of businesses staking ground across the continent.

With 65% of Africa's total population under the age of 35, the most valuable resource throughout Africa may be its youth population. Over the past 20 years, Africa has accounted for 20% of the globe's working-age population growth, and if current trends continue, McKinsey Global Institute predicts Africa will have the largest working-age population in the world, surpassing China and India. This large group of workers is a blessing if properly leveraged and a curse if not. And while the African workforce is becoming better educated, much is still to be done to ensure the skills needed by businesses operating in Africa meet the demand.

Opportunities for business collaboration

At IGD, we surveyed our member CEOs and senior executives operating in Africa to determine the biggest obstacles for expanding operations in Africa. Overwhelmingly, all who were surveyed cited a lack of skills in workforces around the continent as the biggest challenge in creating sustainable business operations. Through the launch of IGD's Leadership, Employability, and Skills Program, we have identified solutions for companies to mitigate the skills gap and foster an environment where the number of talented, educated workers can keep pace with the working-age population growth on the continent.

Through our discussions with business leaders, we find that local education institutions frequently do not prepare students adequately for the workplace. Many companies believe education providers have a significant role to play in ensuring that necessary soft skills, including decision-making, problem solving, and job readiness, are taught to students. While education providers should be thinking about how to best position students for fruitful careers, businesses have the opportunity to take the lead in creating partnerships with education providers to address this challenge.

Embarking in collaborative partnerships with education providers would allow business to reduce the risk and cost of investing in workforce training. Additionally, tackling Africa's skills gap requires a collective effort where multiple stakeholders are equally invested, sharing both the challenge and the rewards. As with any partnership, however, the foundation must be built upon open communication.

The lack of communication that exists between employers and educational institutions can be easily overcome by a collective effort on both sides. Furthermore, educators, government, and businesses all have a role to play in creating cross-sector partnerships to address the skills shortage. Enhancing communication between all sides and sharing best practices will help foster action and ensure efforts aren't wasted.

Actionable Solutions for Business Value

Initiative for Global Development (Washington, DC)