Five barriers to stable job creation in Africa

4. The business environment

Some respondents identified obstacles related to the environment in which their companies are operating. “Sixteen per cent of employers cited factors such as a lack of training and the dissemination of key business information to owners. It is notable that 15% said they could not find any growth opportunities for their business. Arguably, this largely reflects difficult macroeconomic conditions. However, there also appears to be an element of business owners lacking the training and experience necessary to see ways to differentiate the company’s product, enter new markets, and offer customers a clear value proposition,” says McKinsey.

Businesses are also being held back by complicated regulations and bureaucracy, as well as corruption.

5. Lack of practical skills and work readiness

Surprisingly, only 12% of African employers surveyed cited insufficient skills or education of employees as one of their top three constraints on growth.

According to McKinsey, 33% of Africa’s population today has some secondary education, compared to 27% in 2000. By 2020, this figure is expected to reach 40%. The share of the population with a tertiary education is, however, expected to only increase from 7% today to 8% in 2020.

Employers also identified key gaps such as a lack of work experience, soft skills like time management and communication, and basic business literacy and organisational skills.

In addition, regulatory constraints on the importation of talent in many countries are preventing companies from filling critical skills gaps, keeping them from growing or creating low-skilled supporting jobs.

Some business owners and executives noted that a barrier to hiring is the high salaries demanded by good candidates. “We interpret this as evidence that there is insufficient supply of such candidates, and that the margins and growth prospects of the smallest businesses are not high enough to justify hiring the most qualified – but costly – talent,” says McKinsey.