70% of Africa’s population is under the age of 25 shaping one of the largest untapped talent pools in the world.  At the same time, 75% of all university graduates in Kenya and Nigeria are likely to be unemployed for up to 5 years after graduation. What are the drivers behind these figures and why Africa is so polarized when it comes to skills development and unemployment rates?

A closer look at the African countries with the lowest and highest unemployment rates reveals interesting trends. Those countries relying on agriculture or oil production tend to have high unemployment rates and wide skills gaps. Re-skilling and up-skilling a population that has been focused on agriculture for generations is a very slow process. Reaching out to new markets and opportunities requires skills, experience, and networks that are usually developed by those who have studied abroad. Most young people can’t afford to study abroad without government subsidies or scholarships. It is not surprising that the countries with low unemployment rates have adopted programs encouraging continuous education, industry diversification, and skills development.

Statistical data generated by the CSR recruitment platform Transformify sheds light on the distinct skill sets of the people living in numerous African countries.  Kenya and Nigeria are of a particular interest for the employers in the UK due to the high percentage of English speakers who have received bachelor’s degree or higher. Post Brexit, many companies in the UK consider distributed teams overseas as an alternative to the shrinking talent pool and high recruitment costs in Britain.

Kenya: Youth Fund Targets Young People in Business Start-Up Loans Plan

Facing a high unemployment rate among graduates, Kenya encourages entrepreneurship in an effort to create more jobs in the technology sector. Nairobi, the capital of Nigeria, is often pointed out as the birth place of the so-called Silicon Savanah which gave the rise to the Africa’s tech scene between 2007 and 2010.

Commenced in July 2017, The Youth Enterprise Development Fund provides start-up loans to help young entrepreneurs fund their businesses at a very early stage. According to the fund chairman, Ronnie Osumba, the start-up market is yet to be explored. It is expected that the Youth Fund will cap loan charges at 6%, the empowering of youth trough access to funding is important, but is it enough for them to be successful? Do they possess the skills, experience, and know – how for their businesses to be successful?

The ‘’must have ingredients’’ of a strong start-up team are tech, product/project management, marketing, sales, and business/finance competences.

Transformify has ranked the skills possessed by young people from Kenya who have joined the CSR recruitment platform in the last 18 months. All participants have received bachelor’s degree or higher. Java EE, Java SE, PHP, and Javascript are the most common programming languages. 20 % of the project managers are familiar with Scrum, but there are very few product managers – less than 1% of all. About 2% of the participants have SEO and Google Analytics skills, about 3% have stated that they possess digital marketing skills. More than 40 % have writing, editing, and copywriting skills. 

What would a startup team look like based on this data only?

Well, there will be 2 copywriters, 1 editor, 1 blogger, 3 programmers, 1 Project/Product Manager, 1 Business/ Finance, 1 Sales/ Marketing expert.

Of course, the hiring needs vary a lot and are dependent on the business model, but a skills gap analysis reveals that more product managers, programmers, and sales and marketing experts will be needed in the near future.

What are the most common skills in each category?

Silicon Lagoon: Nigeria is leading the way

Lagos, a Nigerian port city, is the home of more than 60 startups focused on solving social problems. Andela, one of the first investments of the Chan – Zuckerberg Initiative, is also based in Nigeria. Technology is changing how Nigerians live and do business, quite often in a remarkable way. The Chan Zuckerberg Initiative’s funding for Andela was its first lead investment, and Zuckerberg has hailed the company as a key means of addressing Africa’s “gap between talent and opportunity.” Speaking about gaps, let’s look closer at the skills gap. According to the data gather by Transformify, 35% of the participants possess technical skills, 5 % Product/ Project Management Skills, 15 % Business / Finance Skills, 40% Sales & Marketing / Writing skills, 5% Other. 

What would a startup team look like based on this data only?

There will be 3 programmers and 1 QA, 1 copywriter and 1 Blogger/Editor, 1 Product/Project Manager, 1 Business / Finance, 1 Marketing and 1 Sales expert.

What are the most common skills in each category?

Despite of the vibrant startup culture and the number of graduates who have received a bachelor’s degree or higher, Kenya and Nigeria are not among the countries that have achieved a low unemployment rate. So, what are the African countries with low employment rates doing differently?

10 African Countries with the Lowest Unemployment Rates

Benin

With an unemployment rate of just 2.4% in 2013, Benin is among the countries that have made significant progress in the recent years. Benin Smart City is the first ever digital city and expected to create 50 000 new jobs.

Seychelles

In 2014, the unemployment rate was just 2.7% thanks to the well-developed tourism industry. New regulations have been adopted in 2014 to safeguard and create more jobs for its citizens. To diversify its economy and provide more jobs for the youth, in 2014 the country adopted the 2016-2020 Country Strategy Paper.

Rwanda

With a population of 11.4 million and unemployment rate of just 3.4%, Rwanda is close to the top of the list. However, 60% of the work force has more than one job and these are primarily farm occupations. Rwanda is an agricultural country and a lot more is to be done to develop the skills needed to diversify the economy. It is remarkable that the inclusion of women is high and more women are employed than men.

Ghana

Just like its neighbours, Ghana is a predominantly agricultural country dependant on the cocoa production. However, to diversify its workforce and economy, in 2015 the country adopted TizaaWorks. The platform aims to help the youth to develop relevant skills and improve their chances of getting hired. Microsoft and International Institute of Communication and Development contributed to the development of the platform. It is not a surprise that the unemployment rate is 5.20%.

Mauritius

Similar to the Seychelles, Mauritius is a tourism nation. To diversify the economy, the government put an emphasis on the services and sugarcane industries. Technology is not overlooked too, as the Mauritius Board of Investment intends to create 10 000 jobs in the telecommunications and information technologies sectors by 2019. Still, the unemployment rate is 7.8%, times higher than that of the Seychelles.

Algeria

With an unemployment rate of 11.20%, Algeria faces many challenges with regard to the creation of jobs. To address the internal migration trends, in 2013 the government adopted ‘’Marshall Plan’’. The plan forces the companies to hire locally and create jobs for the local communities. Soon after the adoption of the ‘’Marshall Plan’’ it became clear that the workforce locally does not necessarily possess the skills the business needs. A skills gap analysis and detailed skill development plan are much needed to address the widening skills gap.

Egypt

Egypt is highly dependent on oil production and the economy is very sensitive to the oil price fluctuations. With an employment rate of 12.77 %, and considered to be politically unstable, the country is not attractive for the foreign investors. In 2012, the government rolled out projects aiming to create 750 000 jobs and to address the youth unemployment. However, no emphasis has been put on skill development training programs and continuous education.

Zambia

Zambia’s government has recognised the need of skills development training and opportunities for the university graduates. Providing youth with capital and opportunities is at the center of the Youth Skills Enterprise Initiative. Still, the unemployment rate is 14.1% and 9.2 million people live in poverty.

Tunisia

A tourism-oriented country in the past, now Tunisia focuses on education, skills development, and technology. Individuals interested in founding startups are funded by the Tunisian Solidarity Bank and the university graduates benefit from the Green Jobs Platform funded by Middle East and North Africa Transition Fund through the Islamic Development Bank. The unemployment rate is currently 15.4%.

Botswana

Considered to be among the fast-growing economies in the world, Botswana adopted several initiatives to address unemployment and skills development. The unemployment rate is still high – 18%.

Lilia Stoyanov is the CEO of Transformify, a CSR recruitment platform backed by Virgin, ranking in Startups 100 Index, and a member of the Digital Coalition of the European Commission.