High unemployment undermining economic growth

Africa is suffering from record levels of unemployment that are undermining economic growth and deepening poverty across the world's poorest continent, according to a new United Nations report released on Monday.

"Meeting the Challenges of Unemployment and Poverty in Africa", released by the UN Economic Commission for Africa (ECA) in the Ethiopian capital of Addis Ababa, said that despite record economic growth of 5.2 percent in 2005, Africans are worse off due to a lack of jobs and higher rates of poverty than ever before.

Augustin Fosu, the director of the economic and social policy division of the ECA, said poverty had been unresponsive to economic growth on the continent.

"Job creation lies at the heart of the poverty battle," he said.

Africa has a high unemployment level; more than one in 10 Africans who are able to work are jobless, according to the report.

In sub-Saharan African alone, some 29.4 million people are without work. Among youths the situation is even worse, with more than one in five unemployed. The report noted that many young Africans emigrate to the West in search of improved job opportunities.

More than 350 million Africans live below the US $1-a-day international poverty threshold. Most Africans, according to UN statistics, live on only $0.65 a day. Fosu said growth rates of 5.2 percent were still not enough to curb growing poverty, or to help the continent achieve the UN’s millennium development goals.

"There is no way we can meet Millennium Development Goal One to halve poverty unless we can do something about the unemployment situation in Africa," Fosu said.

The report noted that most people in Africa were employed in sectors such as agriculture, which provided only temporary, seasonal employment and rarely led to income security. Poor people lacked the capacity to meaningfully participate in the economy, either as producers of goods and services or as labourers.

"As long as people are kept from participating in the economy as productive agents, people will continue to benefit only sparsely to whatever growth is actually achieved," he said.

The report showed that Africa’s external debt had dropped from $293 billion to $285.8 billion and was expected to fall even further, after pledges from world leaders at the G8 summit earlier this year. Growth rates for 2006 are estimated at around 5.3 percent.

For a significant reduction in poverty, growth rates need to climb to an average of more than 7 percent a year and continue over time. "Sustained growth," Fosu said, "is precisely what is necessary in order to increase employment and reduce poverty."

The ECA recommended that African governments boost rural labour, address widespread youth unemployment, prioritise broad-based job creation and tap the global market to create decent jobs. It further suggested that lawmakers relax barriers that hamper the growth of the private sector.

"Only a few countries in Africa have sustained growth over the years, though many have reformed and are on the right track," Fosu said.

The full report is available at: www.uneca.org