Better to Create Jobs than Offer Them

December 10 , 2018 . By Christian Tesfaye

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The City Administration of Addis Abeba will open over 161,000 jobs opportunities to citizens in this fiscal year. But perhaps “open” may be the wrong term here, as it literally offered the jobs away.

Federal ministries will hire seven percent of that number, while youth in small and medium-sized enterprises will get contracts for dry waste management, green landscape and housing and road construction projects.

This is not too dissimilar from the city administration giving preferential treatment to unemployed youth. It is also not that far off from regional and city governments awarding various projects whose contracts have been terminated, for a myriad of reasons, to youth associations.

This is not a bad thing, but it begs the question, how long can city and regional governments continue - what essentially is - hiring youth to alleviate joblessness?

It will not be too long. Such initiatives will indeed help stimulate the economy, but it will not sustain economic productivity. Given how the authorities are expected to evaluate projects, youth associations or small businesses engaged in government contracts cannot be allowed too much flexibility. Non-performance or underperformance comes at the expense of taxpayers’ money.

No doubt, this would allow the youth an opportunity to gain experience and one day get promoted. But this is not the problem, per se.

The issue is where will they get promoted to? Worse still, what should happen when, as is the case today, new labour force entrants are more numerous than the volume of job opportunities that could be offered?

Of the things that Ethiopia has an abundance of, it is the youth. They are politically engaged, vibrant and ready to learn. They are also in need of jobs that pay salaries that can, if not allow an annual vacation overseas, be able to cover food, housing and transportation costs.

There is a reason to be ever worried about the youth, since agriculture’s share of employment will continue to shrink.

Agriculture does not have either the financial or socio-cultural weight to stir the youth to join its industry. Most farmers in Ethiopia are still engaged in subsistence farming, thus making a profession in agriculture less than attractive. This is not to mention, despite its importance, the negative cultural image that has been built of it over the decades.

But even if these do not serve as sufficient push factors, population growth leading to less and less land being parcelled out between family members, will be a major blow. It is leaving many without a choice but to turn to industry or join the urban hubbub and look for an employment opportunity in the service sector.

Those growing population numbers and shrinking farm sizes - and this is without factoring in the ominous prediction about the effects of global warming - mean that a lot of job opportunities need to be opened in the service and industry sectors. Otherwise, the thriving red-light districts, the protesting youth, the homeless children and small-scale crimes of today will only be a prelude to a much larger crisis in store for the country in the future.

The regional and city government should continue to support youth by engaging them in projects they can undertake. But this alone will not address joblessness.

The fundamental problem in Ethiopia is a lack of productivity in the private sector. This is not a matter of a lack of foreign currency; that is only the symptom. It has to do with government policies that have curtailed the flexible movement or utilisation of resources, such as land or foreign currency, necessary for wealth creation.

Add to this the antagonistic relationship between businesses and the government, where the policies in place are enacted with the objective of regulating instead of providing an enabling environment. The bureaucracy is also unprofessional and the main service subsectors are under the monopoly of state enterprises.

Unless these change, the investments in infrastructure will not pay off, the government will continue to shoulder the burden of directly giving away jobs and citizens will be discontented.

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PUBLISHED ON Dec 10,2018 [ VOL 19 , NO 972]

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