The number of youth not in education, employment, or training (NEET) has surged to a staggering 62 million people across Sub-Saharan Africa, according to a recent report released by the International Labor Organisation (ILO). The implications of this alarming trend are particularly troubling for countries like Ethiopia, where declining real wages and a significant youth population are a reality.

The global labour market wrestling with a high inflation rate while the unemployment rate is projected to increase by 2.2 million people in 2024, exacerbating the precarious economy. With a third of the employed labour force in Sub-Saharan countries living in extreme poverty, the sharpest of pangs felt by low-income countries registering double-digit inflation rates.

According to the “World Employment and Social Outlook: Trends 2024” report released last week, only China, the Russian Federation and Mexico from the G20 enjoyed positive real wage growth. The number of workers living in extreme poverty – earning less than 2.15 dollars a day per person in purchasing power parity (PPP) terms grew by about one million worldwide.

For Ethiopia, a country where the extreme working poverty rate was estimated at 18.3pc in 2022, and the informality rate has hovered around 86pc, labour market imbalances are highly pronounced.

The ILO Director General, Gilbert F. Houngbo, remarked during the report's launch that the global challenge of 435 million people actively seeking employment in the year but unable to find it.

According to Gilbert, informal economy employment was returning to its pre-pandemic levels, which heralded significant opportunities with around two billion people engaged in various sectors. However, he raised concerns over the quality of the jobs with the inevitable existence of an informal economy in most places across the world.

He said contractual agreements are crucial to avoid abuses, underscoring the high exposure to infringement of worker rights as necessarily requiring some form of intervention.

"Facts are facts," he said.

One of the significant concerns raised is the growing youth unemployment crisis, particularly in Africa, where the rate is three times that of the adult population.

The decline in real wages is a worrying trend as most countries try to tame high inflation rates with economic growth expected to decelerate in the coming year. Coupled with the likelihood of increasing population pressure, "it's a worrisome development," said Richard Samans, research director at ILO.

A UNESCO estimate predating the entry of 1.7 million students who failed to enter universities, indicated that primary school completion rates in Ethiopia were 6.5pc below the Sub-Saharan average, while upper secondary completion rates were nearly half of the regional average at 13.6pc. This sets the stage for a looming education crisis that contributes to the growing ranks of NEET youth.

In response to these predicaments, the federal government is working to create around three million new domestic jobs and around half a million foreign employment opportunities, following agreements with five countries.

The Ministry of Labor & Skills has been expanding its Technical & Vocational Education & Training (TVET) programs. Mulu Keneni, deputy director of Training & Institutional Capacity Building, revealed plans to incorporate about 632,000 students into the programs across 1,300 private and public campuses nationwide.

While requirements differ based on the specific discipline students pursue, prospective entrants are expected to have at least finished 12th grade before joining the long-term TVET programs. However, uncertainties over the effectiveness of these programs arise.