Life Matters | Jun 08,2019
Feb 22 , 2020
By Solomon Debebe
Unemployment continues to be a problem that contributes to political instability as well as robbing the youth of its energy and creativity. Prime Minister Abiy Ahmed's (PhD) administration seems to be repeating the mistakes of its predecessors by merely throwing money at the problem, writes Solomon Debebe (firstname.lastname@example.org), who has an MBA in management and several years of experience working in international NGOs and is interested in the area of youth development and employment.
We have gone through rough times in search of democracy and prosperity over the past century and a half. The story has not been different for the past three decades when major sections of the population were politically and economically disenfranchised.
Arguably, the nation is on a path of sociopolitical reform. The greatest reason for this was the sacrifice of the youth in many parts of the nation. These youth demanded justice and representation. Most importantly, they also demanded jobs. As Ethiopia tries once more to reorient its path to prosperity, we need to pause and ask how we are meeting these demands.
These questions are quite critical as the reality on the ground suggests that many youths are still struggling to get employed and keep up with the rising cost of living. Prime Minister Abiy Ahmed’s (PhD) administration faces a lot of problems in job creation that its predecessors faced. But it also suffers new challenges detrimental to ensuring that the energy and creativity of the youth are not wasted.
The major challenge is stability. Jobs are created whenever people strive to respond to their needs and wants. To do this, communities need to have stability and peace in the neighbourhoods, qebeles, weredas,zones, regions or country at large. In the absence of this, businesses and individuals interested in making investments that create jobs will shy away.
It is hard to attract investors when religious places are burned, properties are destroyed, roads are habitually closed and innocent civilians are killed. If the government lacks the capacity to use its monopoly of violence to deal with the absence of law and order appropriately and ensure a stable political environment, job creation will be easier said than done.
The government must also focus on wage employment. Previous administrations, through “youth funds,” believed they could address unemployment by throwing billions of Birr at the problem. The current administration seems to be repeating the same mistake, giving out loans to organised youth, mostly in the construction industry, but without efficient strategies to develop business and support systems to help the youth thrive.
This fiscal year, the government plans to create three million job opportunities, according to the Jobs Creation Commission. Recently, nearly 1.2 million jobs were created. But this seems to be more of a matter of playing with numbers - 34pc were temporary positions - than a reflection of the facts on the ground.
The African Development Bank (AfDB) recently released its flagship publication, the African Economic Outlook 2020, which argued against such generalisation of economic realities. Instead of throwing the numbers at us, the Commission would have done more of a service if it mentioned how many of these pay a living wage or have been created by the private sector.
The current administration should design strategies to boost wage employment in the private sector by improving the ecosystem around it. It is estimated that around two million youth enter the labour market every year, but all of them cannot be accommodated by the public sector. The private sector must rise to the occasion, but to do this the government must smoothen the business environment.
But wage employment is not the only way. Many youth globally want to pursue self-employment by way of entrepreneurship. However, this requires an encouraging ecosystem with a nurturing state. Policies, procedures and practices should be aimed at supporting new businesses, not merely policing them.
One can take an example of the street-side vendors, where clothes, electronics and trinkets are sold. The government, despite recent efforts, has spent most of its time trying to get them off the streets instead of assimilating them into the formal economy.
It could instead ramp up recent efforts to formalise these businesses by giving them working spaces, collecting small fees and gradually taxing them. Such self-employment techniques should not be seen as a last resort, instead of an expression of an entrepreneurial mindset.
Current job creation policies, by way of the “youth fund,” is not only a challenge but a burden to citizens. If the intention is to create access to finance to those youth, we have millions of opportunities to do as such, which include incentivising banks to take risks on youth businesses.
There is currently a lack of professionalism in the management of the fund as well as issues of transparency. Given the business as usual tendency of the bureaucracy, even in the face of a changed economic and political environment, the private sector offers a way out of doing what is familiar and into doing what is most effective.
Even though, unrest is pushing the country into what most of us fear will be civil war, it is unacceptable to assume that there is no light at the end of the tunnel. We shall remain committed to expose the drawbacks of those currently in power and continue to contribute to a successful transition into democracy and prosperity. It is essential that wage employment is taken as a key government priority to lift many from poverty and that self-employment is given its due attention.
“The mouth does not eat if the feet do not walk and the hands work,” goes an old proverb, which is to say that it is essential that everyone works to prosper.
PUBLISHED ON Feb 22,2020 [ VOL 20 , NO 1034]
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