The Missing Middle

By Kenneth Molosi, CEO

The creation of employment opportunities continues to be a challenge in Botswana and on the African continent. To exacerbate this even further, there appears to be no viable solutions in sight despite a considerable amount of policy, research, and practitioner interest in resolving this monstrous gorilla in the room. Similar to the rest of the continent, Botswana continues to grapple with the mounting challenge of youth unemployment, which is currently at 28.8% according to Statistics Botswana (Labour Force Survey, 2019).

The government (and to a lesser extent the private sector) has attempted to respond to this challenge by positioning a number of youth-oriented interventions and programmes as a means of generating employment. Among these, there is clear evidence of efforts channeled towards propelling the youth into entrepreneurship. The entrepreneurship development approach serves as a step in the right direction as this is a validated method for creating jobs in any economy across the globe. Despite these noble efforts, the impact is somewhat muted in Botswana due to a design flaw that focuses on developing entrepreneurship at a micro and small business level. Enterprises at this level create less than 25 jobs, compared to medium sized enterprises that generate employment of 26-99 people. Therefore, in an attempt to tilt the scale towards the latter, a strategic re-evaluation of the current entrepreneurship and enterprise development strategy should focus on the development of a large number of sustainable medium-sized businesses as a game-changer.

My observation over time (and most recently through participation in various webinars) is that the “youth employment” crisis continues to be a permanent feature in most conferences, seminars, and workshops across sub-Saharan Africa. This is culminating in a plethora of hurriedly curated youth-oriented programmes and interventions, which is proving to be quite ineffective. What is even more startling is that the key performance indicators clearly show that we continue to waste limited resources on ill-informed programmes that are not addressing the job creation problem.

The latest research findings from the Brookings Institution, indicate that ….the framing of the problem as a “youth employment” crisis means many interventions are relatively small and narrowly targeted. This limited focus based on the framing of the problem inadvertently leads to limited results and failure to address the structural issues that inhibit the creation of quality jobs on the continent. In 2012, I wrote a LinkedIn article, which clearly indicated that the job creation problem in Botswana is purely structural, which is further validated by the latest Brookings Institution research findings. Therefore, it goes without saying that we have to start framing the job creation challenge in a broad and inclusive manner. For example, if the root cause of the problem is the structure of our economy, then a more appropriate question could be “How might we create a vibrant diversified economy that creates jobs sustainably for everyone?” The ‘all about youth’ framing to the job creation challenge in Botswana ignores the bigger question….. “Why is the Botswana economy not creating jobs?”

The framing of these two questions should naturally lead us to deeply reflect on the fundamental structural challenges that are inhibiting job creation in African economies. The latest research still indicates that Africa still suffers from the ‘missing middle’ challenge. The ‘middle’ refers to a robust economic environment where SME growth and sustainability is the norm and there is a concerted effort from Government and the private sector, working in partnership to drive sustainable economic growth. The recent COVID-19 crisis has created a golden opportunity for Africa to hit the reset button, pause and innovate a new approach that will yield the requisite results on the job creation agenda. Current interventions are just not effective as evidenced by the growing unemployment on the continent, which is exacerbated by the COVID-19 crisis.

The conclusions of the latest Brookings Institution report findings, which pronounce that Africa’s ‘youth employment’ crisis is actually a ‘missing jobs’ crisis offers policymakers a clear solution. The institution proposes a counternarrative that places the problem of job creation squarely within the structure of African economies, which simply do not provide opportunities for the creation of good quality jobs for people of all ages. In the Botswana context, a comprehensive solution still lies within the diversification of the economy through an approach that targets economic sectors where the country has clear comparative advantage (such as tourism, mining, manufacturing, etc.) and have been proven to generate and sustain decent jobs.

October 12, 2020