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9 Things We Can Do to Boost Job Creation in Africa

Dr. Sanusi Mohammed Ohiare — Executive Director, Rural Electrification Funds (REF), and Board Member at the Nigeria Rural Electrification Agency
Dr. William Brent — Chief Campaign Officer, Power for All

As goes Nigeria, so goes Africa. This is true generally, given the country’s standing as the largest economy on the continent, but especially when it comes to two of Africa’s biggest challenges: access to electricity and access to jobs. About 21.7 million Nigerians are unemployed, just over one fourth of the population. Among young Nigerians (aged 25 to 34), the largest bloc of the labor force, that rate is even higher at 31%, and higher again – 40% – for those 15-24. At the same time, more than 40% of the country still lives without electricity. 

As Africa emerges from the Covid-19 crisis, urgently tackling both of these problems is an even greater priority — to maintain social stability, reduce migration and increase productivity and income. 

Recent jobs survey data from Power for All shows that decentralized renewable energy (DRE), which includes rooftop solar and mini-grids, is already an important part of the solution. 

Even before the ambitious $350 million Nigeria Electrification Project (NEP) kicked off in earnest in 2019, the country was emerging as a leader in supporting the private sector to scale decentralized renewables and in the process, putting people to work.  According to the survey, the DRE sector accounted for 13,000 direct formal and informal jobs in 2017-18, already 30% more than Nigeria’s electricity, gas and steam sector, and that number was expected to increase to 76,000 in 2022-23. And that does not include “productive use” jobs — new retail businesses or agriculture processing — created within the communities gaining access to electricity, which could be up to 5 times greater.

Jobs being created within the decentralized renewable energy industry are also quality jobs: the majority are middle-income, full-time and long-term, the Power for All research found. Women and youth are also well represented: in Nigeria, for example, women were 52% of the direct employees and nearly half of informal workers, much higher than the fossil fuel industry. Results from the first phase of the government’s rural electrification fund also show a clear benefit to youth job creation, with 75% of the more than 5,000 indirect jobs created going to youth, and that number is expected to double during the next phase.

Upping the ambition originally set by the NEP — reliable power supply for 250,000 small enterprises and 1 million households — Nigeria announced in late 2020 an even more ambitious target through a new program called Solar Power Naija, which aims for five times the number of connections envisioned by the NEP, 250,000 new jobs in the energy sector, plus support for large-scale local manufacturing and assembly as well.

But Nigeria can only be the start. Last year represented the first time in nearly a decade that the number of unelectrified people in Sub-Saharan Africa increased, according to the International Energy Agency (IEA). Unemployment is increasing at a record pace as well. Unless stronger action is taken, 100 million young Africans will be unemployed in 2030, the Africa Development Bank (AfDB) said prior to the pandemic. The situation is even more dire today.

More developed DRE markets like Kenya already show why private sector DRE companies will play a critical role as  job creators in the Covid-19 economic recovery. In 2017–18, according to the Power for All survey, the sector provided 10,000 direct, formal jobs. This scale of employment is similar to the national utility, Kenya Power and Lighting Company, which employs about 11,000 people.

But most noteworthy is the estimated 65,000 productive use already created in Kenya by DRE, according to Power for All’s survey. In a country where 75% of people earn all or part of their income from agriculture, which also accounts for 33% of gross domestic product (GDP), the potential jobs impact is large for Kenya if decentralized renewables are deployed at scale for crop irrigation, food processing, cold storage and access to markets. This dynamic is similar across many countries in Sub-Saharan Africa but remains largely untapped.


9-point Action Agenda

Based on input from a wide set of stakeholders, a 9-point action agenda identified how to more fully unlock the energy access job opportunity:

  1.  strengthen public-private links for technical and soft skills
  2.  promote DRE business development and ensure adequate and affordable financing
  3.  make youth employment central and raise awareness of the opportunity
  4.  increase opportunities for women by developing and implementing gender equality policies
  5.  formalize labor certification
  6.  further data collection to size the productive use employment opportunity
  7.  link rural business and productive use training programs with DRE
  8.  consider local manufacturing opportunities for components like housings, mountings, cabling, and
  9.  improve access to government energy planning and market information to help DRE companies grow.



Powering Jobs Census: Focus on Nigeria

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