East African economies create better jobs in shift to services

East African economies are gradually transitioning from agriculture to the services sector, a development that has to some extent resulted in the creation of employment opportunities in the region, according to the African Development Bank.

The International Labor Organization estimates that between 2000 and 2020, employment opportunities in the region's services sector more than doubled to 40.8 million, while those in agriculture increased by less than double from 56.7 million to 97.6 million.

Though opportunities in services are projected to grow more rapidly than those in agriculture, the bank said the bulk of employment opportunities would remain in agriculture.

This implies that though workers are expected to transition from agriculture to services, the rate of transition is not as quick as expected.

In its recently published East Africa Regional Economic Outlook 2020, the bank said workers in East Africa may be lacking the requisite skills required for working in the services sector, and that was the reason agriculture continued to employ more people.

Meanwhile, the report said the future of East Africa and Africa in general would be characterized by key disturbances in the future of work manifested in automation, changes in how people worked and collaborated and the information, communication and technology, or ICT, intensity of skills.

It is projected that 52 percent of tasks in the region could be automated based using existing technologies. Additionally, the intensity of ICT used for various tasks would increase in the short to medium term.

Impact of automation

For instance, in Kenya, over the last decade 18.4 percent of formal sector employment occurred in occupations with high ICT intensity.

Digitalization and automation are reducing the demand for routine and manual tasks, while increasing demand for problem-solving and interpersonal skills.

And since automation threatens the jobs of those with basic education, it means that the future of jobs in the region is in activities with higher levels of education.

Further, the high intensity of ICT skills implies that the future belongs to workers who are endowed with intermediate to advanced skills in ICT, the report said.

The report therefore called on policy makers in East Africa to endeavor to integrate ICT skills in the curricula of higher learning institutions.

It also recommended the remodeling of the education systems to create critical and creative thinkers who are emotionally intelligent to fit in an automated and ICT intensive society.

This is in addition to making education financing progressive.

A study of the provision and financing of education in the region revealed that governments were funding education in a regressive manner.

The economic outlook said that in East Africa, tertiary education received 0.84 percent of the region's GDP compared to 0.48 and 0.46 percent for lower and upper secondary education. This meant that East African countries prioritized tertiary education over secondary education.

The report said households provided 85 percent of the financing required for secondary education, implying that many of the poor who could not afford to pay for secondary education dropped out after primary school.