Skills shortage could hamper Africa growth surge

By Bate Felix

Dakar, Senegal, Thursday April 11, 2013

(Reuters) - Abdoul Aziz Tamba is in his final year of an English course at Senegal's Cheikh Anta Diop University, but he has little hope of finding employment after three years of study.

"Everyone expects me to become a teacher or a translator, but there are no jobs," the 24-year-old told Reuters in Dakar. "I'm studying in a field where it's nearly impossible to find work."

Tamba is just one of hundreds of thousands of graduates leaving African universities each year unable to find work because they lack the skills for the continent's job market.

The world's second fastest growing region after Asia, Africa's economyhas boomed over the past decade, thanks largely to discoveries and development of mineral resources including oil, iron ore, bauxite and gold.

Investors are pouring billions of dollars into resource projects and other investments across the continent, but these require skilled geologists, welders, engineers, project managers, technicians and finance and regulatory experts.

With many firms struggling to find the right people, experts warn that African universities are failing the continent's multiplying youth and wasting an opportunity for development.

"There is a huge gap between the demand and supply of skilled labour," said Didier Acouetey, executive president of AfricSearch, a Paris-based firm that hires skilled workers from the African diaspora to return to the continent.

"The financial sector needs people, so do telecoms, construction, infrastructure, engineering," Acouetey said. "Unfortunately, not enough people are being trained."

BRAIN DRAIN

A debilitating exodus of African talent to more developed nations is one reason for the skills shortage.

For example, there could be as many as 4 million Zimbabweans living outside their country, half of them in South Africa, Zimbabwe's Finance Minister Tendai Biti told the Reuters Africa Investment Summit this week.

"Many of those are the crème de la crème of our country," he said. Biti added many would come back if Zimbabwe, once a star economic performer, ended a long period of political stalemate and economic collapse and held successful elections this year.

The talent pool tended to be shallower in countries that experienced extended periods of civil war that disrupted education and certain industries, said Diana Layfield, Standard Chartered Bank's STANB.UL chief executive for Africa.

But she added: "There are other markets like South Africa, Nigeria, Kenya, which I think have extremely deep talent pools."

"I challenge anyone who says there was really a skills shortage in those markets," she told Reuters, adding that former Standard Chartered staff in Africa could be found among the top executives of many banks on the continent.

But in the African mining sector, firms are struggling to fill vacancies, from basic tasks to complex project management, due to lack of qualified staff, said Richard Duffy, executive vice-president for Africa at AngloGold Ashanti (ANGJ.J).

The problem is acute in Guinea, the world's top producer of the aluminum ore bauxite, where authorities have an ambitious plan to employ only Guineans within seven to eight years in some parts of the mining sector.

In 2011, the Guinean Chamber of Mines conducted a study on the sector's skills requirements.

"Around 30,000 people need to be trained to various skill levels within the next six years," Duffy said. "This highlights the scale of the problem."

REINVENTING UNIVERSITIES

Africa has the highest share of social science and humanities graduates of any world region, according to a study last year by the Organisation for Economic Co-operation and Development (OECD). It concluded that African universities were failing to prepare young people for the labour market.

Humanities and social sciences made up over 70 percent of graduates in sub-Saharan Africa, versus 53 percent in Asia and 61 percent in Latin America between 2008 and 2010, the OECD said.

Despite increasingly high demand for skills in manufacturing, engineering, agriculture, retail and hospitality, graduates in these fields were scarce.

"We need to reinvent the university system. We have to think differently, teach differently," said Saliou Ndiaye, rector of Cheikh Anta Diop University in the bustling Senegalese capital.

Once the top institution in West Africa, the university is slowly introducing reforms despite a lack of financial resources and crippling strikes by students and lecturers over poor working conditions, often ending in clashes with police.

It launched a civil engineering course this year, partnering with firms such as France's Eiffage (FOUG.PA), the curriculum structured jointly by company executives and lecturers.

But Ndiaye said applying the reforms across the sprawling university will take time, with 65,500 students crowded into facilities built for just 5,000.

"DANGEROUS POWDER KEG"

Tiemoko Kone, governor of the West African Central Bank, said education systems on the continent should be more focused on the needs of economies. Ghana, Senegal and Ivory Coastwere making progress on professional training.

"The needs can become very acute very quickly, for example with oil," Kone said.

"It is only once you discover oil that you realize you need a trained labour force. Ghana has quickly become a center for training the oil sector now, and many countries in the region are sending people there to train."

Some executives, however, say private business cannot leave the skills development burden solely to governments.

"We need universities that can give us people that can think," said Toyota Africa chief executive Johan van Zyl. "Universities should not produce people that can do certain jobs. That's our responsibility, on-the-job training."

Some African companies were already spending a lot of money on skills development, said Sipho Nkosi, chief executive of South African coal producer Exxaro (EXXJ.J), which spends over 5.5 percent of its wage bill on training.

The rising number of unemployed young graduates in Africa not only posed a risk to economic growth, but also constituted a "dangerous powder keg ready to explode in societies", Nigerian president Olusegun Obasanjo has warned.

Speaking at a forum on youth unemployment in Dakar late last year, he cited the example of Nigerian billionaire entrepreneur Aliko Dangote, who recently announced vacancies for 1,000 truck drivers in his cement and distribution businesses.

"Six people who applied for the job held a PhD degree, 641 had Masters degrees and over 1,000 had a university degree," Obasanjo said.

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(For other news from Reuters Africa Investment Summit, click here)

(Additional reporting by Joe Bavier in Abidjan and Tosin Sulaiman, Benon Oluka and Zandi Shabalala in Johannesburg; Editing by Pascal Fletcher and Will Waterman)