Regional Infrastructure as a Catalyst for Job Creation

THE FIRST ORDINARY SESSION OF THE AU STC ON TRANSPORT, INTERCONTINENTAL AND INTERREGIONAL INFRASTRUCTURE,

ENERGY AND TOURISM

14th March 2017, Lomé/Togo

Outline

1.   HowcaninfrastructurecreateemploymentforAfrica’slabourforce?

2.   Whatisneededfromourpoli=calleadersandpolicymakerstorealizethejobcrea=onpoten=alofinfrastructure?

Africa`sDemographicDividend

•  300millionyouthenteringthelabourmarketun=l2030

•  HalfofAfrica`scurrentpopula=onof1.1billionunder25years

“Apopula)onthathasanaverageageof49yearscannotbegovernedinthesamewayasapopula)onwheretheaverageageis19yearsold.“=>Capitalizeonthedemographicdividendandcreatejobs(seealsoAgenda2063)

Sources:WorldBank(2011),AfricaDevelopmentIndicators2011,WashingtonDC;UNWorldPopula=onProspects

Infrastructureasacatalystforjobcrea=on

•  Infrastructureandeconomicdevelopment:Infrastructureinvestmentcontributesupto2%toGDPofAfricanna=ons(OECD2012)

•  Infrastructureandjobcrea=on:DirectJobs IndirectJobs InducedJobs Spill-overeffectsCreatedthroughprojectprepara=on,construc=on,opera=onandmaintenanceofinfrastructure

Createdbyinputsofgoodsandservicesforinfrastructureprojects

Createdbyconsump=onbyworkersdirectlyorindirectlyemployed

Createdfromincreasedtransportandtrade,improvedelectrifica=on,beTerinternetconnec=vity,etc.

PIDACanCreateJobsforAfrica`sYouth

AfricanleadersadoptedPIDAin2012asthemeanstos=mulatesocio-economicgrowth,investment,andintra-Africantrade!HowPIDAcancreatejobs–someexamples/es=mates:1.   INGAIII:7,000construc=onjobsand3,000permanentjobsduring

opera=on(source:SociétéNa=onaled’Electricité(SNEL))2.   Trans-AfricanHighwayNetwork:350,000permanentjobsfor

maintenanceandnotablespillovereffectsfromincreasedtrade(source:WorldBank)

3.   SambangalouDam:1000fishingjobsinthereservoir(source:BRLIngénierie)

Example:North-SouthCorridor

KasumbalesaBorderPost

Harare–ChirunduRoad

BeitbridgeBorderPost*

Harare-Beitbridge

Road

*LusakaDryPort

NorthSouthCorridorRail

BeiraMachipandaRoad/Rail

NorthSouthCorridor–Es=matedImpactsCreate547kextrajobsby2035;forexample:•  88knewjobsintheagriculturesectorofTanzania

•  2kjobsinmininginZimbabwe•  43kinretail&wholesaleinMozambique

•  11kinagricultureinDRC•  31kinmanufacturinginSouthAfrica

Source:DBSA/BCG

MaximizingJobCrea=onwithInfrastructure–Planningand

Implementa=onToolkit•  CurrentlybeingdevelopedbyNEPADAgency•  TheToolkitwillgiveprac=calanswerstotwoques=ons:

1.  Howcanwees=mateandtracktheimpactofinfrastructuredevelopmentonthelabourmarket,i.e.howmanyjobsarecreatedviatheimplementa)onofPIDAprojects?

2.  Howcanweplanandcoordinateregionalinfrastructureprojectssothatjobcrea=onismaximised/op=mized?

Whatisneededfromourpoli=calleadersandpolicymakerstorealize

thejobcrea=onpoten=alofinfrastructure?

Policiesandregula=onsonAfricanLocalContent

-  PromoteinfrastructuredevelopmentsupportedbyAfricanlocallabourandAfricanlocalsuppliers,therebycrea=ngemploymentanddemandforlocalbusinesses

-  Thespa=aldimensionofthelocalcontentpolicyinthePIDA/Africancontextwillberegional

Examplesofop=onallocalcontentpoliciesthatcouldbeadoptedbyAfricancountries(a`ereconomicimpactanalysis):-  Requiringorincen=vizinguseofAfricanservicesuppliersandlabour-  Requiringjointventuresoraspecifiedlevelofdomes=cequity-  Requiringorincen=vizingtransferoftechnology

NigerianLocalContentPolicy–preliminaryresults

Source:AfricanDevelopmentBank,Bill&MelindaGatesFounda=on;Paper6:Crea=nglocalcontentforhumandevelopmentinAfrica‘snewnaturalresourcerichcountries

Enablinglocalcontentdeliverywithskillsandenterprisedevelopment

SkillsDevelopment–Whatneedstobedone?

Iden=fica=onoftheSkillsGap:Ø  Defini=onofthemarketdemandandskill-sets

neededtoimplementpriorityinfrastructureprojects

Ø  Comprehensiveanalysisoflabourmarkets:What

infrastructure-relevantskillsarecurrentlyavailable?

Ø  Iden=fica=onoftheSkillsGap:Whatskillsneed

tobedevelopedtoprepareandimplementthepriorityinfrastructureprojectsusinglocallabourandsupplies?

“Capitalforinfrastructurefinancingisavailable.Whatislackingarewell-prepared,bankableprojects.Tohavethese,capacityandwell-skilledexpertsareneeded.Eitherwebuildthiscapacityonourowncon)nentwithadequateskillsdevelopmentschemesorwehavetoimporttheseskillsfromoutside.”

Requiredpolicyac=onstocloseskillsgap

1.   Makeitapoli=calpriority

2.   Createaregionalskillsmarket

3.   Strengthentrainingins=tutesanduniversi=es4.   AdaptCurricula5.   Combinepublicemploymentprogramswithskills

development

6.   Formstrategicpartnerships

EnterpriseDevelopment

•  Iden=fica=onofsuitablelocalSMEs/poten=alentrepeneurstorespondtomarketdemand

•  Sefngupcapacitydevelopmentprogrammesinclosecoopera=onwithleadbusinesses

•  Improvingaccesstofinance

•  UpscalingofSMEstointerna=onalindustrystandards

•  Mentoringprogrammes

•  Sefngupsustainablestructures:Incubators,partnershipswithTVETcenters,industryenhancementcenters

Projectsponsorsareprovidedwithinforma)on

onpoten)alAfricansuppliers

Suppliersareprovidedwithinforma)onandneededsupporttoselltheirservices(Enterprise

Development)

MatchingFunc=onaligningInfrastructureProjectswithAfricanSuppliers

AfricanProvidersofServices&ProductsInfrastructureProjects

MatchingFunc=ontoMaximizeJob

Crea=on

ClosingtheGAP:

-  Incen=ves&Regula=ons

-  Matching-  Training&

Internships-  Addressing

inefficiencies

15

Integra=ngjobcrea=onininfrastructureprojectplanning

LocalcontentrequirementsinToRforstudiesandmatchmaking

Analysisofrequiredskillsandrespec=vecapacitybuilding

LabourmarketeffectsinESIAs

Localcontentrequirementsintenderingdocuments

Specializedmonitoringins=tu=ons

DraqRequeststoMemberStates(1/2)

WeherebyrequestMemberStatesto:

1.   Acknowledgethepoten=alofregionalinfrastructuredevelopmentasakeylevertocreatejobsandmakeavailableinforma=onanddataoninfrastructureprojectsasinputsforjobes=ma=on

2.   Worktogethertoformulateharmonizedpolicies,tenderingregula=ons,andregionallabormobilityprocessesforinfrastructuredevelopmentrequiringand/orincen=vizingtheuseofAfricanlocalcontenttocreatelocaljobs,strengtheninglocalbusinesses,enablingtheregionalpoolingofAfricanlabour,andensuringtechnologytransfer

3.   Iden=fytheinfrastructureskillsgapandprepare(regional)skillsdevelopmentstrategiesthatenableAfrica‘slabourforce,especiallyAfricanwomen,tomeettheindustryskillsrequirementstopar=cipateinlarge-scaleinfrastructureprojects.

4.   Engageinstrategicpartnershipswithkeyprivatesectoractorstopromotevoca=onaltraining,internships,andtransi=on-to-workini=a=vesininfrastructuredevelopment

5.   SupportthecapacitybuildingandaccesstofundingofAfricanSMEs,sothattheyqualifyforinfrastructuretendersandcanprovidesuppliesforinfrastructureprojects

DraqRequeststoAUC/NEPADAgency

WefurtherrequestMemberStatesto:

5.   LaunchprojectfinancetrainingprogramstoenableAfricanconsul=ngcompaniestoprovidetherequiredprojectfinancesupportforinfrastructuredevelopment(e.g.,financialadvisory,legalsupporttosetupins=tu=onalandlegalstructures,nego=atecontractswithsuppliersofequipmentandservices,arrangeforequity/debtfinanceandriskmi=ga=onstructures)

6.   Supportthecrea=onofaPlaiormthatmatchesAfricanInfrastructureProjectswithAfricanSuppliers,enablingprojectsponsors,governments,developmentpartners,andtheprivatesectortocolloborateinneededinterven=ons

7.   TasktheAfricanUnionCommission/NEPADAgencyto:a)  FinaliseanddisseminatetheJobCrea=onToolkittoes=mateandtracklabourmarket

effectsofregionalinfrastructureprogramsb)  Provideaprac=calguideforprojectimplementersonhowtointegrateskills

developmentandemploymentpromo=onintheinfrastructureprojectlifecyclec)  Developandpilottheintegratedcorridorapproachtolinkindustrialhubsandrural

areas,promoteregionalvaluechains,thuscrea=ngnewemploymentopportuni=es

Ques=onsanddiscussion

شكرا

MERCI

OBRIGADO

THANK YOU

VisionofRegionalValueChainCorridors

RegionalValueChainCorridors:-  Aremul=sectoral(energy,transport,ICT)-  Linkcountries,industrialhubsandruralareas-  Reducetradebarriersforagriculturalandmanufactured

goods-  Triggerfurtherproduc=onandindustrializa=on-  Areimplementedwithskillsdevelopmentprogramsin

coopera=onwithgovernmentsandtheprivatesectortosustainablycreatejobsacrossallsocio-economicandeduca=onalbackgrounds!

Keyconstraintspreven=nglocalbusinessesfromcompe=ngeffec=vely

1.  Capacity:Technicalcapacitytomeetstandards;non-technicalcapacity2.  Funding:Accesstocredit3.  Informa=on:Informa=onasymmetriesonbothsides4.  Skills:5.  Regulatoryandins=tu=onal:Highcostofdoingbusinessassociatedwithsesng

upformalsectorexper=se,landascollateraltoaccessloans

Example:YouthInfrastructureBootcampswithPrivateSector

•  Unrealizedjobopportuni=es:Un(der)employedyouthdespitethefactthatemployerscomplainaboutemptyposts(especiallyatentry-level)

•  Reason:Skilldemandandsupplydon’tmatch•  Methodology:

–  Iden=fica=onofhigh-growthindustryinonecountry/region(e.g.,energysector;logis=cs;financesector)

–  Iden=fica=onofkeyemployersinthatindustryinthatregion–  Iden=fica=onofskillsgap–  Compila=onofacurriculumof6-12weeks(bootcamp)–  Selec=onofcandidatesforboot-camp–  Poten=alworkingcontractswithemployers

•  Successfulexampleofthemethodology:GENERATIONIni=a=veaimingatcrea=ngemploymentfor1millionyouthsun=l2020;successfullyappliedforinstanceinfinancesectorinKenya

•  Examplesforapplica=ononregionalinfrastructure:–  Selec=onofonePIDApilotproject(e.g.,SambangalouDam,CentralCorridor,Abidjan-Lagos-

Corridor),iden=fica=onofnecessaryskillstoadvanceproject,compila=onofcurriculaandiden=fica=onofemployersaspartners

–  Iden=fica=onofthespecialskill-setrequiredforregionalinfrastructuredevelopmentingeneral,e.g.,technicaladvisory,financialstructuring,legaladvisoryforcross-borderprojects,construc=on,etc.andthenapplica=onofmethodology

LocalContentDefini=ons

Clarityandtransparency:Monitoringandmeasuringlocalcontent