AfriPulse
African leaders, policymakers and entrepreneurs have identified economic reforms, regional trade integration and social entrepreneurship as critical pathways for tackling the continent’s growing employment challenge.
The discussion took place during a high-level session titled “Africa’s Job Engine” at the World Economic Forum Annual Meeting 2026 in Davos, where participants explored how governments and businesses can generate sustainable jobs for Africa’s rapidly expanding youth population.
Godfrey Mutizwa, a veteran African journalist highlighted the scale of the employment challenge facing policymakers across the continent.
Mutizwa warned that Africa’s demographic growth could become either an opportunity or a crisis if job creation does not keep pace. “The question facing African policymakers is boom or bust as the continent’s young population rockets towards 2.5 billion by 2050,” he said.
He noted that labour market pressure is already evident. “The African Development Bank estimates that 13 million young Africans enter the job market every year, competing for only three million jobs in the formal economy,” Mutizwa explained, adding that declining development aid is also tightening financial support for job creation.
Read also: Private sector job creation stalls in government-jobs dominated states – NESG
Nigeria highlights reforms and private sector innovation
During the session, Yusuf Maitama Tuggar, Nigeria’s Minister of Foreign Affairs, emphasised that economic reforms and stronger private-sector participation are key to expanding employment opportunities in the country.
He explained that the government has prioritised macroeconomic reforms to stabilise the economy and improve access to foreign exchange. “We have focused first and foremost on macroeconomic reform, and we have gone very far,” Tuggar said, adding that the measures have strengthened financial stability.
Tuggar also highlighted structural changes in the energy sector following the removal of fuel subsidies and the introduction of new legislation. “We have removed petroleum subsidies and introduced regulatory frameworks such as the Electricity Act, which has opened opportunities for the private sector to invest in power generation, transmission and distribution,” he explained.
However, he stressed that sustainable job creation must largely be driven by businesses rather than governments. “We cannot rely on the public sector to create jobs,” he said, noting that companies are already taking advantage of opportunities created by the improved regulatory environment.
He also pointed to emerging initiatives in rural communities where renewable energy and agricultural innovation are supporting local economies. “In rural areas, companies are developing solar-powered ecosystems that support farmers, micro-credit systems and local markets,” Tuggar said.
In addition, he underscored the importance of integrating Africa’s large informal economy into the formal sector. “Bringing the informal sector into the formal economy is unleashing enormous potential and opportunities,” he added.
Read also:Kano empowers 2,260 Youths with skills, tools, cash to drive job creation
Ethiopia emphasises industrialisation and infrastructure
Also speaking during the discussion, Ahmed Shide, Ethiopia’s Minister of Finance, said the country is implementing sweeping economic reforms aimed at strengthening private-sector participation and expanding employment opportunities.
He noted that investing in job creation and skills development has become a national priority.
Shide noted that agriculture and agro-processing are already generating employment at scale. “Agri-food value chains, from horticulture and coffee to livestock and cereals continue to absorb millions of workers across farms, logistics and processing,” he said.
He also highlighted the role of Ethiopia’s industrial parks. “Industrial parks mobilised private investment and created more than 90,000 jobs in 2022, with about 87 percent of those jobs held by women,” he stated.
Nevertheless, infrastructure gaps remain a major constraint. “A key challenge is the high cost and unreliability of production and logistics, as well as limited energy availability across the region,” Shide said, warning that “if firms cannot expand, they cannot hire at scale.”
He therefore stressed that regional integration under the African Continental Free Trade Area (AfCFTA) must be supported by investment in power, logistics and digital infrastructure. “Trade integration without energy integration does not create jobs,” he said, adding that with the right infrastructure, AfCFTA could become “not just a trade agreement but a jobs engine for Africa.”
Read also: Nigeria–US trade pact puts job creation at the centre of economic cooperation
Social enterprises gaining momentum
Meanwhile, Angela Oduor-Lungat, executive director of Shahidi Inc., highlighted the growing role of social enterprises in driving inclusive economic growth across Africa.
Referring to a new report presented at the forum, she said the sector has become a significant contributor to employment and economic activity. “About 2.18 million social enterprises operate across Africa, creating tens of millions of jobs and contributing up to three percent of the continent’s GDP”.
She added that women and young people play a leading role in the sector. “Nearly one in two social enterprises is led by women, while about a third are led by young people,” she said.
According to her, successful social enterprises tend to share three characteristics: they are problem-led and people-centred, they rely on strong networks and peer ecosystems, and they use technology primarily as an enabler to reach underserved communities.
However, she warned that access to finance remains a major barrier to growth. “More than 55 percent of social enterprises cite access to capital as their biggest constraint,” she said, noting that many fall into a “missing middle” where they are too large for grants but considered too risky for commercial financing.
Oduor-Lungat therefore called for more flexible funding structures. “We need patient and flexible financing, as well as policies that create a supportive environment for these enterprises to grow,” she emphasised.
As the discussion turned to regional trade integration, participants agreed that the African Continental Free Trade Area could significantly boost job creation if implemented effectively.
Oduor-Lungat urged policymakers to make the agreement more accessible to smaller businesses, while Tuggar echoed the need for practical implementation while cautioning against overburdening the agreement with too many policy objectives.
Ngozi Ekugo
Ngozi Ekugo is a Senior Correspondent at BusinessDay. She holds a Masters in management from the University of Lagos, an undergraduate from University of Lagos, and is in an alumni of Queen’s College. Shes currently an associate member of the Chartered Institute of Personnel Management (CIPM). She has a brief experience at Goldman sachs, London in its Human Capital Management division. She is interested in human capital development and is leveraging her varied experience across sectors to report labour and global mobility trends for stakeholders to make informed decisions.
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