AfDB: The bank's human capital strategy for Africa 2014-2018

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Publication Date: 
31 May 2014
Thematic thrusts: 

The vision of the Bank’s Human Capital Strategy (HCS) 2014–2018, is to harness the potential of one billion Africans by building skills and promoting technologies for better jobs, equal opportunities and workforce competitiveness. Several opportunities hold the promise of accelerating Africa’s growth and economic prosperity. The widely recognized economic momentum along with mounting global interest dominated by new powers from the South portrays Africa’s fast-evolving landscape and optimism for its future. Mineral wealth has been discovered. Capital flows are increasing. Middle-class consumer base is growing with strong retail markets. Societies are increasingly open and democratic. New technologies open a leapfrogging potential, and most promising, a demographic dividend endowment.

These profound shifts come with significant repercussions for building human capital amidst downside risks of persistent poverty and increasing inequalities. Africa lives a paradox of rapid economic growth with poverty and inequalities having striking effects on youth and women. The labor market disarray marked by rising skills mismatch, low productivity in the informal sector, unemployment and underemployment against a rising youth population set to reach more than one billion by 2050, reflects a generation at risk. Africa records the world’s lowest school enrollment and quality, leaving over 90 million teenagers struggling for employment in low-paid, informal sector jobs. Unemployment and underemployment of youth and female endanger social cohesion and inclusive development. These coupled with the mixed effects of limited access to quality education, health, nutrition, technology and innovation are strong warning signals to sustaining Africa’s growth and entry into higher value-added areas of production and competitiveness. Failure to tackle such formidable backlogs will deprive a whole generation of opportunities to develop their potential, escape poverty and support the continent’s trajectory toward inclusive growth and economic transformation.

Sustaining growth and making it both inclusive and green—two objectives of the Bank’s Strategy 2013–2022—demands innovative solutions and efficient investments in human capital. Most African economies compete on the basis of factor endowments, with growth dependent primarily on low-skilled labor and natural resources. Moving up the value chain to more efficient and innovation-driven economies is essential to increasing and sustaining growth. This will require high-impact investments in education, science and technology. A vibrant private sector is key for creating jobs, producing and marketing sophisticated goods and services, and latching on to global value chains. Further, improving the quality and inclusiveness of growth will require more citizen participation and greater accountability from public service providers to offer value for money as well as safety nets to build resilience to economic and social shocks and move poor individuals and communities out of poverty.

This Human Capital Strategy, the first for the Bank, is the operational framework for Bank’s interventions in human capital in Africa. The implementation of the HCS will leverage other Bank strategies—including gender, private sector development, Governance Action Plan II (GAP II) and the upcoming Bank’s strategy on Addressing Fragility and Building Resilience in Africa —to build human capital in Africa. It underscores the human capital dimension in all core operational priority areas of strategy 2013–2022, emphasizing skills and technology as crucial for productive workforce and competitive economies within the inclusive and green growth agenda. Guided by selectivity, alignment, harmonization, partnerships, global networks, and results, the HCS will be implemented by ensuring cross-sector collaboration internally and with other partners to develop interventions that take into account the context of fragile states and low and middle income countries.

The HCS is underpinned by lessons learned from Bank’s experience in human capital interventions, country demand and global best practices. The selected areas of support consolidate and build on past and ongoing efforts. Specific lessons point to the need for the Bank to scale up its support to science, technology and innovation in Africa, while addressing exclusion, socio-economic and gender inequalities. The vibrant role of the private sector in education delivery, job creation, access to critical goods and leapfrogging inclusive social infrastructure is crucial for promoting inclusive service delivery and entrepreneurship and ensuring that the knowledge and skills produced contribute to national economic competiveness. Increasingly, and with lessons of the Arab Spring in mind, voice and accountability and safety nets are on the Bank’s agenda as essential for breaking intergenerational poverty and empowering Africa’s poor, particularly women. The strategy thus emphasizes the need to tackle the human capital dimension of fragility in Africa through prevention and mitigation.

The HCS’s main area of focus is Skills and Technology. It underscores short-medium to long term adaptable and sustainable solutions to youth unemployment and economic productivity. The Bank will support investments in skills and technology development in all Regional Member Countries (RMCs) through knowledge work, policy dialogue and lending operations. Interventions will address the daunting challenge of youth and women unemployment and underemployment by tackling labour market skills mismatch and low productivity predominated by the informal sector, which employs many youth and women . The HCS also promotes social entrepreneurship and economic policy that foster job creation. The New Education Model in Africa (NEMA) will adjust to the diversity of RMCs, tapping new opportunities provided by the private sector and ICT to develop e-education and adaptive learning to equip African youth with flexible skills needed for tomorrow’s job market.

The Bank will step up its support to Science, Technology and Innovation. It will focus on building critical skills in several sectors of the economy including infrastructure and natural resource management to enhance competiveness. It will scale up skills in Science, Technology, Engineering and Mathematics (STEM). It will also build regional knowledge and excellence networks to foster opportunities for development and knowledge sharing across borders. It will also promote innovation and connect with global networks. The Bank will also step up its support to foster transformation in TVET to promote innovative entrepreneurship and productivity and to latch onto value chains, particularly in agriculture. Bank support will involve facilitating regional regulatory frameworks for labor mobility among African countries in specific professions.

To further contribute to the inclusive growth agenda, the HCS selectively supports two enablers of human capital. The efficient and inclusive service delivery enabler will leverage relevant areas from existing strategies and those being developed to enhance equitable access to and quality of social basic services. The Bank will support the leapfrogging of social infrastructure, largely through private sector partnership and innovations to improve the access to the “last mile”. The inclusive financial and social systems enabler will strengthen linkages of safety nets with jobs and entrepreneurship. The Bank will engage with a limited number of countries in building financial and social systems—safety nets, and social entrepreneurship- as per demand of the countries and through targeted operations for innovation and catalytic effects. The Bank will continue to support social entrepreneurship for youth and women in selected countries building on the several Africa-wide initiatives to accelerate the response to youth unemployment- Souk At-Tanmia, Social Business, the Africa Youth Employment Initiative and the Global Facility for Employment in Fragile States.

Bank operations focusing on human capital will increasingly be underpinned by economic and sector work and also integrate impact evaluations. Through joint work with other development partners, the Bank will foster analytical work as it prepares operations. It will also adopt a systemic approach to project evaluation, including impact evaluation. Specifically, the Bank’s Impact Evaluation Reference Group will facilitate scaling up the Bank’s efforts in RMCs, building on existing impact evaluations.

Based on its comparative advantage, the Bank will continue to build productive and innovative partnerships to foster practical responsiveness to enhance human capital in Africa. Efforts will be geared up to boost ongoing partnerships including the Bank’s collaboration with the United Nations University and the Pan Africa University program to promote science and technology in education and the Africa Joint Youth Employment Initiative for employment creation. The Bank’s Policy Based Operations in human capital will continue to be guided by close collaboration with other development partners in the spirit of Paris Declaration on Harmonization, Alignment and Coordination (HAC) and the Deauville Partnership.

The strategy will be implemented via a collaborative interdepartmental and decentralized approach. The Human Development Department will continue to provide the expertise for designing Bank operations that require human capital interventions. Operations will be prepared jointly with other sector teams as needed. Human capital will be addressed both through stand-alone operations and through components of operations in other areas. Incentives will be provided for cross-departmental collaboration. Knowledge management and multisectoral approaches will be coordinated through thematic groups for each core operational priority of the Bank’s Strategy for 2013–2022. The strategy will be implemented within the current budget framework, through priority shifts and efficiency gains, particularly a change in staff skill mix.

The HCS stipulates the strategic direction of the Bank’s support to human capital building in RMCs over the period 2014-2018. It embraces the principles of “One Bank approach” and wide ranging external consultations with country and regional stakeholders.

The Boards are requested to approve the Bank Group Human Capital Strategy, covering the period 2014-2018.