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Closing Africa’s Skill-Gap Offers Private Sector Opportunities

Closing Africa’s Skill-Gap Offers Private Sector Opportunities

Ghana’s cocoa processing requires high-tech skills. photo: World Bank.
Ghana’s cocoa processing requires high-tech skills. photo: World Bank.

The STEM Gap

In April, the World Bank approved $150 million to finance 19 university-based “Centers of Excellence” in seven countries in West and Central Africa for advanced specialized studies in science, technology, engineering and mathematics (STEM)-related disciplines, as well as in agriculture and health.

The goal of the Africa Centers of Excellence project is to “equip young Africans with new scientific and technical skills.” According to the Bank, the continent faces a serious shortage of skilled workers in fast-growing sectors such as extractive industries, energy, water, and infrastructure.

“The result of having too few skilled workers in Africa’s extractive industries is that oil and minerals are extracted in Africa but processed elsewhere in the world, to the detriment of African industries and jobs,” notes the Bank.

Nigeria alone requires 51,000 engineers to fast-track its power sector upgrades, according to the National Power Training Institute of Nigeria. The problem is well illustrated by the current rebuilding of Nigeria’s electric power infrastructure after years of neglect.

Inadequate human capital as the weakest link in Nigeria’s power sector, according to GE, which has been contracted to repair six recently privatized generating plants formally operated by the defunct Power Holding Company of Nigeria and the 10 plants built under the National Integrated Power Project.

According to GE, out of the 10,000 megawatts worth of power plants connected to the grid, only 4,000 megawatts worth of power is being generated.

South Africa has a similar dilemma. Its rapidly expanding renewable energy program — which is expected to account for more than 20 percent of the country’s total power generation capacity by 2030, compared to 5 percent today – continues to be a major source of employment opportunities, according to an April 2014 Frost & Sullivan report.

But the report notes that some projects may have been slowed because “From a private investment point of view, the main challenges included both the lack of local technical know-how and skills.”

New Strategies

Considering China’s ongoing involvement, you would think the skill-gap problem wouldn’t be so large. According to the Forum of China-Africa Cooperation, by the end of 2013, China had trained 54,000 African technicians and sent more than 360,000 Chinese technicians, volunteers and agricultural specialists to Africa.

There were also 33,000 African students in China last year. During a visit to Africa in May, Chinese Premier Li Keqiang said his government will provide African countries with an additional 18,000 government scholarships and help train another 30,000 various professionals.

Nevertheless, the skill-gap problem persists and getting a handle on a firm strategy is the focus of some organizations who want more private sector involvement.

In May, the World Economic Forum launched the Africa Skills Initiative, a program to bring together private and public stakeholders to shape national and regional skills and employment policies.

The strategy is to use the Forum’s Human Capital Index, which provides an overview on how well countries are leveraging their human capital and establishing workforces. Elsie Kanza, Head of Africa at the World Economic Forum, said in a statement: “The Africa Skills Initiative will facilitate informed dialogue on skills gap issues cutting across sectors and geographies and provide opportunities to share solutions at regional and local levels.”

The opportunities for international companies that have a presence in Africa – particularly energy companies that need workers – to find creative ways to solve this skill-gap appears to be wide open.

“I think in general, part of the opportunity and challenge in Africa is a whole upgrading of skills and capacities of local individuals more broadly,” U.S. African Development Foundation’s Berenbach told AFKInsider. “And that has to do with the rapid pace of economic growth and the fact that the development of the educational system is kind of lagging behind economic growth indicators.”