Closing Africa’s Skill-Gap Offers Private Sector Opportunities

Africa is facing a critical shortage of hands-on tech and engineering skills with a particular need for energy-related technicians to build and maintain projects all over the subcontinent.

The World Bank, World Economic Forum, General Electric and even China are among the entities that have recently stepped up to close the gaping tech skill-gap in order to get more sub-Saharans into the 21st Century workforce.

“Capacity and skills building are central to the development of Africa,” Patricia Obozuwa, Director of Corporate Communications for GE Africa told AFKInsider in an interview.

According to Obozuwa, GE is working with external organizations such as the Africa Leadership Academy in South Africa, Calabar Technical College in Nigeria and University of Dar Es Salam in Tanzania amongst others “on separate projects to provide internships, scholarships, build curriculum and upgrade learning infrastructure.”

Considering the magnitude of the problem, there are opportunities for more private sector involvement.

Speaking at African Union headquarters in May, Dr. Nkosazana Dlamini Zuma, Chairperson of the African Union Commission said “We have to train hundreds of engineers in almost every sector, town planners, agronomists to name but a few.”

And that means every sector. According to the World Bank: “Africa also suffers from a shortage of trained health workers who can provide high quality maternal health services. This may partially explain why Africa’s maternal mortality rate has remained so tragically high at 500 maternal deaths per 100,000 live births.”

The types and scope of some of the current projects shows just how varied the approach is to tackle Africa’s skill-gap both by private companies and non-governmental agencies.

Company Tech Schools

Private tech companies long operating in sub-Saharan Africa have the biggest need for local technicians and have no problem funding current schools or opening their own to ensure a steady supply for their own Africa operations.

GE, which has a huge presence across Africa and is part of the US Power Africa initiative, is considered the poster child for getting involved.

“I think the GE seems to have taken the challenge quite seriously and are funding curriculum and training for engineers, which I think will benefit Africa more broadly and at the same time benefit GE,” Shari Berenbach, President and CEO of the US African Development Foundation, told AFKInsider in an interview.

Most recently in April, GE agreed to cover the $2 million to upgrade and equip the Government Technical College in Nigeria’s Cross River State. The school will supply technicians for GE’s multibillion dollar factory in Calabar that manufactures generator turbines, coaches for trains, aircraft engines, as well as hospital equipment.

“We see a skills shortage in technical workers not just in Sub-Saharan Africa but in many countries around the world where we work,” GE’s Obozuwa told AFKInsider. “Creating jobs and making people more employable are key. For this reason, it is imperative that as GE’s business grows on the continent, we empower more people by building valuable skills.”

GE isn’t the only international tech company setting up schools.

Since 2011, Samsung Electronics – as part of their global ‘Hope for Children’ initiative – has opened four engineering academies in South Africa, Kenya, Nigeria and Ethiopia. Students in their final year of study at technical institutions are recruited based on their academic performance.

At the Nairobi-based Samsung Electronics Engineering Academy, electronic engineering student go through a one year training program that includes nine months of class work and three months of field internships. The company had invested $250,000 in the setting up of the academy and spends more than $185,000 annually. In 2013, 176 students graduated and 40 percent of them got employed within Samsung or their partner companies.

Qorax Energy, which provides sustainable electricity access to communities that lack energy infrastructure in East Africa, launched an initiative in Somaliland with the help of the World Bank to create an 8-month training program for engineers in renewable energy technology and entrepreneurship at Gollis University’s campuses in Hargeisa, Berbera and Burao.

The curriculum in based in part on the North American Board of Certified Energy Practitioners solar installation certification standards. Ultimately, Qorax’s goal is to create a trained local renewable energy workforce.

Targeting Youth

According to the African Development Bank, with nearly 200 million people aged 15-24, Africa has the youngest and most rapidly growing population in the world. By 2020, Africa will need 122 million jobs.

And the World Economic Forum notes that although Africa has seen annual growth rates of 5 percent in 2012-2013, the continent’s positive outlook is threatened by a skills mismatch which is contributing to high youth unemployment. Currently the rate of youth unemployment for young people is double that of adult unemployment in most African countries.

Mauritania is a good example. The World Bank estimates there are 350,000 out-of-school and unemployed youth in Mauritania alone looking for work.

The World Bank approved a $11.3 million grant in April for the ongoing Mauritania Skills Development Support Project to double the number of youth benefiting from better technical and vocational education and training every year by 2016 and reach 16,000 young people.

According to the Bank: “Nearly six out of ten young Mauritanians enter the labor market without the skills to succeed, leading to unemployment or low productivity among youth on the one hand and a major skills gap on the other, as employers struggle to find trained human resources.”

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.”