Wanted: One million good jobs for Togo’s youth

Togo, a small country on Africa’s west coast, is home to a young and growing population. With 60% of its 8 million people below the age of 25, youth are Togo’s strongest asset for driving growth and reducing poverty – if they can be productively employed. 

As explored in the World Bank’s recent Togo Jobs Diagnostic, co-financed by GIZ, youth employment is not a one-dimensional challenge and will require a multi-pronged approach to create the conditions for harnessing the potential of Togo’s youth through more and better jobs.

In fact, Togo’s economy must continue to grow and generate 1 million jobs by 2030 just to provide opportunities for new labor market entrants.  Meeting the aspirations of Togo’s increasingly better educated youth, however, will necessitate better jobs that improve their lives. Conscious of the opportunity at hand, Togo’s government has focused on reforms to develop the private sector, attract foreign direct investment, and improve the overall business climate. But will this be enough?

Underemployment, low productivity, and lack of protection to help people cope with shocks

Like other countries in Sub-Saharan Africa, the main challenge for most Togolese is underemployment. Visible underemployment–working less than 35 hours per week--affects 60% of workers. The poor and near poor have no option but to work, and while official unemployment is only 1.7%, the large share of underemployed workers contributes to a lack of financial stability within households.

Most people in Togo work in activities with low productivity and must create their own jobs: Three out of five workers are self-employed, often facing low and volatile earnings and precarious working conditions. In the past, public employment policies have focused primarily on integrating jobs seekers into the formal labor market, but employment opportunities with registered firms that offer better wages are very limited, particularly in rural areas.

The high share of informal jobs also means a lack of mechanisms to help safeguard people from poverty if they lose their earnings or to protect them during illness and old age. Fewer than one in six Togolese individuals have access to any form of social protection. Those covered include only the 5% of the working-age population who have access to social insurance through their formal jobs in the public or private sector and the 13% of poor and vulnerable households that benefit from the government’s safety net or school canteen programs.

Creating more and better jobs for Togo’s youth requires a vibrant private sector

Ultimately, it is the private sector that will create the jobs needed for Togolese youth. Yet, only 15% of firms are in the formal sector, and there are few formal firms of significant size.

Most informal firms work in small subsistence activities and would not be able to afford the costs associated with operating in the formal economy. Thanks to a series of reforms that make it easier to register a firm, the number of registered Togolese firms has been on the rise. Job creation in the private sector, however, has not kept pace due to challenges such as high labor costs and limited access to finance.

As a result, the jobs picture for Togo must include changes in the economic environment that will allow for dynamic growth in the private sector both within existing firms and through the establishment of new firms, especially those founded by younger entrepreneurs. Government support will be critical in creating the conditions for such private sector growth to deliver the promise of high-quality jobs. Even with significant growth in formal wage jobs, most Togolese youth will likely have to continue creating their own activity in the informal sector over the short-term.  Supporting higher productivity and stability of these activities will therefore need to be at the center of Togo’s economic transformation.

A multi-sectoral jobs approach for a brighter future

Accelerating poverty reduction and strengthening social cohesion in Togo will require speeding up a structural transformation of the economy toward higher productivity activities that also create better jobs.  To this end, Togo will need to move faster to reform policies to promote competitiveness, enhance access to finance, and strengthen good governance.

At the macro-level, investing in priority sectors that promise more – and more productive – opportunities will be crucial. As the agricultural and food sectors account for two-thirds of all jobs, improving agricultural productivity and developing higher value-added industries such as food processing will be key. Leveraging Togo’s unique geographical position for further developing logistics services and equipping its young population with digital and technical skills, will support better jobs. Investment climate reforms would also help foster demand for labor in formal, productive firms.

Policies also will need to focus on promoting higher productivity of informal sector activities, and on connecting youth, women, rural populations, and those living with disabilities to employment opportunities. Programs should improve their outreach and include broader economic inclusion initiatives to build and protect human capital, including entrepreneurship. Finally, there is a need for Togo to increase access to social protection including for people working in informal jobs to protect the well-being of their families and to sustain long term productivity growth.

Tackling these challenges presents the government of Togo with an opportunity to invite all stakeholders to the table, including the private sector, as it steps up the coordination of the multi-sectoral jobs agenda. Establishing labor market and social data systems to inform decisions, ensure targeted efforts, support efficient interventions, and facilitate monitoring and evaluation will be a key ingredient for that endeavor.

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