The government should not promise jobs to the youth; it should stick its focus on creating an enabling ecosystem for a private-sector led economy to generate new investment and jobs. That way, the annual 150,000 jobs target should become a direct onus of the Private Sector Federation.
This commentary is in context of two reports that were released this week. First the Rwanda Development Board (RDB) releasing its investment report for 2017, and the National Bank of Rwanda, unveiling the state of the economy statement.
From RDB’s report we heard that the economy attracted investments worth 1.6billion in 2017 while from BNR we learnt that the country’s exports surged, earning $463.16 million in the first six months of 2018, up from $375.91 million in the same period last year.
In both performance reports, the government scored top marks at creating an attractive economy for investment and trade, pillars that underpin job creation. From maintaining homeland security to marketing Rwanda internationally, the government is doing a great job!
RDB officials said they want “to create 150,000 off-farm jobs annually. We are confident that these investments will have immediate impact on the employment prospects of young Rwandans”.
Actually, that used to be 200,000 off farm jobs a year, sometime back; clearly, the target has been revised downwards and going by the trend, it could be trimmed further to around 100,000 off-farm jobs a year. In 2017, 38,261 jobs were registered by RDB.
Those jobs were registered in infrastructure, services, manufacturing, tourism, construction, real estate, agriculture and mining sectorswhich generated some 13,477 jobs in 2016. The numbers show that we are miles away from the 150,000 annual jobs target.
The challenge with governments promising to create jobs is that, they most likely would fail to keep that promise mainly because of high population growth rates, negative economic growth and other factors. Let us debate the question of whose responsibility it should be, to create jobs:
“It may seem that this job would fall on the government, but job creation is not their primary role but ultimately, government’s primary mission is providing public goods such as roads, water, electricity, education, security, healthcare,” said American legislator Leanne Krueger-Braneky.
At his recent interaction with young professionals, a young lady asked the President about the lack of jobs for fresh graduates.
But to the government’s credit, Rwanda is also home to one of the largest population of self-employed CEOs, young people taking advantage of the enabling doing business environment to create and run own enterprises, dropping the centuries old attitude of ‘job seeking.’
Government should merely be a facilitator of value creation and expansion. That means, if RDB’s US$1.6billion investments can generate, for instance, 5,000 jobs, facilitating their growth could see more value generated hence more jobs created.
That is what the Made in Rwanda initiative, a value creation facilitator by the government, has done, pushing export earnings from US$375.91million in the first six months of 2017 to US$463million same period this year. The value chain here covers new jobs created.
In creating 150,000 off farm jobs, the government has done well at its role of facilitator. Now we must audit the private sector through the private sector federation and see whether they’re doing their fair bit of the assignment. And if they are not, let us help them address the barriers.
We should hear the private sector saying; these two factories want to create 1,000 jobs by end of 2019, but trade barrier A and B are making it hard; can government do something?
That is strategic advocacy. When the government responds by removing those barriers, it will be facilitating the two factories to create the pledged 1,000 jobs. The only jobs government should create directly are those in the public service sector.
But even then, there is a new elephant in the room. In a world of rapid technological advancement with automation at the center of things, what responsibility does the private sector have in job creation?
Several studies have predicted automation will wipe out millions of global jobs in the next few years, another reason why it’s risky for governments to take direct responsibility for creating new jobs. But if automation is innovation, then it should come with new opportunities.
The role of government in that case, would be to moderate this technological advancement as to safeguard an environment that would facilitate more value creation hence requiring new jobs.
In fact, automation and other technological innovations, while expected to reduce corporate jobs could increase individual enterprise, enabling more young people to use technology to provide a service that would generate value for themselves.
Dambisa Moyo, a global economist and the author of Dead Aid puts it right when he says: “The onus to address the impact of technology on job creation, … rests with combined efforts and active co-operation between governments and the private sector”.
In Rwanda’s case, the government appears to be doing its work; can we see a more active private sector, with regular reports on job creation?
The views expressed in this article are of the author.