Why bridging Africa's skills gap is crucial for growth

Sub-Saharan Africa’s economic promise is clear.

It has the world’s youngest and fastest-growing population; by 2050, a quarter of the world’s working-age population will be living in Africa, with vast natural resources and expanding regional markets.

Yet these strengths are undermined by a persistent weakness: the region’s skills gap.

Every month, around one million young Africans enter the labour market, but 86 per cent of jobs are in the informal sector, and too many lack the competencies demanded by both traditional industries and emerging sectors.

The result is a paradox: a continent brimming with human energy and yet constrained by a shortage of relevant skills.

Employers can’t find the workers they need, while young people can’t find the jobs they want.

Africa has promising opportunities for job creation. The World Bank Group and Africa Development Bank-supported Mission 300 aims to connect 300 million people to electricity by 2030—an investment wave that will demand grid engineers, protection technicians, lines workers, and meter installers across utilities and contractors.

The World Bank Group’s AgriConnect initiative is doubling its agri-finance and agribusiness commitments to $9 billion (Sh1.161 trillion) annually by 2030, with priority countries like Kenya.

But these projects won’t translate into jobs without the right skills pipeline. It is also important to integrate skills development into the informal economy.

What must be done to tackle these challenges? Three priorities stand out.

First, governments need to work with the private sector. Employers are best placed to identify skills needs across value chains.

Programmes designed together with employers in the industry are more relevant, practical, and likely to lead to employment.

This includes co-designing curricula, co-financing programs, and offering structured apprenticeships—so that the training produces workers that firms are ready to hire. 

A good example of this is the East Africa Skills for Transformation and Regional Integration Project, supported by the World Bank’s International Development Association (IDA).

The project is upgrading 16 regional flagship colleges, embedding industrial partnerships into their programs, and rolling out competency-based training to produce technicians in agriculture, energy, IT, manufacturing, and tourism sectors.

So far, the employment rate of its graduates has increased from a baseline of 47 per cent to 79 per cent.

Second, skills programmes must emphasise competence, not just credentials. Too often, funding rewards inputs—like the number of students enrolled or courses offered—rather than outcomes.

Results-based financing can fix this by linking funding to real results, such as jobs and higher wages. For example, tying part of provider payments to verified employment 6–12 months after graduation, earnings growth, and employer satisfaction creates strong incentives for success.  

Employment support services—such as job matching, career guidance, coaching, and seed capital for the self-employed—are also key, so that training translates into livelihoods. Some countries are already adopting this approach.

In Ethiopia, the Education and Skills for Employability project funds short-term training programmes through a competitive model where providers are paid based on the employment outcomes of their graduates.

The approach helps students get the skills employers want, find jobs after training, and get support with financing and job placement, so they are more likely to be hired.

Third, the region must harness technology and innovation to widen opportunity, enable short-term training, and encourage lifelong learning.

Digital platforms and AI can scale access, tailor learning, and ease the shift from training to work. Short, stackable credentials allow workers—including those in the informal sector—to reskill quickly, while blended models bring training to rural and fragile areas.

Linking classroom study with e-apprenticeships, micro-internships, and recognition of prior learning can also turn informal experience into trusted credentials.

If Africa succeeds in reimagining its skills-for-jobs approach, the payoff will be significant: a workforce prepared for both today’s opportunities and tomorrow’s disruptions.

A more responsive, inclusive, and lifelong approach to learning—that is accessible to workers in both the formal and informal job markets—can transform Africa’s demographic challenge into a demographic dividend and help millions of young people have jobs and a good future.

- Ndiame Diop is the World Bank Vice President for Africa East and Southern Region, while Mamta Murthi is the World Bank Vice President, People Vice Presidency