Fresh solutions for Africa’s jobs challenge

The outbreak of Covid-19 has sharpened existing concerns about job losses. In Africa, the pandemic threatens to cut a staggering 30 million jobs, and push up to 49 million more people into extreme poverty.

And so the work of social enterprises in sub-Saharan Africa – many of which are now busy pivoting their business models or dipping into reserves to continue paying employees who cannot work under lockdown – looks more valuable than ever. That’s especially the case since many social enterprises employ those who may otherwise struggle to get work, such as young people with no training or experience, former sex workers or those from low-income homes. In this time of “vulnerability and uncertainty”, says Owen Dowsett, a senior consultant at the British Council, the potential of social enterprise to help build a better future by looking out for such people “cannot be understated”. 

Echoing similar trends in other parts of the world, social enterprises in Africa are more likely to employ women; more working women is good for both the growth of the economy, and for women’s empowerment. Forty-one per cent have a woman in charge, compared with just 27% of profit-first businesses – and in some countries, the difference is even more striking: in Ghana, the percentage of female leaders is almost three times higher among social enterprises compared to mainstream businesses.

It’s not only about getting someone into a job, and keeping them there, though. Whether it is a good job – that is, fairly-paid, secure work that offers some prospects of personal development – is also key.

That, after all, is the crux of Africa’s employment challenge. While the continent managed to maintain, and even slightly increase its ratio of jobs per population between 2000 and 2017, most new jobs created were in areas such as subsistence agriculture or in low-skilled, low-paid roles. Worryingly, most people living in poverty already have work – they’re often referred to as the ‘working poor’ – rather than being unemployed. 

One might expect businesses focused primarily on social impact to buck this trend, providing strong role models of decent employment. But the British Council findings – believed to be the first to look in detail at social enterprises and job creation on the continent – suggest it's not so clear-cut.

The social enterprises studied did give longer notice periods, on average, than profit-first businesses, and were more likely to offer five or more days each year of training than their profit-first counterparts. 

But they are not – on the whole – paying a better wage. In fact, just 57% of social enterprises studied were paying a ‘living wage’ (this is calculated per country, and based on the cost of food, housing and transport expenses) to their highest-paid employee; fewer than 5% paid the lowest-paid worker a living wage.

The ability to pay a fair wage appears to be linked to a social enterprise’s size and sustainability: the researchers found that social enterprises generally need to reach a turnover of £10,000 a year before they can start paying a living wage. (Eighty-two per cent of those operating above this threshold pay their highest-paid worker above the living wage, compared with just 32% among those turning over less than £10,000.) 

The implication for those supporting social entrepreneurs is clear: they need to help social enterprises not just to get started, but also with the arguably more difficult task of growing. And, says Social Impact Consulting’s Mark Richardson, a co-author of the research: to help social entrepreneurs to understand the concept of a living wage, and encourage them to factor this into business planning early on. 

Richard Catherall, CEO of Kataris Ventures and another co-author, believes social enterprise leaders have the opportunity to go “above and beyond” workforce expectations and demonstrate what it means to be a good employer. Why, then, aren’t more of them doing so? 

“They’re under a lot of pressure to be cost-effective, to be cheap,” he says, adding that the pressure to focus on the wider social impact an enterprise can achieve can sometimes create “a perverse incentive” to overlook a more immediate way of improving people’s lives – those it directly employs. Funders, investors and consumers can all make clear that they expect better.

Emi-Beth Quantson, founder of Ghanaian coffee company Kawa Moka, says the challenges of providing decent work are similar to the challenges of running a social enterprise in general – and relate to limited resources. Unlike profit-focused businesses, social ones often grow more slowly. This, she says, is “because it’s not just a question of profitability, but it’s also a question of impact…we ensure that whatever we’re doing we’re also having impact”.

But rather than seeing only the challenges of providing decent work, Quantson says there are also “a lot of pluses” of being a social enterprise: offering the kind of meaningful work that she says many job-seekers look for; and, being a relatively small organisation, offering the chance to learn various skills. “It allows opportunity for growth, and a bit of adventure and flexibility.”

The entrepreneurial skills that Kawa Moka teaches to its employees are likely to be valuable because the scale of the jobs challenge means that simply training people for existing jobs won’t be enough.

And yet, says Richardson, the “vast majority” of employment schemes in the region have typically focused on training: trying to match up the need of employers with better-skilled people. In reality, training is “very rarely matched with business needs”; when it is, the overall impact on employment is “virtually nil”, because the outcome is a slightly more skilled workforce, not necessarily more people in jobs. Helping to develop both new and existing businesses, meanwhile, is one of the best ways to create jobs in urban areas. (In rural areas, it’s best to focus on improving the efficiency of agriculture and helping farmers diversify their income.)

Traditionally, African parents pinned their hopes on a white collar job for their children, says Agyeman-Togobo. But more and more young people are breaking that mould – like Ghana’s Regina Honu, who in 2012 quit her banking job to set up a software firm and tech academy for girls. To date, her programmes have trained more than 6,000 people, many of whom have gone on to higher education, win scholarships to study in the US, or to set up their own businesses or foundations.

And there’s no reason why many of the next generation of entrepreneurs shouldn’t embrace a social cause – such as helping others into work themselves. In fact, social (as opposed to profit-first) entrepreneurship is already providing opportunities for around 64 million people – a quarter of all entrepreneurs – in sub-Saharan Africa. Some may find that relatively high proportion unsurprising: as head of the African Venture Philanthropy Alliance Frank Aswani has pointed out, social entrepreneurs “run towards problems, not away from problems – and Africa has a lot of problems.”

There are valid concerns about the impact of new technologies on the future of work. In Rwanda, when ‘tap and go’ technology was adopted on buses from 2015, replacing manual jobs, it ultimately led to hundreds of people becoming unemployed.

But many point to the opportunities of tech too. And social enterprises in sub-Saharan Africa are “among the world leaders”, according to the report’s authors, in pioneering applications of the fourth industrial revolution – such as artificial intelligence, robotics, the Internet of Things and 3D printing.

That’s reflected by high-profile, international interest in the continent: prior to Covid, Twitter boss Jack Dorsey had planned to spend six months there, tweeting as part of his announcement: “Africa will define the future (especially the Bitcoin one!).” It signalled an acknowledgement, Catherall believes, that the big breakthrough innovations were “not coming out of Stanford, they were coming out of the Sahara”.

And many of these trailblazers are using these newest technologies to revive or modernise traditional sources of income – like farming, which provides a living for the majority of people in sub-Saharan Africa. 

Mkulima Young uses social media and radio to rebrand farming as an exciting career possibility for young people; Nairobi-based Kuza deploys a network of ‘agripreneurs’ to bring digital learning materials to farmers in remote areas.