Geographies in Depth

Is it possible to build a welfare state that works in Africa?

Cocoa farmers in Ghana

Cocoa farmers in Ghana Image: REUTERS/Kwasi Kpodo

Abhinav Chugh
Content and Partnerships Lead, World Economic Forum
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This article is part of: World Economic Forum on Africa

Africa has the highest entrepreneurship rate in the world with 22% of working-age Africans starting new businesses – compared with 19% in Latin America and 13% in Asia. Initiatives such as the Monrovia Declaration (1979), the Lagos Plan of Action (1980), the establishment of the African Economic Community (AEC) and Regional Economic Communities (RECs) in the 2000s have all contributed to the continent’s growth.

However, with Africa being the youngest continent, with an average age of 18, and home to over 1.2 billion people, the distribution of the benefits of this growth across various demographics has been highly unequal. There is growing pressure on the system to create more dignified employment opportunities to keep this population employed. The evolution of the agriculture, manufacturing and service sectors is integral to Africa’s vision, but is lagging necessary investment. Africa is still a predominantly agrarian economy now transitioning towards industrialization, hence the need for urbanization. But countries that have been able to blend economic progress with environmental, social and governance dynamism are facing extreme pressure on their resources and infrastructure – especially as climate change worsens.

When welfare gains from technological change and globalization are not widely shared and social mobility is impaired, it breaks down trust and civility in society and fosters the growth of crime, violence and disenfranchisement. In Western developed states, the welfare state was characterized by the growth in living standards as the norm, not the exception – and while it often did not tackle growing inequality and social divisions, it ensured legal recourse and protections, civic freedoms and promise of social mobility.

As Africa braces for technological advances, disruptions arising from climate shocks, geopolitical fragility and population transitions that will fundamentally transform the work and social landscape, African leaders need ensure public systems’ sustainability in order to continue to provide protection for large numbers of people. Governments everywhere are faced with difficult decisions. Social protection systems were designed around the idea of a single, full-time employment relationship; and according to a report published in 2018 by the Organisation for Economic Co-operation and Development, it is unclear how growing numbers of those who are self-employed or change jobs regularly fit into this standard framework.

A new World Bank report notes that sub-Saharan African (SSA) countries may benefit from digital technology adoption in different ways to other regions. The report is structured around three main issues that will shape the future of work in Africa, namely the human capital needs of a young and rapidly growing largely low-skilled labour force; the prevalence of informal workers and enterprises; and social protection policies to mitigate risks resulting from disruptions to labour markets.

Our expanding ability to automate human work across all sectors – agriculture, industry, and services – makes an ever-growing workforce increasingly irrelevant to improvements in human welfare. Conversely, automation makes it impossible to achieve full employment in countries still facing rapid population growth. Ethiopia is one of the African countries with the best policies and prospects, but even there it will be almost impossible to create jobs fast enough to absorb a working-age population projected to grow from 43 million in 2015 to 110 million in 2050. And Ethiopia’s prospects are far better than Niger’s, where the total population is projected to grow from 24 million today to 66 million by mid-century, and to 165 million by 2100.

Given Africa’s natural reserves, one would assume the wealth creation generated from extraction activities could be chanelled into welfare initiatives. But often the “resource curse”; has meant positive impacts on income but not on poverty reduction, as it benefited the non-poor rather than poor.

To create an agile and inclusive welfare state in Africa, the basic tenets come down to the provision of collective rights within the justice and legal infrastructure, and social protection systems. As per a recent report by Transparency International, there is a strong correlation between one’s loss of livelihood, social status, savings and even life with removal from collective shared space due to institutional corruption and legal loopholes that enable discrimination and exclusion, as well as lack of accessible information about land rights and processes. Policymakers should provide social protection by ensuring security of tenure, land justice, and targeted interventions to detect and prevent corruption over land.

When it comes to women’s tenure rights, even legal structures that recognize communal and collective land tenure systems may not be enough if they are not gender-sensitive. For example, in Ghana, focus groups aimed at exploring gender inequality in customary land tenure systems revealed that men, who own more than 90% of the land in the region, believe that women have rights because husbands must provide their wives with land to till. Women cannot inherit land and, if they leave it fallow, risk losing it altogether.

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To build an inclusive and agile welfare state in Africa, policymakers need to look at rights and notions embedded within social relationships in society. Landowner and tenant, men and women, leader and citizen, employer and employee, doctor and patient, etc. Not only does the importance of government arrangements have to be considered, but also the collective voice of stakeholders in terms of opportunity and accessibility. It may be difficult and complicated to achieve, but the viability and sustainability of a functional state lies in the valuable ecosystem services that equitable access to resources and opportunities can provide.

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Geographies in DepthGeo-Economics and Politics
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