World Bank warns of jobs crisis as 1.2 billion young people enter working age

World Bank warns of jobs crisis as 1.2 billion young people enter working age

According to the World Bank, the widening gap between new labour market entrants and available opportunities threatens efforts to reduce poverty, particularly in regions where economic growth is too weak to absorb expanding workforces.

More than 1.2 billion young people in developing countries are expected to reach working age over the next 10 to 15 years.

However, only 420 million jobs are projected to be available, raising fears of a deepening employment crisis.

According to the World Bank, the widening gap between new labour market entrants and available opportunities threatens efforts to reduce poverty, particularly in regions where economic growth is too weak to absorb expanding workforces.

The challenge is particularly acute in Sub-Saharan Africa, where up to 12 million young people enter the labour market annually, yet only about three million wage-paying jobs are created.

South Asia faces similar pressure, with 16 million people seeking employment each year and approximately six million failing to find work.

The jobs crunch comes as global progress in reducing poverty has slowed, with sluggish economic growth, high debt levels, conflicts and climate-related shocks undermining household incomes.

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More than 800 million people worldwide live on less than $3 (Sh390) a day, while about 3.7 billion people, nearly half the global population, survive on less than $8.30 (Sh1,078) daily.

The World Bank says addressing the employment challenge will require more than financing businesses, pointing to investments in electricity, roads, healthcare and education as essential foundations for productive economies.

In Sub-Saharan Africa, nearly 600 million people still lack access to electricity, limiting the capacity of businesses to expand production, create jobs and compete effectively.

To address this, the World Bank Group and African Development Bank are implementing Mission 300, an initiative targeting electricity connections for 300 million people across the region by 2030. 

More than 64 million people have gained access since its launch, according to the bank.

Private businesses will also be central to closing the employment gap.

The World Bank estimates that the private sector accounts for nine out of every 10 jobs in developing economies.

“Today’s workforce must be prepared for the jobs of tomorrow,” the World Bank said, highlighting the need to equip job seekers with marketable skills.

Notably, the bank is working with low-income countries through the International Development Association to strengthen skills development, while the International Finance Corporation is supporting African creative businesses through initiatives designed to improve access to technical assistance and investment.

However, the lender says sustained job creation will also depend on predictable regulations, reliable contract enforcement and a business environment that allows firms to start, hire and grow.