FEATURE STORY

Gabon’s Unemployment Conundrum: Why Economic Growth is not Leading to More Jobs

March 31, 2015


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STORY HIGHLIGHTS
  • A World Bank Group report reveals that despite sustained economic growth, Gabon has been unable to generate enough jobs.
  • Gabon’s unemployment rate is four times higher than the average for middle-income countries.
  • Through technical and financial assistance, the World Bank is helping Gabon diversify its economy and boost vocational training.

LIBREVILLE, March 31, 2015 — Over the recent years, Gabon has experienced sustained economic growth and has boasted an upper-middle-income country status. However statistics indicate that despite this promising growth, a worrisome unemployment trend has one in every five Gabonese out of a job. Youth in Gabon are even more affected with one in every three young people currently unemployed.

What explains this conundrum between unemployment and growth? A recent World Bank report on Gabon hones in on the reasons why economic growth has thus far generated few jobs. The study also proposes recommendations to help officials address the challenge of unemployment.

Key findings of the report show that formal employment in Gabon declined steadily between 1986 and 2010, and one in every five members of the labor force is now unemployed.  Young people, women, and the highly educated are particularly affected. The unemployment rate is 35.7% for young people between the ages of 15 and 24, and 26% for the labor force aged 25 to 34. It is twice as high for women as for men. Close to one quarter of the labor force with a secondary school education is unemployed; proof that a diploma provides no protection against unemployment.

An oil industry that creates too few jobs 

The oil industry is the country’s leading source of growth.  However, it is anything but labor-intensive. The report reveals that the oil industry alone accounts for more than 40% of national value added and more than 60% of government revenue, yet its total workforce amounts to less than 5% of formal employment.  The report also notes that the education system is not attuned to labor market needs, and young graduates lack the skills sought by businesses.  Despite a net enrollment rate of 92%, the grade repetition rate in Gabon is 37%, one of the world’s highest.

Lacking the opportunity to acquire basic knowledge, a large proportion of young Gabonese are also unable to acquire vocational skills and are thus excluded from the labor market, the report finds.  “The main factors underlying the poor match between the training of young people and the demand expressed by the productive sector are the low quality of the basic education system, the insufficient output of technical and vocational training, and a lack of resources and effectiveness in the education sector,” explains Rick Tsouck Ibounde, World Bank economist and lead author of the report.

Furthermore, the business climate is not conducive to investments that could create jobs in Gabon. Rigid labor laws tend to hinder new hiring, while protecting those who have a job. In order to attract investments and boost employment prospects, Gabon will need to improve the business climate and the institutional mechanisms of support for private sector development.

One recommendation put forth by the report to address these issues is the development of partnerships between the government and the private sector to improve the quality of the education system and bring it more in line with current market needs.  The report also suggests creating vocational and technical education tracks.

Reforms adopted in 2010 in the education and research system are already underway and represent a step towards developing in-service training and encouraging public-private partnerships (PPPs). For example, the Petroleum and Gas Institute (IPG), located in Port Gentil and supported by the Gabonese Government and the oil industry, has been training engineers specialized in oil-related technical areas since January 2014.  The World Bank report also advocates for an expanded system of training that alternates with apprenticeships; a highly-regarded training model used in countries such as Germany.

To learn more about the recommendations set forth in this study, consult the full report




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