Boosting Youth Employability

Examining the Ramifications of Not Opening New Public Posts

When the Ethiopian government announced its intention of not opening new posts in the civil service in the current fiscal year, the news shocked students and graduates. For many years, employment in the public sector has guaranteed a stable life. In a changing scenario now, public sector employment is no longer a guarantee for a decent income and regular life. In recent years, the salary and benefits of public sector employees have been minimal. At the same time, the working environment compromises professional freedom as more public sector roles have increasingly become political. That’s because successive governments used the civil service to reward their loyal supporters by offering employment.

For this reason, the civil service is already crowdedly staffed, many of whom need to be more skilled. It’s one of the reasons why the current government found it difficult to institute an efficient and corruption-free civil service. Like its predecessor, it, too, wanted to reward some of its loyal supporters by granting them employment in the earlier days of its ascendancy. However, due to a solid fiscal discipline needed to curb inflation, the government announced its intention of not opening any new posts last July. EBR’s Nejat Mohammed explores the ramifications of this policy.  

 In the first week of June, Ahmed Shide, Minister of Finance, appeared before parliament for the budget hearing of the current fiscal year. The budget for 2023/24 was published in a thick volume and distributed to members of the parliament (MP) for review. While scrutinising the budget, the MPs were surprised by the limited budget allocated for public sector employees’ salary adjustment. The MPs were curious why the budget didn’t significantly increase, especially as the post-war reconstruction and redevelopment required. The MPs needed clarification on why the recurrent budget didn’t increase substantially. The MPs asked why the government has not planned new employment to build the human resource gaps in various public institutions. They were perplexed about the hope and fate of the recent university graduates. “We will not employ new employees for next year.” The Minister had to respond to the MPs adamantly.

“Government isn’t a job creation machine.” Ahmed Shide, Minister of Finance, told MPs boldly. The private sector will lead job creation in the coming fiscal years. He stated his hope. The news about this policy decision sent a strong signal across the education system. The message was more influential, especially among university professors. The government’s decision is a dramatic shift from previous trends when the government was the country’s top employer. 

Ethiopia’s government is the country’s largest employer, employing over 20Pct of the workforce. The Ethiopian Civil Service Proclamation (2006) governs government employment, which ensures that public work is given based on merit and that all employees are treated equally. The choice not to offer positions is a significant one with far-reaching consequences. It is still too early to predict the full ramifications of this ruling. The decision, however, will undoubtedly have a considerable impact on new graduates, students, businesses, and the economy as a whole. 

Many Ethiopians believe working for the government is an excellent way to find a stable career. With fewer government jobs available now, recent graduates and students must find ways to work in the private sector or create their own firms. Some human resource experts warn that this could increase employment competition and reduce already meagre compensation packages. 

Government contracts and services are essential to many companies as business opportunities. That’s one of the ways the private sector creates jobs. Companies may have to discover new business opportunities to expand their businesses. This situation may result in higher prices for goods and services as some companies may have to revise prices to compensate lost firms with the government’s decision to cut spending. The policy of not creating government jobs may further negatively influence the overall economy. When the government generates jobs, it stimulates the economy. With fewer government jobs opening, less money will circulate, slowing the overall economic growth.

The decision received mixed reactions from government officials, new graduates, students, and even business owners. Some government officials have argued that the decision is necessary to reduce the government’s budget deficit. Others have argued that the decision will hurt the economy and make it more difficult for young people to find jobs.

New graduates and students primarily oppose the decision. They argue that it will make it more difficult for them to find jobs and start their careers. Students have also expressed concern that the decision will increase unemployment, leading to social unrest. According to Hayat Mohammed, a new graduate from Wolkite University, the government should reconsider the ruling.

“I firmly believe that the Ethiopian government should reconsider the decision of not creating new public posts in the new budget year. Doing so can unlock the potential of young graduates, stimulate economic growth, ensure long-term adaptability and invest in the nation’s human capital. As a new graduate, I can contribute to the government’s objectives and work towards a brighter future for Ethiopia.

Current university students share similar concerns. Melat Aschalew, a third-year Economics Student at Addis Ababa University, is one of them who aspires to find jobs upon graduation, 

“The Ethiopian government’s decision not to open new public positions in 2023/24 is undoubtedly concerning for students like me who aspire to secure employment after graduation. While I understand the need for fiscal responsibility, I must admit that I have some pessimistic concerns regarding the impact of this decision on our job prospects. However, I believe it is important to acknowledge these concerns and explore potential strategies to navigate this challenging situation.” she is also pessimistic about the decision, “while the decision may impact job prospects, I am optimistic about the future. By diversifying my career options, focusing on transferable skills, developing my networks, embracing lifelong learning skills, and seeking opportunities beyond the public sector, I believe that I will be able to find a decent job. I am moving in that direction.” Added Melat.

Another student who goes by Selam Demsew, a remedial student at Woldia University, acknowledges the challenges posed by the Ethiopian government’s decision not to create new posts in the year. She says, “Despite my pessimistic concerns, I am committed to proactively exploring alternative career paths, gaining practical skills and experiences, investing in continuous learning, and staying informed about potential changes. By adopting these strategies, I will strive to maximise my opportunities and navigate the job market successfully, despite the limited public post.”

Business owners are also concerned about the decision. The decision, as it would affect how students would engage in their current university education, might make it difficult for them to find qualified workers. Students’ commitment and morale to spend more time engaging in readings and practical skill development programmes might be affected. Such is expected, and the impact will be disincentivised students for hard work. Mohammed Ahmed, a private business owner, has this solution to offer.

“I would emphasise the importance of public-private partnerships. Collaboration between the government and private businesses to stimulate the economy and put the country in a growth trajectory, drive innovation to address some of the societal challenges such as unemployment. By engaging in dialogue, sharing resources, and leveraging each other’s strengths, we can collectively work to ameliorate the business climate that pushes the private sector into areas that don’t create more jobs. Public-private partnership is key towards achieving sustainable development and provision of decent jobs to citizens.”

“As a private business owner, I appreciate the government’s focus on fiscal discipline. However, I encourage the government to consider the potential impact on the private sector and take measures to create a conducive environment for entrepreneurs, investment, and collaboration. By fostering a strong partnership between the public and private sector, we can collectively contribute to the economic development and well-being of Ethiopia.” Added Mohammed. 

The choice must also be more stable with the government’s initiatives for job growth and employment prospects. As a reminder, the Ethiopian National Employment Policy and Strategy (NESP) was developed in 2018 to create an enabling environment for inclusive and sustainable job creation, with five pillars: Productive Employment, Inclusive Employment, Sustainable Employment, Employment-led Growth, and Employment-sensitive Social Protection. The NESP contains several specific aims, including creating 10 million jobs by 2025, lowering the unemployment rate to 15Pct by 2025, increasing women’s employment share to 40Pct by 2025, and increasing the percentage of youth in employment to 60Pct. According to reports shared in 2022, the Ethiopian unemployment rate for 2022 was 4.02%, a 0.09% increase from 2021.

The NESP has been implemented through several programmes and initiatives, including the Youth Employment Programme, which provides training and employment opportunities for young people; the Women’s Entrepreneurship Programme, which provides training and support to female entrepreneurs; the Productive Safety Net Programme, which offers social protection for the most vulnerable households; and the Industrial Parks Development Programme, which creates jobs in the manufacturing sector. 

Furthermore, the Ethiopian government established the Job Creation Commission (JCC) in 2018 to streamline job creation efforts and improve Ethiopians’ livelihoods. The JCC has coordinated and implemented the National Employment Policy and Strategy (NESP). In 2021, the JCC became a ministry with a seat in the Council of Ministers. It became the Ministry of Labour and Skills (MoLS), and Muferiat Kamil, an iron lady who served as speaker of the House of Peoples’ Representatives, the lower house of the Ethiopian Federal Parliamentary Assembly,  became the first minister, with job creation responsibilities given more emphasis and handled via a state minister portfolio.

The MoLS has several functions, including developing and implementing policies and programmes to create jobs, providing training and support to job seekers and employers, encouraging entrepreneurship and small business development schemes, collecting and analysing labour market data, and monitoring and evaluating NESP implementation. Inheriting the practice from JCC, the MoLS is collaborating with various partners, including the commercial sector, civil society organisations, and foreign organisations, to create jobs and enhance the lives of Ethiopians. It has frequently sent delegations to Middle Eastern countries to negotiate a safe working environment for Ethiopians overseas and increase salary and benefits packages. It also facilitated the creation of other types of jobs overseas. The Ministry has also announced its effort to explore opportunities for Ethiopians to work abroad in labour-intensive European markets such as Poland and Romania.

The Ethiopian government’s decision to refrain from creating new government jobs this year has sparked extensive discussions and deliberations on various employment opportunities. Travel agents have intensified campaigns on social media platforms like Facebook to advertise enticing prospects for overseas employment seekers, particularly in countries such as Canada, the USA, Poland, Romania, and the Czech Republic. These announcements often originate directly from companies based in those nations.

In the present circumstances, there is a notable inclination towards exploring virtual employment options overseas as individuals strive to find alternative avenues for work. Young men and women are actively discussing and responding to the government’s policy ruling on not having new public posts this year. One can see this trending development in LinkedIn posts where professional people’s engagement is more pronounced. 

The MoLS is involved in several specific programmes and initiatives, including the Youth Employment Programme, which provides training and employment opportunities for young people; the Women’s Entrepreneurship Programme, which provides training and support to female entrepreneurs; the Productive Safety Net Programme, which offers social protection for the most vulnerable households, and the Industrial Parks Development Programme, which creates jobs in the manufacturing sector. The MoLS is essential in Ethiopia’s efforts to create jobs and enhance people’s lives. It collaborates with other partners to execute the NESP and create a more conducive climate for employment creation. 

Despite all these concerted efforts, some anticipate the decision by the government not to open new posts or fill existing vacant positions in this fiscal year will have significant implications for recent graduates, current students, even the private sector, and the overall economy. It may lead to increased competition for limited job opportunities that the private sector may create, leading to lower employee compensation. The consequence could also grow to social unrest as the living cost is already unbearable to most citizens. In this situation, no job or income means salt to the wounds.  

While unemployment is a big issue for the youth, the lack of skilled labour is a big challenge for the underperformances in many private and public enterprises. Each year, when ministries report to MPs about six or nine months’ performances of their agency, one factor they attribute to challenging their performance is the lack of skilled labour. The private sector, from manufacturing to services such as hospitality, also put the need for more professional human resources as the number one challenge for failing to meet targets and deliver as per their potential. 

Indeed, finding skilled labour has proven to be the most daunting task for many private operators; some multinational companies even bring employees from Kenya, South Africa, India, Nigeria and other countries to fill the gap. Those companies that cannot do so sometimes leave the positions open until candidates they believe are suitable come in either through recommendations or agency. That is why human resource experts argue that solving unemployment goes far beyond opening jobs; it requires an end-to-end solution where fixing the broken education system is the key driver of creating a competent labour force, including genius job creators, innovators and problem solvers. It also requires streamlining all the state machinery and cutting the bureaucratic hustles of the chain. It requires putting all the policies and institutional arrangements in place to guarantee and incentivise investments for their contributions to provide citizens with decent jobs.

That’s why strategies for navigating a limited job market should include exploring the challenges of the private sector and addressing them effectively. Developing an education system that allows students to gain transferable skills is also essential. Furthermore, encouraging and incentivising entrepreneurs, embedding solid internship and volunteer programmes in education which leverage online platforms and advancing freelancing opportunities are crucial. Enhancing online presence, seeking career counselling, and staying informed and flexible increases youth employability.

11th Year • October 2023 • No. 122 EBR