Unemployment A Pertinent Economic Itch

There seems to be a divergence of thoughts about the causes of unemployment in Ethiopia. Whereas some people, such as the deans of public universities, attribute it to a lack of business development skills, others attribute it to the undeveloped absorption capacity of the nation’s economy. If one has to go by the science of economics, however, the former argument seems to hold little water.

It was only recently that I saw the presidents of some public universities and graduating students being interviewed by the state-owned media. The interview focused on what the universities provide the graduating students, in terms of finding employment opportunities.

These leaders of higher education institutes had almost identical replies. They said that they have been able to arrange a four-day workshop on the basics of entrepreneurship, preparation of business plans, allocation of capital layouts, the importance of attitudinal preparedness to do any kind of work, including the laying of cobble stones, and making attempts to save money for advanced investment innovative efforts.

The graduates too expressed their preference for self-employment and being the master of their own fate. The journalist was riding in the same wagon. He didn’t mention the real issue at stake, at least in the eyes of parents, who had recovered quickly from the hangover of the festive celebrations.

The presidents who provided orientations in business planning did not touch on the role of a university to educate or train students. A focus that could quench the manpower requirement for the country’s Growth & Transformation Plan (GTP).

The government officials have time and again talked about the country’s abundant human resources. Unless education is pursued simply for the sake of accumulating knowledge as a philosophical objective, it is believed that a protracted plan of study should have objectives. These include filling in and serving the requirements of the country.

The National Planning Commission and the other stakeholders are supposed to plan the allocation of resources, including manpower, to bring about ways and means of realising rapid economic growth. We should consider that when a country invests a lot of money on every student, who may take 13 to 15 years before he gets his diploma or degree, the objective is too evident to miss. It is a hard theory to swallow that both graduating students and education officials believe that it is up to the students to create jobs and try to make ends meet.

It would indeed be a very interesting concept to entertain such an entrepreneurial approach if the universities themselves had, in conjunction with the National Planning Commission, earlier conducted market research and made the findings available for the graduating students. But, in the absence of such information, it is similar to reducing the problem to the level of fly bites.

In an economy where the aspiration is to embark on industrialisation from one of the lowest levels in Africa, it is incomprehensible to have attained a level where graduating students should be left to their own devices to find employment opportunities.

During the last two years alone, hundreds of thousands of students have graduated from all the universities across the country. This number should only be peanuts considering the requirements of skilled or trained manpower at this stage of development.

Where will this trend lead us in the coming years?

A country that is supposed to grow at 11pc annually, we would have thought, would have been able to absorb more than one percent of its population.

University officials and other sector office holders present their annual budget requirements for both capital and recurrent outlays. It is assumed that the honorable members of Parliament ask the convened official about their capital investment plans and the justification in terms of growth and development.

Industrial development has a number of implications. Among other things, it elevates a vast number of employment opportunities, as it involves the creation of backward and forward linkages. One industry has a multiplier effect of not only saving foreign currency because of its substitution effect, but also as a result of fetching foreign exchange from market opportunities in exportation.

There is a general trend these days of graduates investing in the business of raising chickens or indulging in dairy farming. The personal experiences of some entrepreneurs reveal that hard work and perseverance pays off in a relatively short period of time.

But, this does not remove the requirement of conducting some kind of market research that would assess the cost and benefit comparisons of various initiatives. This should take into account such important factors as opportunities of employment, capital recovery period, risks involved, environmental impacts and economic advantages. But this is only a small scale engagement. Hundreds of thousands of graduates call for more sophisticated undertakings.

I think that, at this stage of development, education in this country ought to be an instrument for solving problems. The managers of our public universities should, therefore, take up the question as to why it is a problem to find employment opportunities in this country at a time where little has been achieved so far.

Instead of giving orientation on how to draw up business plans, it would to be far better to work out an integrated growth strategy that identifies the requirements for specific fields of study. They could then arrange solutions in collaboration with possible stakeholders.

By Girma Feyissa

Published on August 25, 2013 [ Vol 14 ,No 695]



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