- Says only 400m jobs for 1.2bn young people entering labour market
- Blames conflicts, debt burdens, high costs
From Uche Usim, Bangkok, Thailand
From the World Bank Group President, Ajay Banga, comes a startling revelation that the global economy faces a huge jobs crisis, with 1.2 billion young people expected to enter the labour market over the next 10 to 15 years when only about 400 million jobs are projected to be available.
Banga said the widening gap posed a major challenge to developing economies, including Nigeria and other African countries, stressing the need for governments to attract private investments and make better use of limited public funds to create jobs.
He spoke in a speech prepared for delivery to finance ministers and world leaders at the main plenary of the World Bank Group and International Monetary Fund Annual Meetings in Bangkok, Thailand, on Friday.
According to him, limited government finances and high costs of essential commodities, including energy and fertiliser, have made the task of creating jobs more difficult.
He said the challenges required countries to find ways to stretch available resources while supporting job creation on a large scale.
“Over the next 10 to 15 years, 1.2 billion young people will arrive at a job market projected to offer only about 400 million jobs,” Banga said.
He emphasised that the choices made today would help determine the future of the coming generation.
He pointed out that jobs were more than economic figures, describing them as a source of dignity and a means for young people to build better lives.
“A job is not a statistic. A job is dignity,” he said.
The World Bank president warned that failure to provide opportunities for young people could have consequences beyond national borders, while successful job creation would bring wider economic and social benefits.
For Nigeria and other African countries with large youth populations, the projected jobs gap highlights the need to expand investment, strengthen businesses and create more opportunities for young people entering the workforce.
Banga said the World Bank Group was working towards a development model that combines public funding, private investment, philanthropy and technology to help countries meet their individual needs.
He explained that public and concessional financing would remain important in countries where investment risks were high and markets were not yet strong enough to attract sufficient private capital.
However, as economies developed, private investment and access to financial markets should play a greater role in funding projects and supporting growth.
“The partnership and mix should evolve as countries do,” he said, adding that the ultimate goal was to help countries become strong enough to sustain their own development.
Banga also highlighted an increase in private capital mobilised by the World Bank Group, which rose from about $35 billion in the 2022 financial year to $112 billion last year.
He described the increase as a threefold rise, noting that total financing, including the institution’s own funding, exceeded $230 billion.
He said private capital mobilisation had nearly tripled in lower-middle-income countries, quadrupled in upper-middle-income countries and more than doubled across Africa.
The figures, he said, showed the potential of using development finance to attract more private investors to projects that create jobs and support economic growth.
Banga further disclosed that six multilateral development banks were working to establish common methods for assessing, documenting, packaging and transferring investments.
The initiative is designed to make it easier for other investors to take over projects initially supported by development banks, freeing up funds for new investments.
He said the approach could help create a new asset class focused on development investments in emerging markets, allowing development banks to support more projects without relying solely on the size of their balance sheets.
According to him, the future of development financing will depend on using public funds where private investors are unwilling to take risks, deploying private capital where it can expand businesses and jobs, and using philanthropy to support new ideas and early-stage projects.
Technology, he added, should also help countries achieve more with every dollar invested.
Banga said the World Bank Group had begun demonstrating what the approach could achieve but stressed that efforts must now be expanded and accelerated to meet the expectations of the next generation.
“The jobs gap is a projection. It does not have to be our future,” he noted.