Labour Market Assessment for youth empowerment for successful transition to decent work in Amhara and Somali regions of Ethiopia. TENTAM/ Save the Children/EU. 2019

Executive Summary

This section attempts to capture the key issues: methodology, findings, conclusions and recommendations of

the Labour Market Assessment (LMA) carried out in Waghimra Zone and Sitti Zone of Amhara and Somali

National regional States respectively. The youth in Ethiopia, those aged from 15 to 29 years, constitute about

29% of the population. Young people in Ethiopia are confronted with many difficulties when it comes to their

integration in the labour markets and their research for decent and productive jobs. Thus this LMA which

focuses exclusively on wage employment opportunities was conducted with the aim to provide practical

recommendations and inform the action of the project, which aims to enable and prepare vulnerable

unemployed and underemployed youth living in Sitti and Waghimra Zones to pro-actively position

themselves for employment to transition to decent work opportunities. The LMA thus focuses on labour

needs, youth capacities and needs, organizational features of the job market, governance of the job market

and factors influencing the job market as well as youth perception assessment and private sector mapping,

as these have a bearing on the employment and employability of youth.

The LMA is undertaken in two starkly different Livelihood Zones; however, both Zones are marked by severe

food insecurity. Much of the qualitative discussion reinforced the increasingly obvious fact that the carrying

and economic capacity of rural areas to meet the expectations and needs of rural youth is becoming more

and more inadequate. On the positive side, both Zones are found in close proximity to the economic

development corridors of the country: Waghimra is close to the Woldiya-Dessie-Kombolcha corridor and is

also close to Bahir Dar and Mekelle towns (which are both an industrial and service hubs in their own) while

Sitti Zone is found in close proximity to Dire Dawa (the Eastern industrial and service hub of Ethiopia) and

lies along the Addis Ababa-Dire Dawa-Djibouti corridor which is a transport and economic life line of

Ethiopia especially in terms of import and export. Both Zones are currently benefiting from the respective

economic geography in terms of wage employment opportunities. Big infrastructure projects and the

Industrial Parks being built in Dire Dawa, Mekelle, Bahir Dar and Kombolcha including their trickle down

effects also provide huge employment opportunities. Ethiopia’s economic development has been spurred,

over the last nearly 15 years, by significant growth in the construction sector amongst others. And this was

largely financed by external borrowing (36% of GDP) and internal borrowing (Public debt), which has

reached 60.2% of the GDP in 2017 estimate (Theodora.com, 2018). As the chances of this borrowing to

continue are less likely as is currently observed, this will have its own impact on wage employment in the

construction sector going forward unless the government strikes a Public Private Partnership (PPP) for

building new infrastructures especially in the energy sector.

The LMA indicated that the economically active (engaged in income generating activities, either from wage

or self-employment, during the last 7 days) and inactive (those who are job seekers, jobless/home makers,

students, disabled people etc, who were not involved in activities that generate income during the same

reference period) segments of the labour force in the study Woredas was 17.5% and 82.5% of the total

population in surveyed HHs, respectively. The corresponding figures were 16.7% and 83.3% for Waghimra;

and 18% and 82% for Sitti Zone. The figures clearly indicate the high degree of unemployment &

underemployment, which is above 80%, prevalent in the study areas.

In terms of labour needs in the study Woredas, the government is the major employer followed by the small

private sector operators. For instance, the major private wage employer in Waghimra Zone is the Lalibela-

Sekota road construction Sector/contractor, Private Building Construction Sector/activities in Sekota town;

and the Erer Commercial Farm and Private Farms in Erer in Sitti Zone. The opportunities created by the

small service sectors in both Zones are far more limited as the business is run, mostly, as a family business.

It is very obvious thus that the surveyed towns represent a typical rural setting and wage employment is by

no means the predominant mode of employment; on the other hand, those who had gotten wage

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employment in other locations but are from the study Woredas are difficult to trace. Nonetheless, seasonal

migration in Waghimra is found to be a predominant alternative source of livelihood and income while

migration to the Middle East is a common alternative livelihood for youth in Sitti Zone.

The Labour Market Assessment (LMA) has indicated that low levels of literacy/high rates of illiteracy, limited

skill sets/skill gaps in youth, and very much limited wage employment opportunities are the major reasons for

low wage employment in rural areas. The Consulting Team (CT) has not found that severe limitations of

access to finance & financial services is a major constraint to wage employment as would have been the

case for self-employment.

One major consequence of the lack of local wage employment opportunities has been internal seasonal

immigration (Waghimra Zone) to known migration destinations in the different parts of the country (Alamata,

Kobo, Woldiya, Dessie, Kombolcha, Afar, Debre Berhan and Gojjam); and migration (Sitti Zone) mainly to

the middle-east but also to Western Europe via Sudan and Libya. Both types of migration would benefit the

youth if supported and facilitated in the former and legalized in the latter so that the net benefits outweigh the

costs of migration. This was strongly suggested by the qualitative research participants. Moreover, there are

attempts by the TVED in Waghimra to facilitate and organize farm labour to Yayu Farm in Gojjam (upon

request by the latter) and these are good beginnings; however, the CT suggests that relevant GO partners

and SC should work together and lay the foundation for facilitating annual labour mobility by forecasting

labour demand(by proactively engaging) in different destinations (including youth in Sitti Zone who could

participate in wage labour in Erer Farm) and providing all auxiliary support to immigrants including transport,

basic financial and literacy training, and negotiations with local authorities in destination areas to ensure

security of the migrants. On the other hand, concerted efforts should be put in place to minimize illegal

migration by young people in Sitti Zone to the middle-east and other locations. In fact, supporting legal

mechanisms of migration will have more profound benefits to the youth and their families/parents.

While migration is mostly viewed as a coping strategy or a means of livelihood, the Focus Group Discussion

(FGD) indicated that most youth who are unemployed or underemployed simply wander around and engage

in socializing with other jobless friends. More worse, qualitative consultations clearly revealed that youth who

are underemployed /unemployed have exhibited undesired and negative social behaviours. Far worse,

employers in Sekota, Kombolcha and Dessie as well as TVET teachers, and GO and IPDC staff in

Kombolcha has indicated that working youth do exhibit low levels of commitment, addictive behaviour, and

lack vision.

The field work has clearly indicated that the labour market demands different combinations of skills sets. The

TVETs have the aim of equipping the youth with general technical skills in a certain field. Some of the issues

that have emerged from an analysis of skills in demand and supply vis-a-vis the TVETs are: TVETs have the

primary aim of equipping trainees with technical skills and do not sufficiently focus and provide the soft skills;

TVET training has to be aligned with skills in demand in the market and spatially tailored given the local

economic context as opposed to implementing/operationalising a top down training target as indicated by

one TVED official- for instance, in Kombolcha IPDC, the desire is to have more specialised skills while in

Sitti, some manufacturing sector employers required trainees with general technical skills as well as

managerial skills & workplace code of conduct; TVETs aim trainees to be self-employed and do provide

project based trainings and these are reported to lack depth and breadth mainly in the technical trainings

provided; and TVETs are not necessarily accessible (only Sekota and Hadi Gala have TVETs) to rural youth

because of the cost implication: cost of food & accommodation, travel, training materials, and miscellaneous

costs that would be incurred if trainees want to access TVETs where they exist.

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Wages received by the youth for professional jobs in the government sector in both locations are in

accordance with the Civil Service Regulations mostly ranging between ETB 2,500 to 5,000/month while

youth in Private Sector like Banks earned slightly higher salaries and benefits. In both Zones, some youth

are employed in NGOs and Private Sectors and expressed better pay albeit severe competition in both type

of employers, and shorter contracts/uncertainty in the case of NGOs. Wage rates reflect the supply and

demand for labour and some other variables in the local economic context. Thus there are different daily

wage rates in Sitti (about 70 birr/day) and Waghimra (about 40 birr/day) for labourers; however, in their

migration destinations, youth from Waghimra explained they earn as much as 150 birr/day while in Erer

private farms, labourers could get as much as 80 birr/day.

In the IPDCs, which are presumed to be the largest employers, the wage rates are found to be very low for

those working in the manufacturing sheds. Female/women youth constitute about 90% of the workforce in

the IPDCs visited (Mekelle and Kombolcha) and the average wage is reported to be a gross salary ranging

between ETB 850 and 1000 per month. Thus obviously this scheme traps women into low paying jobs! In

Kombolcha, the IPDC officials have reported two mass complaints of an industrial scale that were somehow

handled by the IPDC. Employed youth have complained about wage rates in the different sectors and

Employers on the other hand have reflected the youth are simply having huge expectations. That said,

businesses have generally been negatively affected over the last three years and this may have its overall

impact.

In terms of organizational features of the wage market, occupational safety, hazards, abuse etc are issues

that are normally present in industrial hubs of the country. The FGD and KII discussions the CT undertook as

such have not revealed any issue worthy of notice in this regard. However, MoLSA needs to have the

capacity to undertake awareness and enforcement of different standards as well as handling abuse when

reported or discovered or put in place mechanisms to detect the same. MoLSA in both Zones seems to have

weaker capacity compared to those in the Bigger Towns like Dire Dawa, Kombolcha and Dessie. These

latter ones have better awareness and supervision and monitoring mechanisms/structures.

The governance mechanisms and structures of the job market in this less industrialized part of the Country

have not exhibited any particular feature except that in the absence of the Labour Courts, it is the MoLSA

which is handling anecdotal labour disputes that were reported to the CT to exist in this less industrialized

part of the country. Both Zones seem to pay less emphasis for these issues and this may be due to the low

level of manufacturing in these locations.

Understanding regarding who is youth or not, determined by the age bracket, varies even amongst youth

groups and less so by educated adults especially in the government office. The FGD & KII with adults and

youth revealed that the youth are regarded as useful to society and their country. Likewise, the FGD

conducted with employed and unemployed youth in both age categories have yielded different wishes and

aspirations albeit challenges to realize their dreams. Search for and achieving a better livelihood, continuing

education to become a professional (students), pursuing education to stand out from the competition

(Bankers), become a performer in the work they do (youth in government office as well as Banks) and

improved livelihoods through regular investment of finance gained from migratory wage employment

(Waghimra) are some of the commonest wishes and aspirations of youth. There are obviously gender

variations as mostly women youth have other responsibilities and their options for wage employment are also

relatively limited. In some instances, youth have been seen to support the realization of dreams and

aspirations of their younger fellow become true by serving as voluntary teachers during summer. Thus every

effort should be made to ensure youth wishes and aspirations are reasonably achieved as indicated in the

conclusion and recommendation sections of this report.

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It was found out that the attitude of the youth towards wage employment varied by age group, occupation

and gender. Young boys and girls are clear in their minds regarding their future vision of becoming

professionals in this and that. Unemployed skilled youth are eager to get wage employment opportunity and

underlined its importance for their livelihood. Most employed youth graduates, whom the CT discussed with,

would like to leave their government job while those in the Private Sector (especially in Banks) have a

positive view about wage employment. Perhaps the huge numbers of youth who are engaged in selfemployment

via the government credit programme may be alluring/attracting those in the government job to

aim for and target self-employment as their vision.

In terms of socially determined segregation of work by gender, the CT has found that young women are

trapped into low paying jobs in the Industrial Parks; for instance, about 90% of the workers in the IPDCs are

women; while women are also found to have less mobility and chances of pursuing education, they are thus

technically excluded from pursuing their dreams. Put differently, despite women wanting to move in search of

seasonal and permanent wage jobs, their mobility is curtailed by their security risks and social status and

roles: they may have to cater for children and the house; there are chances of sexual violence and abuse as

well as overall security risks involved in their mobility away from their home and especially to distant

locations; and society in general prefers marriage for the uneducated than allowing them pursue other

options. Lack of or limited opportunities for employment for female youth in Sitti has meant that women have

to migrate to the middle-east with all its pros and cons.

Wage markets in the study area are affected by many factors both from the supply side and the demand

side. The supply side constraints include: gaps in skills sets, information asymmetry, lack of job

orientation, lack of job matching services, lack of soft and other skills like team work, problem

solving, and managerial skills that could be gotten from integrated youth service centres are the major

ones. The Demand side limitations mainly include low labour absorption capacity of the local economies,

distance and transaction costs incurred while searching jobs, lack of finance and access to finance to kick

start the search for jobs in other locations, and employers may not necessarily make job announcements

public and visible forcing youth to rely on networks of information etc.

Based on the above analysis and presentation of findings, a number of recommendations have been made

to each study area. Some of these are:

· Establishing/strengthening Integrated Youth Service Centre (IYSC); mobilise youth graduates

for voluntary service to support students;

· Enhancing women’s participation into the workforce;

· Institutionalizing Job matching mechanism and structures;

· Job fairs and youth events regionally and locally;

· Advocate for establishing/strengthening an Institution that utterly caters for youth employment;

involve inspirational speakers and recruiters in events and TVETs;

· Install Public Information Notice Boards, and create awareness of employers and job seekers

to use such notice boards;

· Arrange training in life skill, soft skills and key primary managerial skills for the youth;

complementarily with other programs (RESET II, Other EC and Donor funded programs);

aligning and strengthening TVETs and Polytechnic Colleges;

· Support Brokers/Institutes for formalizing their work as well as enhancing legal migration to

the Middle East. This means that the youth, specially (female), need to attend special training

(e.g. food preparation and housekeeping) before applying for jobs outside the country;

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· Attracting investment in the attractive & potential sectors; and aligning the programme and the

expectations of it.

· Facilitate consultation workshop with Government and private sector employers (at least) for a

half or full day in order to identify (validate the findings of this assessment) their interest in

employment opportunities/needs for fulltime, part-time jobs and apprenticeship programmes;

use such workshops as an opportunity to reach a common understanding on roles and

responsibilities among different actors.

· Through coordination with (TVET polytechnic colleges), the project can look for host

organisations for selected TVET students from intervention Woredas. In addition, it can also

allocate pocket money for economically poor students during the apprenticeship period.