Full Employment & Decent Work:
Sub-Saharan Africa
Yaw Nyarko
New York University
Oct 3rd, 2007
Some Ideas
I. Education
II. Migration and the Brain Drain
III. Knowledge Economy
IV. Pro-Growth Policies?
V. Capital/FDI?
VI. Micro-Credit?
Education Is Key
• Africans already understand the key role of Education
• Rapid recent expansion: 1.5 million students in 1980 to
3.8 million in 1995
• Six universities in Sub-Saharan Africa in 1960 to more
than 120 now.
Education Is Key
• Africans already understand the key role of Education
• Rapid recent expansion: 1.5 million students in 1980 to
3.8 million in 1995
• Six universities in Sub-Saharan Africa in 1960 to more
than 120 now.
Fraction of government spending on education
United States
10.5%
United Kingdom
11.5%
South Africa
18.1%
Ghana
24.3%
Botswana
25.6%
Togo
26.4%
• Education Levels still low comparatively in
Africa, especially in comparison to
comparison nations in Asia.
Africa’s Private Universities
Rapid Recent Increase in for and not for profit private
Universities.
In Sub-Saharan African countries the number of private
institutions grew from 30 in 1990 to more than 85 in
1999.
Main countries where increase took place: Kenya (21),
Tanzania (14), Ghana (12), Uganda (11)
Many specialize in ICT
How do we encourage this growth?
Primary, Secondary or Tertiary Education?
Psacharopoulos (1995) , Bill Saint, World Bank and others.
Quality of Education
Quality of Education
• 1000 students in a Lecture Hall
Quality of Education
• 1000 students in a Lecture Hall
• Computer Science depts with no
computers.
Quality of Education
• 1000 students in a Lecture Hall
• Computer Science depts with no
computers.
• Science High Schools with no computers
and no internet
Quality of Education
• 1000 students in a Lecture Hall
• Computer Science depts with no
computers.
• Science High Schools with no computers
and no internet
• Private Universities with vocational level IT
classes
Quality of Education
• 1000 students in a Lecture Hall
• Computer Science depts with no
computers.
• Science High Schools with no computers
and no internet
• Private Universities with vocational level IT
classes
• No electricity to run computer
Quality of Education
• 1000 students in a Lecture Hall
• Computer Science depts with no
computers.
• Science High Schools with no computers
and no internet
• Private Universities with vocational level IT
classes
• No electricity to run computers
• Chew, Pour, Pass, Forget.
Some Ideas
I. Education
II. Migration and the Brain Drain
III. Knowledge Economy
IV. Pro-Growth Policies?
V. Capital/FDI?
VI. Micro-Credit?
Migration
Skilled Migration or the Brain Drain
• Carrington-Detragiache (1998); Docquier
and Marfouk
• Africans to the US are among the highest
educated of immigrant groups
Table: Skilled migration rates
for selected African countries
Country
Rate of emigration
Cape Verde
67.50%
Gambia
63.30%
Seychelles
55.90%
Mauritius
56.20%
Sierra Leone
52.50%
Ghana
46.90%
Mozambique
45.10%
Kenya
38.40%
Uganda
35.60%
ANgola
33.00%
Somalia
32.70%
Skilled migration rates
for selected countries
China
3.80%
India
4.30%
• The Cost of Producing Brains
•
∙ Hinchliffe, K (1987) using data for 1979 1984, shows unit costs of tertiary education as a
multiple of per capita GNP as averaging 8.6 for
Africa, with highs of 30 for Tanzania, 13 for
Upper Volta and Zimbabwe, 14.2 and 6 for
Ghana. The averages for Asia, Latin America
and the developed countries are 1.2, 0.9 and 0.5
respectively.
Our numbers: UNDP (2004) Human Development Report, World Development Indicators and UNESCO (2005).
Country
1979-1984
Botswana
2000
7
1.02
Chad
-
4.21
Congo
-
1.96
Gabon
-
1.59
Ghana
5.7
1.78
Lesotho
14.2
7.5
Malawi
15.9
Mali
-
-
2.32
Niger
5.4
2.91
Rwanda
14
5.69
Swaziland
3.2
2.65
Tanzania
30.9
Togo
-
6.3
2.42
Upper Volta
13.2
-
Zimbawe
12.7
-
8.6
-
Asia
1.18
-
Latin America
0.88
-
Developed Countries
0.49
-
Africa
Remittances
Remittances
• ∙ Slow Rising Houses
• ∙ Gated Communities
• ∙ Remittances ∙ Example with Ghana:
$1bn estimate by Bank of Ghana makes
this 10% of GDP and bigger than total aid
flows of $650M, and largest foreign
exchange earner. Official Stats $44M.
• ∙ Example set by Mexico.
Easterly and Nyarko (2007)
• Y = f(Roads, Education) = f(G-e,(1-d)ψ)
• Payoffs:
w - R who are educated and drain;
cy who are educated and stay
y
receive no education
• Utility of Young:
• ψd(W-R) + ψ(1-d)cy + (1-ψ)y
• Utility of Old: y + ψdR
Rough Calculation
(Ghana)
•
•
•
•
Cost of one E is 6 units GDP per capita?
X is annual remittance per capita
20X is present value at 5%
Set 20X=6 so X=6/20=0.3 or $150
• Average Remittance?
$44million /100,000 = $440
Incentives to Form Human Capital
(Oded Stark (2003) et. Al, and
Easterly and Nyarko (2006).
Brain Circulation
• Private Universities – Ashesi
• Investment Banks – Databank
• Academic Exchanges – NYU in Ghana
• Return Rate of 50% of Ph.D.’s
(SSRC Study)
migration rates in 1990 and average growth
1990-2003 for 50 African countries
average per capita growth
(annual %) 1990-2003
20.00
15.00
10.00
5.00
0.00
0.00
-5.00
0.10
0.20
0.30
0.40
0.50
-10.00
teriary migration rate 1990
source: migration rates Docquier, Marfouk (2004); growth rates WDI
0.60
Some Ideas
I. Education
II. Migration and the Brain Drain
III. Knowledge Economy
IV. Pro-Growth Policies?
V. Capital/FDI?
VI. Micro-Credit?
The Knowledge Economy
My Favorite Examples
• NYC Parking Tickets processed in Ghana
• US East Coast Webcams monitored in
Cape Verde
• Call Centers (KenCall in Kenya???)
• Phone Cards business -Ashesi Disabled
student;
• Nollywood
Is KE an African Engine of Growth?
• Entrepreneurial Spirit
The Local Markets and haggling
Migration Efforts
“Garage Industries” Image.
Tetteh Quarshie
• Love of Education
Is KE an African Engine of Growth?
CONCERNS
•
•
•
•
•
Education is key.
Diaspora and Brain circulation
Physical Infrastructure
Financial Infrastructure
Competitive Landscape
Brain Circulation
• "Look at India, the Diaspora made it
happen.”
•
Source: Comment found on a web page.
CHINDIA
INDIA
* More Indians given Ph.D.s in Engineering
in US than Americans in US?
CHINA:
• 400,000 Chinese students have gone
abroad since China's opening to the world
in 1978 .
• Engine for both IT sector and Education
reform
The African Brain Drain/Circulation
• 406 doctorates in science and engineering
awarded to African citizens in the US in 2005
and 3646 accumulated during 1996-2005
The African Brain Drain/Circulation
• 406 doctorates in science and engineering
awarded to African citizens in the US in 2005
and 3646 accumulated during 1996-2005
Country/Region
Year 2005
Total 1996-2005
Africa
406
3,646
China
3,448
26,166
Korea
1,170
9,130
India
1,103
9,684
442
6,874
Taiwan
The Competitive Landscape
•
The Competition is Intense (Chindia,
BRIC, Eastern Bloc, rest of Asia)…
•
i.
ii.
iii.
However …
The World is Flat
The Landscape will Change
Preparing for the Next Technologies
Strategies for the African KE?
Strategies for the African KE?
• Low Hanging Fruit
Cape Verde Webcams; KenCall;
Nollywood.
Strategies for the African KE?
• Low Hanging Fruit
Cape Verde Webcams; KenCall;
Nollywood.
• The African ICT Backbone
African Broadband most expensive
SAT Cables, Fibre Optics, etc.
…. And Venture Capital
• Chinese Regional Governments?
• US FCC Auctions of Spectra for Mobile
Phones
• Are African Banks up to the task of
financing the KE?
Foreign Aid?
Foreign Aid?
NO!
Employment and Poverty
Reduction
Employment and Poverty
Reduction?
• Gini Coefficients
• Tetteh Quarshie
Revolution
Employment and Poverty
Reduction
• Gini Coefficients
• Tetteh Quarshie
Revolution
Country/Region
Gini
Africa (average)
47.1
Latinamerica
50.5
Asia
35.6
Ghana
35.2
Kenya
54.2
South Africa
60.9
Sweden
25.0
US
40.8
UK
36.0
"We paid the price of not taking part in the
Industrial Revolution of the late eighteenth
century because we did not have the
opportunity to see what was taking place
in Europe. Now we see that information
and communication technology has
become an indispensable tool. This time,
we should not miss out on this
technological revolution."
Professor F.K.A. Allotey
Some Ideas
I. Education
II. Migration and the Brain Drain
III. Knowledge Economy
IV. Pro-Growth Policies?
V. Capital/FDI?
VI. Micro-Credit?
Pro-Growth Policies?
Capital Flows and FDI?
Micro-Credit?
• Microcredit seems to help the customers
themselves, but are effects only
localized?
• few places with any serious levels of
penetration.
• Village-wide spillovers in Bangladesh?
• The lack of multiplier effects is pushing
some donors to look up-market
CONCLUSION
I. Education
II. Migration and the Brain Drain
III. Knowledge Economy
IV. Pro-Growth Policies?
V. Capital/FDI?
VI. Micro-Credit?