HLEG thematic workshop on Measurement of Well Being and Development in Africa, 12-14 November 2015, Durban, South Africa, More information at: www.oecd.org/statistics/measuring-economic-social-progress

1. Economic Transformation and the SDGs –
Measurement and Tracking
Dr Yaw Ansu
Chief Economist
African Center for Economic Transformation (ACET)

2. SDG # 8 is pivotal among the SDGs
SDG #8
However SDG #8 requires achievement of SDGs
2,3,4,5,7
2. End hunger, promote sustainable agriculture
3. Healthy lives
4.Quality Education
5. Gender equality
7. Affordable and sustainable energy
9. Infrastructure and industrialization
Promote sustained,
inclusive and sustainable
economic growth, full
and productive
employment and decent
work for all
SDG #8 achievement will help
achievement of SDGs 1,2,3,4 and 10
1. End Poverty
2. End hunger
3. Heathy lives
4. Quality Education
10. Reduce Inequality

3. 3
SDG # 8 is essentially
addressing the issue of
economic
transformation
• Sustainable growth in Africa requires
Economic Transformation
• Economic Transformation Requires
growth with DEPTH
 Diversified production and
exports;
 Export competitiveness
 Productivity gains in all sectors of
the economy
 Technological upgrading
throughout the economy
 Human well being (= Decent
Employment + High Incomes)
Leads to: dignity, income security,
access to health, education etc. and
reduced inequality
Full and productive Employment
Decent Work For All
Sustainable economic growth
It is therefore crucial to clarify the concepts underlying SDG #8 and to
provide metrics that will facilitate its measurement and tracking
Key Concepts of SDG #8 ACET’s Conception of Economic Transformation

4. Informality and high youth unemployment
characterizes the employment landscape
Informality and Youth Unemployment should be top priority
issues
African youth
increasingly educated
and aspiring to formal
employment
• Low official employment rates are misleading:
80+ % of employment in informal sector
High and rising youth unemployment
0
5
10
15
20
25
30
Benin Liberia Malawi Mali Zambia
2.4
5.1
8.6
10.7
15.2
25.3
29.0
17.6
13.5
28.3
Youth unemployment rates and NEET of selected African
countries (%)
Youth unemployment NEET
Youth unemployment poses
significant costs
• Only a fraction of youth
entering labor force from
secondary school and tertiary
institutions find formal
employment (10% in Ghana).
 A waste of individual
talents
 A waste of opportunity to
capitalize on an important
asset
 A burgeoning army of
frustrated youth that pose
a risk

5. Why Formal sector?
There is need to move away from romanticizing the informal sector and make
expansion of formal employment a national economic target
• Formal sectors have higher
productivity
• Formal sector employment
provides higher incomes and
benefits
• Target should be:
Raise FE/WP, where FE is the number of workers in formal employment and WP is the
size of the working-age population (15-64 yrs). This target can be decomposed into 3
ratios:
FE/WP = FE/SG * SG/LF * LF/WP
Where:
FE = Formal employment
WP = Working-age population
SG = Secondary and tertiary, including technical and vocational, school graduates in
the labor force
LF = Labor force
=WP – (Those in School and Training)-(Housewives)-(Those incapacitated)

6. Raising Formal Employment- Way Forward
So the target of raising the ratio of the formally employed to the working age
population amounts to:
• Raising the ratio of formal employment to secondary and tertiary school
graduates in the labor force;
• Raising the share of secondary and tertiary school graduates in the labor
force; and
• Raising the labor force participation rate.
Together, these three component ratios constitute a focused economic
transformation agenda that can effectively respond to the challenge of
meeting SDG 8.

7. Raising Formal Employment-Alternative formulation
Alternatively, the target can be expressed in flow terms as:
(fe – wp) = (fe – sg) + (sg – lf) + (lf – wp)
That is:
• Growth in formal employment must exceed the rate of growth of the
number of graduates from secondary and tertiary institutions entering the
labor force
• Growth of the graduates must exceed that of the labor force
• The labor force must grow faster than the working-age population.

8. Raising the labor force participation rate.
• Facilitate access to good and affordable health care in order to keep the
working age population fit
• Remove constraints and discrimination faced by women in entering the
labor market
• Promote family leave and childcare policies that enhance the options of
women to participate in the labor force

9. Source: World Development Indicators, 2015, World Bank
• Provide expanded and affordable access to secondary and tertiary,
including technical and vocational, education
• Ensure that those entering secondary and tertiary institutions graduate
on time.
0
20
40
60
80
100
120
High Income
OECD
European
Union
Latin America
& Pacific
East-Asia and
Pacific
World South Asia SSA
91.2 91.7
75.7 78.5
66.0
51.4
33.7
105.1
111.8
92.9
86.6
75.2
65.5
42.8
76.0
66.2
43.9
33.1 32.9
21.2
8.6
Gross and Net Enrolment Rates of Secondary and Tertiary
NER Secondary GER Secondary GER Tertairy
Source: World Development Indicators, 2015, World Bank
Raising the share of secondary and tertiary school graduates in the labor force.

10. • Labor-intensive economic growth and transformation strategies,
including “the basics” as well as “market-oriented industrial policies”
• Quality education system emphasizing STEM and raising role of
technical and vocational training
• Align growth and educational strategies; involve private sector in
education.
Raising the ratio of formal employment to secondary and tertiary graduates in the
labor force

11. .
• Growth of formal employment—short of regular Labor Force Surveys:
administrative surveys, tax and company registration records, social security
payments; use of ICT platforms that encourage recent graduate entrants to
the labor force to periodically self-report on employment status (e.g. via
text messages);
Data and monitoring framework entails measuring a number of
variables
• Numbers and courses of study of secondary and tertiary graduate
entrants to the labor force—Ministry of Education records supplemented
by surveys of secondary and tertiary institutions including vocational and
training institutes
Formal
Employment
Education
Labor force
• Population census supplemented by periodic surveys on labor force, with
gender disaggregation.
• Push for comprehensive and regular labor force surveys in African countries.