Africa’s Youth Employment Paradox: More Young People Are Working, but 90% Remain in Informal Jobs

Africa has one of the world’s most active young workforces, but millions of young people continue to face unstable employment, limited social protection and a growing gap between education and the skills employers need.

According to the Mastercard Foundation’s Africa Youth Employment Outlook 2026, approximately 57% of young Africans are working, compared with about 48% of young people in the rest of the world. However, around nine in ten employed young Africans work in the informal economy, often without formal contracts, social protection or reliable income security.

The report also indicates that a third of young workers live in extremely poor households, highlighting the difference between simply having a job and securing decent, sustainable employment.

The challenge is compounded by limited access to higher education. Only 9% of young Africans have completed tertiary education. Even among university graduates, employment is not guaranteed. In Algeria, Egypt and Morocco, nearly 30% of graduates are unemployed or inactive.

Across the continent, the pressure on labour markets continues to grow. More than three million young Nigerians enter the labour market every year, while in Egypt approximately 1.3 million young people compete for around half a million new jobs annually.

South Africa faces an estimated five million unemployed young people. In Kenya and Rwanda, many young people who manage to secure employment find themselves working in informal jobs.

These figures point to a major challenge for African economies: creating employment opportunities while ensuring that young people acquire skills that match the changing demands of the labour market.

Education alone is not enough to secure employment

The growing gap between qualifications and employment opportunities has raised questions about whether traditional education systems are adequately preparing young Africans for the jobs being created by the private sector.

Shana-Michelle Rabonda, Chief Operating Officer of ALX Africa, argues that the challenge should be understood as a gap between what young people are taught and what employers actually need, rather than a lack of talent or effort among Africa’s youth.

For young graduates, obtaining a qualification is increasingly only the beginning of the journey. Employers are looking for practical competencies, digital capabilities, problem-solving skills and the ability to adapt to rapidly changing workplaces.

This has increased the importance of demand-driven training programmes that are developed in collaboration with employers and integrate career preparation from the beginning.

Artificial intelligence is changing the skills employers need

The rapid adoption of artificial intelligence is adding another dimension to Africa’s employment challenge.

More than half of employers in sub-Saharan Africa, approximately 52%, plan to reskill their employees to work alongside AI. This signals a growing demand for workers who can combine technical knowledge with the ability to use emerging technologies productively.

ALX Africa has positioned its training programmes around these changing needs, offering learning pathways in AI and Data, Creative and Entrepreneurship.

The organisation also uses Chidi, an AI learning companion built on Anthropic’s Claude model, to provide additional support to learners throughout their training.

As AI reshapes entry-level employment, young Africans will increasingly need to demonstrate that they can work with technology, adapt to new tools and contribute to organisations operating in increasingly digital environments.

Expanding access to practical technology training

ALX Africa, a pan-African technology and entrepreneurship training provider, says accessible and relevant training can help young people connect their skills to employment opportunities.

The organisation has more than 352,000 graduates, 56% of whom are women, and operates hubs in Egypt, Ethiopia, Ghana, Kenya, Morocco, Nigeria, Rwanda and South Africa. More than one-fifth of its learners and alumni across Africa come from rural areas.

Through its partnership with the Mastercard Foundation, ALX enables learners to access relevant training for $5 per month.

Its programmes are delivered online, while physical hubs provide learners with reliable internet access, study spaces, events, activities and opportunities to connect with other learners. The hubs are designed to offer more than classrooms, providing an environment where young people can build professional relationships and receive peer support.

According to ALX, 62% of its graduates are working within six months of completing their training, rising to 92% within one year.

The organisation says its approach is built around four priorities: accessibility, relevance, support and community.

Employers are looking beyond academic qualifications

As businesses respond to digital transformation and the adoption of AI, employers are increasingly interested in candidates who can demonstrate practical skills and the ability to perform in real working environments.

Companies including Absa, Stanbic, MTN and KPMG have hired people trained by ALX.

For African graduates, these opportunities demonstrate the importance of developing skills that are transferable across industries and relevant to employers both within the continent and internationally.

The growth of remote work and digital services also creates opportunities for young Africans to compete for global roles without necessarily relocating abroad.

However, accessing these opportunities requires more than internet connectivity. Young people need relevant technical training, professional networks, career guidance and the ability to demonstrate their capabilities to prospective employers.

Entrepreneurship offers another route to youth employment

Formal employment is not the only pathway through which young Africans can earn a living.

The United Nations Economic Commission for Africa estimates that 75% of young Africans want to start their own businesses, reflecting strong interest in entrepreneurship as a route to economic independence.

ALX reports that approximately 45,000 of its graduates are self-employed, earning income through freelancing or businesses they have established. These ventures have collectively created more than 61,900 jobs, while entrepreneurs trained through its programmes have raised over $7.4 million for their businesses.

The figures highlight the potential of entrepreneurship and digital work to expand employment beyond traditional recruitment.

For young people entering crowded labour markets, skills in business development, digital services, financial management and client acquisition can provide alternative sources of income.

However, turning an idea into a sustainable business also requires access to networks, mentorship, markets and financing.

Building a workforce ready for Africa’s changing economy

Africa’s youth employment challenge is not simply about increasing the number of jobs. It is also about improving the quality of work, strengthening the connection between education and industry, and ensuring that young people can participate in emerging economic opportunities.

The high proportion of informal employment shows that millions of young Africans remain outside the protections and stability associated with decent work. At the same time, the unemployment and inactivity experienced by university graduates demonstrate that academic qualifications alone cannot resolve the problem.

As AI, digital services and entrepreneurship reshape the employment landscape, investment in practical, market-relevant skills will be increasingly important.

The experience of training providers such as ALX Africa points to the role that accessible learning, employer engagement, technology and supportive communities can play in preparing young people for work.

The wider challenge for African governments, educational institutions and businesses will be to translate these opportunities into more secure employment, sustainable businesses and better livelihoods for the continent’s growing young population.

About Shana-Michelle Rabonda

Shana-Michelle Rabonda is Chief Operating Officer of ALX Africa. Based in Johannesburg, she has spent a decade in the African Leadership ecosystem, previously leading ALX’s operations and people functions as the organisation expanded across the continent.

She holds a degree in Computer Science and Information Systems from Rhodes University and has championed dedicated technology cohorts for women at ALX.

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