8
Ghana, Kenya, Mozambique and Tanzania, government revenues increased between 2006 and 2009, as a percentage of GDP, but much less than the increase in spending.
In addition to the lower level of economic activity, which automatically generates less revenue, many countries also decreased taxes. For example Tanzania reduced several taxes
VAT, income tax, oil tax thereby decreasing government revenues by .43 per cent of GDP.
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As for the impact of the crisis on official development aid ODA, Ghana recorded a one per cent decline in aid in 2009 relative to 2006.
3. Labour market indicators
Often the labour markets adjust in these countries through an increase in informal employment, and changes in labour supply patterns. Unemployment is unlikely to be a very
good indicator because of the large informal sector and its role as a buffer, and the absence of a social protection system covering a substantial share of workers. However,
unemployment did increase in the two countries for which there are national statistics.
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Before turning to labour market indicators, it is worth noting that labour regulations in these countries, including hiring and firing legislation are relatively flexible so that
enterprises were in a position to adapt their labour demand to the new situation fairly rapidly see Barbier and Pagès, 2011 for a discussion on labour market institutions in the
French-speaking group of countries. Also regulations are poorly enforced.
Youth employment indicators
All countries in the sample face the challenge of massive increases in the population size, mainly youth. While population growth has not changed as a result of the crisis, it
makes the school-to-work-transition even more difficult. In Nigeria, for example, 47 per cent of the population is below 15 years. Over the period 2001–10, the cohort of youth aged
20–24 years increased on average from 2.22 per cent a year in Mozambique to 3.32 per cent a year in Benin Table 10.
Regarding youth indicators, the unemployment rate for women aged 15-24 deteriorated, from 43.5 per cent in March 2007 to 48.9 per cent in March 2009 in Nigeria.
Over the same period, the unemployment rate for men aged 15-24 reduced from 56 to 51.9 per cent.
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The available evidence in some countries showed that the school-to-work transition was becoming increasingly difficult. In Egypt, the labour force increased by 400,000
individuals between August 2008 and August 2009, instead of the estimated 700,000.
5
This gap could indicate discouragement among unemployed youth or a longer stay in the
education system. Ghana’s economy should create 230,000 jobs every year in order to cope
5
The estimate is based on demographic trends. Source: ILO, 2010, Laborsta, http:laborsta.ilo.orgstisti_E.html
10
with increasing population size, mostly youth. To give an idea of the challenge, this should be compared with the 103, 928 jobs expected to be created by FDI in 2010.
Working conditions’ indicators
It was reported that employees who kept their jobs in the Tanzanian tourism sector experienced a decline of 10 per cent of their monthly wage. Worsening working conditions
lower wages and higher expectations were also reported in exports’ sectors. Minimum wages were increased in Kenya and in Mozambique in 2009.
Public sector
The public sector is a major provider of formal employment in low-income and lower- middle income countries. In Ghana, Cameroon, and the five LDCs in the sample, public
sector employment can represent up to half of formal employment. In addition, public wages have increased in 2008–2010 in five countries of the sample.
Ghana has implemented a Single Spine Pay Policy, which is aimed at reducing and eliminating wage discrimination in the public sector. Following this policy, over 500,000
public sector employees will have seen an increase in their wages in 2010. This measure, whose full implementation will cost US2.2 billion or 6 per cent of 2010 GDP will
contribute to improving the living standards of some of low-paid public workers. In Benin, the public wage bill increased by 24 per cent between 2008 and 2009.
There was also an increase in public wages in Cameroon in 2008 after a massive decrease in the 1990s.
In Mali, an agreement was reached to increase wages for teachers over 2009–2010 for an amount equivalent to .05 per cent of GDP. These measures were taken after years of
nominal stability, usually as part of renewed efforts to achieve MDGs. In Kenya, public wages increased by between 14 and 28 per cent. The rise was applied
in such a way as to increase wage differentials between low paid and high paid public workers.
In Nigeria, part of the fiscal package representing .02 per cent of GDP was used to settle a part of wage arrears to workers in public companies and the government sector.
In addition, 9,160 posts in public employment were filled in Mali to achieve MDGs; especially in education 4, 360. Cameroon experienced a reduction in public sector staff.
Public enterprises were privatized in Cameroon, Mali, and Nigeria. In Nigeria lay-offs were announced due to privatization of the national telecommunications and steel companies.
11
4. Policies implemented as a response to the crises
