How credit constrained are family-owned SMEs in Arab countries?

Family-owned firms account for majority of small and medium-sized enterprises (SMEs) in Arab countries, but evidence on the impact of this ownership type on access to credit in the region is scarce. Yet the issue is key for understanding barriers to the emergence of dynamic private sector and growth acceleration. To reduce this knowledge gap, our paper examines links between family ownership and credit constraints faced by SMEs in Egypt, Jordan, Morocco, and Tunisia, utilizing the World Bank Enterprise Surveys. We find that while family-owned firms have a higher need for credit than nonfamily-owned firms, they are more likely to be discouraged from applying for it. Due to this self-selection out of credit markets, they are more credit constrained than nonfamily firms, even though their credit application rejection rates are lower. Stronger firm governance, including presence of formal business strategies and improved managerial practices, can encourage family-owned SMEs to apply for credit more often and ease their access to finance.An earlier version was presented at the 2023 Conference of Afrimed Finance Society on Building Resilience in Emerging Markets: The Role of Corporate Governance and Sustainability, Casablanca, Morocco (19th – 20th July). The authors thank conference participants and Peter J. Morgan for helpful comments that improved the paper. The views expressed are those of the authors and do not necessarily reflect those of their institutions of affiliation. Corresponding email addresses: [email protected] and [email protected]

How credit constrained are family-owned SMEs in Arab countries?

Family-owned firms account for majority of small and medium-sized enterprises (SMEs) in Arab countries, but evidence on the impact of this ownership type on access to credit in the region is scarce. Yet the issue is key for understanding barriers to the emergence of dynamic private sector and growth acceleration. To reduce this knowledge gap, our paper examines links between family ownership and credit constraints faced by SMEs in Egypt, Jordan, Morocco, and Tunisia, utilizing the World Bank Enterprise Surveys. We find that while family-owned firms have a higher need for credit than nonfamily-owned firms, they are more likely to be discouraged from applying for it. Due to this self-selection out of credit markets, they are more credit constrained than nonfamily firms, even though their credit application rejection rates are lower. Stronger firm governance, including presence of formal business strategies and improved managerial practices, can encourage family-owned SMEs to apply for credit more often and ease their access to finance.An earlier version was presented at the 2023 Conference of Afrimed Finance Society on Building Resilience in Emerging Markets: The Role of Corporate Governance and Sustainability, Casablanca, Morocco (19th – 20th July). The authors thank conference participants and Peter J. Morgan for helpful comments that improved the paper. The views expressed are those of the authors and do not necessarily reflect those of their institutions of affiliation

Labour Regulation in Sub-Saharan Africa

This chapter engages with the issue of labour regulation in Sub-Saharan Africa, describing variation in regulatory regimes and discussing how well they align with the realities and needs of different countries’ labour markets. We review evidence on the historical origins of regulation and how it has persisted over time, and map the contemporary prevalence of different forms of regulation. The connection between this regulation and countries’ employment contexts is then discussed, focusing on the issues of compliance and the effects of labour regulation. This discussion is informed by the use of three case studies with contrasting legal histories and employment contexts: Ghana, South Africa and Senegal. Despite the vast majority of employment being informal in most SSA countries, we find that much regulation still revolves around the formally employed. We argue that regulation needs to be more tailored around the particular characteristics of each country’s labour market

The Employment Tax Incentive – a reform proposal

South Africa’s Youth Employment Incentive is described in this paper and its impact is reviewed. It is argued that in the context of South Africa’s deep structural unemployment, neither the empirical evidence nor the underlying theory supports the current narrowly targeted wage subsidy design. Drawing in part on comparison with the US earned income tax credit, recommendations are outlined for reform of the current youth incentive in favour of a broad-based employment subsidy. Illustrative cost estimates for alternative design parameters are set out, together with a concluding note on financing considerations

Youth and the just transition – a profile of young NEET in Mpumalanga

With one of the highest youth unemployment rates in the world, South Africa’s planning for a just transition needs to take into account the vulnerabilities of its youth cohorts, especially those that can be qualified as not in education, employment or training. This paper provides a profile of young people not in education, employment, or training (NEET) in Mpumalanga province, the region with the highest exposure to the coal exit. Using data from the Quarterly Labour Force Survey (QLFS), the Census and the General Household Survey (GHS), our findings show that Mpumalanga has had a NEET youth rate of over 37% for the past decade – representing over 638 947 young people between the ages of 15 to 35, with almost three-quarters of them living in income-poor households. Contrary to popular belief, our findings dispel the misconceptions that young NEETs are disinterested or unwilling to work, as more than 640 000 of these youth expressed wanting to work. However, our analysis also reveals that a significant portion of unemployed young NEETs are new entrants to the labour market – meaning they have never worked before - who have been persistently searching for employment for extended periods of more than five years. Additionally, the study identifies key factors associated with being NEET, such as gender, household income and household adult employment. Notably, being female and living in income-poor households emerged as the factors most influential on the likelihood of being NEET among Black youths in Mpumalanga. The results also highlighted a pronounced gender dimension; being married and having children under the age of seven significantly elevated the probability of being NEET among Black female youths. Our findings underscore the need for a nuanced approach in developing targeted policies and interventions that align with NEET youth aspirations, considering the evolving landscape of the energy sector. In a country where access to the labour market explains the highest share of inequality, not giving enough focus to one of the most vulnerable populations such as the NEET youth in the process of a structural transformation will only increase socioeconomic inequalities.This paper was supported through the EU-AFD Research Facility on Inequalities

Can a holistic coaching and referral programme enhance well-being and employability amongst NEET youth?

In response to high and increasing rates of youth unemployment and a growing cohort of youth who are not in employment, education and training (NEET), the Basic Package of Support (BPS) for youth was developed. It takes as its starting point that young people who are disconnected from learning and earning opportunities are often in this situation because of the multiple barriers they face, arising from the structural and multifaceted nature of poverty. Furthermore, when they try to access services to help them overcome these challenges, they experience these services as being isolating and unfriendly. The BPS set out to address these dual challenges by introducing a youth-centred programme that proactively reaches out to disconnected and discouraged NEET youth, engages them in a holistic assessment of their lives, coaches them to understand what they want to achieve in life, and actively refers them to available services and opportunities that can enable them to overcome barriers and connect them to learning and earning opportunities. Simultaneously, it engages local service providers that young people are likely to engage with, and invites them to collaborate in a Community of Practice aimed at building a stronger understanding of their role in supporting young people’s transitions to learning and earning, and at developing active problem solving and collaboration to improve service delivery to youth. The programme’s dual aims are a) to improve young people’s well-being, sense of belonging, and navigational capacity so that they are able to (re)connect to learning and earning opportunities and stay in these opportunities for longer periods of time; and b) to improve service delivery to young people in local communities so that youth no longer “fall through the cracks”, and are better supported in their transitions towards learning and earning. The programme was piloted between the beginning of 2022 and the end of 2023 in several sites in Gauteng, KwaZulu Natal and the Western Cape. In this report we present data on the profile of young people who take up the BPS opportunity, and what their well-being, navigational capacity and employability outcomes are as they progress through the programme. We draw on qualitative and quantitative data derived from a concurrent triangulation mixed methods design that formed the basis of the monitoring and evaluation during the pilot phase. These findings demonstrate improved outcomes across several domains of well-being including self-reported quality of life, mental health and sense of support. They also show improved ability to handle stress and access to services – indicators of improved navigational capacity. Finally, we see that by the time participants have completed three coaching sessions almost 40% of them have reconnected to some form of learning or earning opportunity. The findings demonstrate that young people who take up an individualised, multifaceted coaching programme experience improvements in their lives that draw them closer to opportunity, and that indeed, two-fifths are able to make connections to learning and earning again, even after a small number of sessions with a coach. What remains to be understood is whether young people stay in these opportunities to completion, and whether the programme places them on a better footing for longer term trajectories towards sustainable work and learning. The report provides evidence of the value of individualised coaching and referrals for particularly vulnerable young people for whom more support to connect to opportunity seems to be necessary.The implementation of the pilot phase of the Basic Package of Support has only been possible because of the commitment of a broad range of stakeholders. We thank each of the funders and partners who have allowed us to take BPS from design to reality. For this research report, we especially wish to thank the young people who are participating in the BPS, and each one of the site teams. Young people - for engaging in the data collection process and for sharing their insights about their experiences with the programme. We hope this report demonstrates their dedication, resilience and incredible progress. Ultimately, this research is for their benefit and, hopefully, that of many more young people going forward. The site teams – site managers, youth coach guides, youth coaches and mobilisers, for playing a crucial role in supporting the young people on the programme. But they have also been so supportive of the research and learning process that has run alongside the piloting of the programme in Atlantis, Cato Manor and Orange Farm. Piloting a programme comes with its own challenges, but doing so while a rigorous research process is underway simultaneously is particularly difficult. We commend the site teams for their openness to the learning process, the facilitation of the data collection, and for supporting the young people as they engaged with both the programme and the research process. We could not ask for better site teams! This report reflects mostly on the quantitative data collected, but qualitative data bring nuance to the trends reported on. Senzelwe Mthembu, Dominique Ralarala and Kauthar Parker were involved in the qualitative data collection and analysis. We thank them for their dedication to the research, their in-depth insights into the qualitative data and their passion for the young people and the programme

An Analytical Framework to Assess Green Transition Jobs in South Africa

The threat of climate change and the resultant catastrophic weather events across the globe underpin the need for a shift away from carbon-intensive modes of production. In South Africa, where the generation of electricity is heavily reliant on coal, this imperative is recognised, and various policies are aimed at supporting the implementation of a Just Energy Transition. This transition to a greener economy can have various impacts on the labour force, with a significant concern being an increase in unemployment. In this paper we propose an analytical framework for profiling workers who are likely to be impacted by the energy transition, based on what work they do and in which industry they work. By combining a bottom-up approach to identify occupations related to the green transition, with a top-down approach to identifying ‘brown’ industries, we arrive at a matrix that allows us to look at where on the nexus between green transition occupations, and brown industries, workers find themselves. Using South African labour force data, we plot these two dimensions characterising a worker’s employment, and provide a nuanced picture of what type of worker may be at risk of, or alternatively better placed to withstand, the potential effects of the green transition. This can ultimately assist in developing efficient and effective policies and interventions to mitigate the potential risks of the green transition. A key feature of the framework is its flexibility with respect to the definition of ‘green’ jobs and ‘brown’ industries; the bottom-up and top-down methodologies; as well as the data utilised, extending the usefulness to a global level

Profiling Green Jobs and Workers in South Africa: An occupational tasks approach

To adequately prepare the labor force for the green economy, policymakers and workers require a detailed understanding of the nature of green jobs. This study profiles green jobs in the South African labour market. We use labour force survey data and apply an occupational task-based approach to identify current green occupations and associated jobs, count them, and profile their workers and wages. We find that 5.5 percent to 32 percent of South Africa’s jobs can be labelled as “green”, where the former estimate uses a strict definition and the latter uses a broad definition. The share of strictly green jobs has not changed over eight years. While 65 percent of strictly green occupations can be classified as high (skill)-occupations, only 55 percent of workers are in these occupations, reflecting numerous employment opportunities in mid-level and elementary green occupations. Strictly green occupations tend to be male-dominated and held by prime-age (25-44) workers with post-secondary school. However, the profile of those in the greenest of the green occupations are older (age 45-65) workers and black African with lower than matric qualifications. Policies to prepare South Africans to engage in the green economy include developing a strategy to teach new and existing workers to use green technologies, targeting green occupations in youth development programs, making a concerted effort to support women in STEM, helping low-skilled green workers to organize and improve their work conditions, and continuing to collect and analyze data to better track South Africa’s progress in becoming a green labour force

Trend in energy intensity and carbon performance in North Africa

Decoupling economic growth from environmental degradation and climate change, increasing resource efficiency, and promoting both sustainable production and sustainable lifestyles is a challenge in North Africa, a region where even a relative decoupling of income growth and carbon (CO2) emissions has not been achieved. This chapter aims to examine recent trends in emissions and the main drivers of improvement in the region's carbon intensity (carbon emissions per unit of GDP), energy intensity (energy use per unit of GDP), and per capita emissions. It also analyzes the effect of policies such as energy taxes and energy standards on the energy efficiency of SMEs in North Africa and suggests actions and policies to encourage structural transformation and ensure better energy efficiency

Trends in household headship and living alone in South Africa, 1995-2011

In South Africa, households were formed at about twice the rate that the population grew between census 1996 and census 2011 and the number of single-person households ballooned by 150%. In this paper, I describe trends in household formation and living alone between 1995 and 2011, made possible by prior work to address data quality concerns in the household survey data I use. I use household heads as a proxy for household formers since I have one head per household in my data. In South Africa’s patriarchal context, household headship is probably a more reliable proxy for these purposes than it may be in other contexts. I show a surge in household formation in the late 90s was driven by prime-aged and older women and Black African men and likely connected to new freedoms afforded to these groups after the transition to democracy. Household formation then steadied in the 2000s, hiding variation in who formed what types of households. Astonishing growth in the rate at which South Africans live alone was led by Black African men, a group historically associated with circular labour migration. Women instead are heading up complex households including children. More households only consist of adults of a single sex, mainly because more households are singleperson. These changes seem tied up with long-term marital decline. By 2011, most female heads were never-married; most people living alone were never-married; and the growing majority population group of never-married adults persistently increased their propensity to form households over this period