For citation:
Ajibola, A. B. (2026). Human Capital, Structural Transformation, and the Productivity Puzzle in Sub-Saharan Africa: A Structured Narrative Review. AlterEconomics, 23(3), 741–765. https://doi.org/10.31063/AlterEconomics/2026.23-3.11
Abstract:
Education has expanded rapidly in Sub-Saharan Africa, yet productivity growth, formal employment, and structural transformation remain uneven. This divergence raises an important question: Why has the growth of human capital failed to translate consistently into structural transformation across the region? This paper addresses this question through a structured narrative review of 113 formal-corpus sources identified through structured searches and a documented curated pool. The answer lies in three interconnected dimensions of structural absorption, defined here as an economy’s capacity to turn skills into higher-productivity employment. First, labour has moved disproportionately into services, which often generate short-term productivity gains rather than the sustained gains historically associated with manufacturing. Education is therefore more likely to contribute to productivity growth when it provides skills that match the needs of productive activities. Second, demographic growth is increasing the need for new jobs faster than demand for skilled labour is expanding. This limits access to salaried employment for growing cohorts and increases pressure on labour absorption. Third, historically rooted institutional differences continue to shape the distribution of human capital and productive activity. Firm-level evidence also shows that higher productivity does not always lead to employment growth. These factors interact differently across subregions. They help explain why renewed industrialisation in some economies coexists with persistent informality, while others face premature deindustrialisation and uneven productivity convergence. The findings highlight the need to align education reform with productive job creation, firm upgrading, and region-specific approaches to structural transformation.
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