Journal Article

The Belt and Road Initiative and job creation: empirical evidence from Africa's jobless growth phenomenon

Mohamed, Abas Omar

2025

Overview

Africa's economic growth has largely failed to generate meaningful employment, despite sustained positive growth over the past two decades. A giant cross-continent, multisectoral investment initiative with the potential to accommodate a large number of semi-skilled workers is the Chinese-led Belt and Road Initiative (BRI). This study investigates the impact of the BRI on employment generation across 51 African member countries from 2000 to 2022. The study employs dynamic Generalized Method of Moments (GMM) and Two-Stage Least Squares (2SLS) methods to estimate country and firm-level panel datasets, providing both macro and micro-based empirical evidence. The results confirm the jobless growth hypothesis in Africa, indicating that while the BRI does not directly impact employment, it significantly complements economic growth by fostering job creation at both the country and firm levels. Specifically, the BRI contributes to a 1-10% reduction in unemployment at the firm level and an 11-17% reduction at the macro level. Extensive robustness checks support these findings, even amid heterogeneity in skill, gender, and income groups. The study offers long-term policy implications for African policymakers, suggesting inclusive policies that prioritize BRI's second-phase investments in sectors that simultaneously drive economic growth and substantial job creation. A major limitation in the literature on the employment-output nexus is its narrow focus on theory testing, without sufficiently exploring viable policy options to foster more inclusive growth and job creation. To address this gap, this study seeks to advance the empirical boundaries of the field by investigating how membership in the Belt and Road Initiative (BRI) can mitigate Africa's jobless growth in three aspects. First, it proposes BRI membership as an augmenting mechanism to Africa's recent growth trajectory, potentially generating employment. Second, it advances the BRI employment literature by providing micro- and macro-based African context empirical evidence utilizing a large sample. Finally, the study examines the persistence of short-run GMM results on African job creation within a long-run framework.

• Publisher: Cogent,Taylor & Francis Group
• Subject: Africa / BRI / economic growth / Economics / Economics and Development / Finance / Industry & Industrial Studies / job creation / jobless growth