Africa’s jobs problem is a market access problem

For decades, formal employment in Africa has remained stuck at around 15 percent. Most people work in small, informal businesses with low and unstable earnings. Even amid educational gains, nearly half of all university graduates work informally.

One common way that governments and development funders try to promote business growth and job creation is to help businesses produce more, including by giving them credit and training. This can be useful, but only a little and for some. Why? Part of the answer is because most firms are not just constrained by what they can produce, but by who they can sell to.

In this blog, we draw on a growing body of evidence from the J-PAL network and reflections from the Growth Summit 2026 to explore how to harness the potential of export promotion in driving growth and job creation.

Growth comes from expanding demand, not just shifting it

When businesses sell to the same local market, one firm’s growth often comes at another’s expense. In these cases, external support to individual firms may simply reshuffle sales and workers across businesses, rather than creating new jobs. But when firms access new markets, they can expand without displacing existing activity. Exporting is the clearest example: firms selling into international markets bring in new demand that allows them to expand, invest, and hire, leading to a net increase in employees. This is why export-oriented growth has played such a central role in job creation globally (though global scope for export-led manufacturing may be narrowing). Further, multinational businesses can help smaller domestic firms grow by sourcing goods and services from them and linking them to larger production networks, creating demand and exposing them to new ways of working.

Market access also influences which firms survive. Given large productivity differences across businesses even within industries, fragmented markets can allow less productive firms to stay in business. Market integration increases competitive pressure to upgrade or exit, raising overall productivity.

Regional markets matter too: improving trade infrastructure and lowering tariffs, including through the Africa Continental Free Trade Area, would help turn 54 separate markets into one trade region, unlocking new demand. Across much of Africa, services have been central to recent productivity growth; understanding how these sectors can generate sustained external demand and better jobs remains an important frontier.

Exporting can transform businesses and jobs, leading to better lives

When firms access larger markets, they don’t just sell more; they change how they operate. In Egypt, rug producers who received export orders increased profits and upgraded product quality by learning directly from foreign buyers on how to consistently deliver. Domestic firms supplying multinationals in Costa Rica similarly saw sustained productivity gains through ongoing feedback and standards, and those in Uruguay saw improved export performance. In Bangladesh and Myanmar, firms supplying foreign buyers improved job safety, as meeting buyer requirements meant adopting safer practices (though industrial roles are not always preferred by workers).

Accessing new markets is costly and complex

Delivering to customers beyond local markets requires businesses to overcome additional steps— finding buyers, meeting standards, executing production, and managing logistics—that are costly and complex, even for ambitious, high-growth potential firms.

Targeted programs can ease these constraints by supporting sustained investment, learning, and coordination. Tools that help firms find and connect with buyers, such as digital trade platforms in Latin America and Uganda, have increased sales and exports by making firms discoverable. Buyer–supplier matching and procurement training have also improved business performance over time.  And some governments directly help firms cover the costs of entering export markets. In Tunisia, a government subsidy program increased exports by offering matching grants that reduced upfront costs.

These efforts point to a broader implication for how public funds are deployed by governments and international financial institutions. Blended finance—public or concessional capital alongside private investment—should be used to address coordination failures, in which firms and investors won’t first move by themselves: backing first-time exporters, anchoring supplier networks, or seeding new sectors, instead of financing lower-risk activities that could move ahead on commercial terms.

What does this mean for policy?

If firms grow when they reach new customers, then policy should focus on making those connections easier. That means:

• helping firms find and match with buyers
• supporting firms to meet quality standards and deliver consistently
• reducing frictions that make it difficult to move goods, access inputs, and complete transactions
• using public and concessional finance to address coordination failures, such as supporting first movers, building networks, and facilitating entry into new markets 

These are practical, targeted ways to harness demand—and with it, job creation.

Critically, export promotion may fall short if underlying systems aren’t adequate. Reliable energy, efficient customs, and functioning logistics shape whether firms can compete and export. These factors also influence who benefits from market integration. Improvements in market access tend to go to more connected regions first, while others adjust slowly, underscoring the need for complementary investments in infrastructure, mobility, and regional development to help share concentrated gains.

What’s next?

Building on these insights, J-PAL is committed to strengthening our work on evidence-informed approaches for growth and private sector development, especially in sub-Saharan Africa. We welcome opportunities to collaborate, including by working with governments and partners to co-design and assess export promotion strategies, improve targeting (stay tuned for a forthcoming J-PAL policy insight), and better understand how specific policies and programs translate into more jobs, higher wages, and fewer people living in poverty. If you’re interested in partnering or learning more, please contact Julia Kaufman at [email protected].