Supporting jobs by strengthening financial systems

This research paper describes the development and testing of a framework designed to help FSD programmes across Africa measure the employment effects of financial sector deepening. Developed by The Good Economy, Tandem, and FSD Africa, the framework aims to move beyond simple job counts to assess the quality, inclusion, and sectoral impact of jobs created through financial system interventions.

• Sub-Saharan Africa faces a significant employment challenge, requiring an estimated 50,000 new jobs daily for young people entering the market. The region struggles not only with unemployment but also with underemployment, where workers face low wages and insufficient hours. While formal wage employment is the primary driver of long-term prosperity, the informal sector currently generates a substantial amount of economic value; in Mozambique, informal jobs in manufacturing or services are as productive as wage jobs.
• Financial systems can drive job creation by overcoming finance constraints for small firms and improving capital allocation to high-growth companies. FSD Africa identifies two primary mechanisms for this: increasing access to capital by attracting overseas investment and domestic savings, and boosting investment in the real economy to allow firms to create jobs or increase productivity through capital investments.
• The developed measurement framework follows four design principles: it must be Meaningful (tracking real impact over time), Transparent (disclosing calculations and limitations), Conservative (using base and best case scenarios to avoid overclaiming), and Proportionate (balancing rigor with the program's broader aspirations). The process involves a theory-based assessment of material effect, estimating job numbers and indirect supply chain effects, conducting a 'decent jobs assessment' using sector proxies, and optionally commissioning bespoke research for high-impact projects.
• Key learnings from the framework's application include the necessity of using Full Time Equivalent (FTE) metrics to account for underemployment, as new investment often increases hours for existing workers before new staff are hired. Additionally, the authors argue for a sectoral approach to measurement because employment intensity and job quality vary by sector. This allows for the use of a 'decent work employment multiplier' to distinguish between total job volume and the creation of high-quality, inclusive employment.

APA

Ripley, M., Davies, G., Munjal, K., & Mwanzui, R. (2021). Supporting jobs by strengthening financial systems. FSD Africa. https://fsdafrica.org/supporting-jobs-by-strengthening-financial-systems/

Chicago

Ripley, Matt, Gareth Davies, Kevin Munjal, and Ryan Mwanzui. Supporting jobs by strengthening financial systems. FSD Africa, 2021. https://fsdafrica.org/supporting-jobs-by-strengthening-financial-systems/.

Wikipedia

{{cite report |last1=Ripley |first1=Matt |last2=Davies |first2=Gareth |last3=Munjal |first3=Kevin |last4=Mwanzui |first4=Ryan |title=Supporting jobs by strengthening financial systems |publisher=FSD Africa |date=20 January 2021 |url=https://fsdafrica.org/supporting-jobs-by-strengthening-financial-systems/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ripley2021supporting, author = {Ripley, Matt and Davies, Gareth and Munjal, Kevin and Mwanzui, Ryan}, title = {{Supporting jobs by strengthening financial systems}}, institution = {FSD Africa}, year = {2021}, month = jan, url = {https://fsdafrica.org/supporting-jobs-by-strengthening-financial-systems/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }