?
Human Capital, Structural Transformation, and the Productivity Puzzle in Sub-Saharan Africa: A Structured Narrative
Education in sub-Saharan Africa is rapidly expanding, yet productivity growth, formal employment, and sectoral growth remain uneven. This discrepancy motivates a structured narrative review of the reasons why the growing stock of human capital has not led to consistent structural transformation in the region. Based on 113 formal sources, identified through a structured search and a carefully curated database, this review argues that the problem reflects three interrelated dimensions of structural absorption, understood here as an economy's ability to transform skills into high-productivity employment. First, labor reallocation is disproportionately skewed toward services, which provide static, one-time productivity gains rather than the sustained gains historically associated with manufacturing. Therefore, education makes a more consistent contribution where it imparts useful skills that are relevant to the activities that reward them. Second, the demographic momentum increases the need for job creation faster than the demand for highly skilled labor, reducing access to paid employment for large swathes of the population and increasing pressure on labor absorption. Third, historically established institutional differences continue to shape the distribution of human capital and productive activity, while firm-level data show that productivity growth does not always translate into employment growth. These factors interact differently across subregions and help explain why renewed industrialization in some countries coexists with persistent informal economies, premature deindustrialization in others, and uneven productivity convergence. The findings support the need for policies that link education reform to productive job creation, firm modernization, and regional transformation strategies.