Several other factors contribute to low formal employment. 1) Education may be expanding, but
fail to impart useful skills (Page 2012; African Development Bank 2012), creating a mismatch
between worker skills and employer needs. 2) Rapid population growth exacerbates the excess
supply of labour in Africa (Fox et al. 2013), offsetting the effects of output growth. To some
extent, however, Africa’s failure to experience a demographic transition reflects the lack of
structural transformation so cause and effect are difficult to distinguish. 3) wages could be driven
up by Dutch Disease effects in some natural-resource abundant countries driving up wages, but
this cannot explain why informal sector labour incomes are so low relative to formal-sector
wages. Moreover, natural resource abundance does not necessarily preclude labour-intensive
manufacturing exports, as Malaysia and Indonesia have shown (Fox et al. 2013).