Merely reducing the chronic poverty that African countries face today is a challenge that places high demands on government and necessitates very effective political institutions.
In addition, over the next 35 years, African countries will also be faced with an extraordinary demographic challenge. Most countries will double their population by 2050 and there is almost nothing that can be done to change this demographic reality. The continent’s population is expected to more than double to 2.6-billion by 2050 and accounts for 57% of the world’s growth in people.
Africa’s population growth will cause most countries to become younger, a trend that will occur at the same time as the rest of the world ages. As The Economist noted: “Africans will make up a bigger and bigger share of the world’s young people: by 2100, they will account for 48% of those aged 14 and under.” Or, put differently, the world’s 10 youngest countries will be in Africa.
If properly planned for, Africa’s population increase and the resulting large number of young people present an enormous opportunity and asset. Young people are tremendous sources of entrepreneurship, energy and willingness to innovate as new technologies emerge. If young people are able to participate in their economies, being the world’s youngest continent would be a great advantage. The World Bank has estimated that the demographic dividend alone could generate 11% to 15% gross domestic product growth between 2011 and 2030.
But reaping this dividend will be extremely challenging. China only managed to provide for its large and once-impoverished population by growing its economy at 12% annually for 30 years. And the sheer scale is daunting. The International Monetary Fund has estimated that, to maximise their booming population dividend, African countries will need to produce, on aggregate, an average of 18-million high-productivity jobs a year until 2035.
To date, Africa’s job creation has not kept up with birth rates. The African Economic Outlook 2018, for example, reported that only 7% of the continental population aged 15 to 24 in low-income countries had a “decent” job. In Africa’s middle-income countries, this figure increased marginally to 10%.
Increasing economic growth will demand creating the space for the private sector to operate, and the opportunities through which it can thrive. The African Development Bank observed that “the private sector is Africa’s primary engine of growth. It generates 70% of Africa’s output, two-thirds of its investment and 90% of employment. Creating private-sector jobs is the most effective and sustainable strategy for lifting more Africans out of poverty.”
The bank also says that “Africa continues to perform poorly on standard governance indicators, scoring 30% lower than the Asian average and 60% lower than industrialised countries”. This helps to explain why Africa performs so badly in attracting foreign direct investment and thus driving diversified economic growth.
If leaders are not successful in reforming their economies, their countries will face great peril. The risks stemming from large numbers of digitally connected young people concentrated in urban areas without jobs are high, as was clearly demonstrated in the early 2010s by the Arab Spring. Young people who are pessimistic about their economic futures are unlikely to sit idly by waiting for change. They will demand it.
This is an edited extract from Democracy Works: Rewiring Politics to Africa’s Advantage by Greg Mills, Olusegun Obasanjo, Jeffrey Herbst and Tendai Biti (Picador Africa)