Africa’s Youthful Rise: Demographic Shift to Drive Global Economic Growth
Africa is on the brink of a major demographic shift that is set to profoundly impact global economic growth. According to projections by the United Nations, sub-Saharan Africa is expected to account for over half of the world’s population growth between 2022 and 2050. By 2050, it is estimated that one in every four people on Earth will be African, with more than a third of the world’s young population falling within the age range of 15 to 24 years.
This demographic shift holds immense potential for Africa to reshape and drive global economic growth. The continent is projected to contribute 90% of the growth in the world’s working-age population in the coming era. In fact, the working-age population of sub-Saharan Africa is expected to surpass that of India and China. This comes at a time when many other regions, including China, Germany, and Japan, are experiencing population declines.
With Africa poised to play a more significant role in shaping global geopolitical and economic affairs, the question arises: How will the continent create enough jobs to meet the surge in population?
Unemployment ranks as the top policy concern among African youth aged 18 to 35, according to a survey by the pan-African research network Afrobarometer. With millions of young Africans entering the labor market each year, formal wage jobs are not keeping pace with the growing workforce. Even South Africa, the most industrialized country in Africa, faces a high youth unemployment rate of 61% among those aged 15 to 24.
Addressing this challenge will require action from both governments and the private sector. Investment in human capital, including education and skills relevant to growth sectors, will be essential to unlock the continent’s potential. While there has been progress in terms of education, with 44% of young Africans graduating from high school in 2020 as compared to 27% in 2000, a Brookings report highlights the need to improve digital skills. Digital literacy is crucial for leveraging advancements in artificial intelligence and green technologies.
Recognizing the urgency of bridging the skills gap, the World Economic Forum is partnering with governments to establish public-private collaboration platforms in South Africa, Nigeria, and Kenya. These initiatives aim to address skills gaps, reshape education and training, and promote gender parity in the labor force.
Failure to harness Africa’s demographic dividend could lead to increased social fragility. The Sahel region has witnessed a significant rise in deaths and a surge in coups or attempted coups. The restlessness of the young population, compounded by factors such as violence, climate change, poor governance, economic challenges, and lack of opportunities, poses a risk to stability. Young Africans have shown less trust in government institutions and leaders, making it crucial to create economic avenues that alleviate their discontent.
One potential driver of structural transformation and economic diversification is the African Continental Free Trade Area (AfCFTA). With a population of 1.3 billion and a combined GDP of $3 trillion, the AfCFTA presents opportunities for increased competition, foreign direct investment, and knowledge transfer. However, the challenge lies in effective implementation.
To support the implementation of the AfCFTA, the World Economic Forum and its partners are mobilizing global business to collaborate with the AfCFTA Secretariat. Their aim is to drive investments and commitments under the trade pact, promoting economic growth and capitalizing on Africa’s youthful population.
In conclusion, Africa’s demographic shift signals a significant opportunity for the continent and the world. Nevertheless, addressing the challenge of job creation and leveraging this demographic dividend will require concerted efforts from governments, the private sector, and international collaboration. By investing in education, skills development, and the implementation of initiatives like the AfCFTA, Africa can drive sustainable economic growth and shape its destiny on the global stage.
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