To be sure, Africa’s projected shift in population and the potential demographic dividend, in which a higher proportion of the population contributes to domestic production, will both reshape and drive global economic growth. In the coming era, sub-Saharan Africa is expected to account for 90% of the growth in the world’s working-age population, and the region’s working-age population is projected to be larger than that of both India and China. This development is in the context of projected population declines in much of the world, including China, Germany and Japan.
As a result, Africa is set to play a bigger role in shaping contemporary geopolitical and economic affairs. In September 2023, the African Union joined the Group of 20, the premier forum for international economic cooperation. The move gives the continent the same status as the European Union, which sits alongside 19 countries, including the UK, Russia and the United States.
According to Afrobarometer, a pan-African, non-partisan survey research network, unemployment is the top policy priority that 18 to 35-year-olds want their governments to address, followed by economic management. This finding is unsurprising given that between 8 million and 11 million African youth will enter the labour market every year in the coming decades. Yet, only about 3 million new formal wage jobs are created yearly. Notably, South Africa, the most industrialized country in Africa, has one of the highest youth unemployment rates in the world, with 61% of people aged 15 to 24 unemployed.
Action from governments and the private sector is required to close the gap between the increase in the working-age population and lagging job growth. Investment in human capital, including education and skills demanded in growth-enhancing sectors, will be critical to realize this potential. The good news is that young Africans are increasingly better educated – 44% graduated from high school in 2020, up from 27% in 2000.
The World Economic Forum collaborates with governments to help close the skills gap. The Closing the Skills Gap Accelerators in South Africa and Nigeria aim to create national public-private collaboration platforms to address skills gaps and reshape future education and training. The Gender Parity Accelerator with the Government of Kenya aims to close gender gaps in labour force participation, wages and leadership.
A failure to harness Africa’s demographic dividend could increase social fragility. According to the Global Terrorism Index, deaths in the Sahel constituted 43% of the global total in 2022, compared to just 1% in 2007. Moreover, there have been 11 coups or attempted coups in the region since 2020, resulting in a backslide of democratic governments in the region.
The cause of the coups varies: violence, climate change, poor governance and economic challenges were among the drivers of popular unrest. On the economic front, almost one in three countries in sub-Saharan Africa is experiencing double-digit inflation and half of the low-income countries in the region are at high risk for or in debt distress.
Furthermore, exports from the region have been affected by the deceleration in China’s growth, the region’s largest trading partner and a major source of foreign direct investment. (China’s loans to Africa have declined from a peak of 28 billion in 2016 to 1 billion last year.)
Critically, however, the common element for social fragility across the region is a restless youth population with insufficient economic opportunities.
A Guest Editorial