Africa: Preparing for a new future

In the future, Africa’s growth will be increasingly driven by human capital rather than commodities

Due to rising fertility rates and lower infant mortality rates, Sub-Saharan Africa’s population is becoming larger and younger. In 10 years, the region will be home to around a quarter of the global population aged 24 and younger, General Electric says.

The change in SSA’s demographic profile is seen by many experts as an opportunity to reap the so-called demographic dividend. It is an opportunity to leverage on the expanding labor market, which according to Deutsche Bank, is set to surpass India’s by 2045 and, ultimately, be the largest in the world.

The ongoing demographic change in Africa is arguably the most important prevailing mega-trend in the continent and the one likely to impact the future in the most fundamental way. For this reason, it is imperative that Africa prepares for this change.

Preparing for a future driven by demographics is especially important for Africa for two reasons. First, it comes at a time when the demographic profiles and economic landscape of other countries are also undergoing some major shifts. The working population in Europe is declining. Meanwhile, the cost of labor is rising in China due to what economists are describe as rebalancing, which is simply a government sanctioned increase in wages in order to drive consumption. This means that the world is looking for a new factory floor where workers are in abundant supply and wages are affordable.

Africa is therefore in a position to attract many world companies in the coming years due to its growing labor pool and the affordability of labor. In the next years therefore, large scale job creation is required, as is the need to emphasize the importance and potential of education.

Sustainable development

Africa can only grow sustainably if it creates jobs for its burgeoning pool of youth. Often at times, unemployed youth are the agents of revolution, terrorism and other acts of violent disorder around the world. If Africa does not provide jobs for its growing youth bulge, it will not be able to grow sustainably and will attract disorder. Sustainable development is contingent on an inclusive model of economic development that does not marginalize large swathes of the population.

But large scale job creation needs more than just a huge and cheap labor force. Other measures need to be put in place in order to attract investment. There is a need, for instance, to bring cheap power across the continent. In areas like Kenya, for instance, manufacturers have been complaining of high energy costs. This has prompted the Kenyan government to increase its commitment to generating more power. Based on the law of supply and demand, higher supply of power leads to lower tariffs, which serves to attract manufacturers and other big firms which consume lots of energy.

Still on energy, there is a need for more reliability. Power outages are far too common, with the situation in Nigeria and South Africa (under the euphemism of load shedding) serving as great reminders. The problem with outages is that it compels firms to suffer downtimes or use standby diesel powered generators. Neither of these is cheap and the net result is that the cost of manufacturing is significantly higher for manufacturers in areas prone to power outages.


Africa must prioritize large scale job creation

There is also a need to institute reform in as far as governance is concerned. Corruption is still widespread and this acts as a hindrance to businesses. Corruption at the ports, which is still very prevalent, hinders export focused businesses or those businesses that require imported components to operate (such as vehicle assemblers). Incidentally, these are the kind of businesses that are most effective in creating large scale jobs.


Another major reform which is needed to make Africa’s huge labor force more attractive is improvements in education. Big parts of Africa’s workforce remains unskilled, and there is a need for more colleges and technical schools to generate those skills.

The need for better skills cannot be understated, particularly in today’s world where there is an ever increasing openness to free movement of labor. If skills are not improved, all the high paying jobs will go to expatriates and not locals. Perceived inequality between foreigners and locals sets the stage for a cocktail of deep and potentially troubling issues. It encourages the growth of xenophobic movements while create a permanent state of frustration among the local populace.

There is therefore a need to invest more in education; not just because it will create more jobs for the youth, but because it is critical for peace and sustainable development.


Universities need to match skills and demands in job market

Even where technical institutions and universities are there, there is a need for stronger dialogue between schools and industry to optimize the demand and supply of skills. Too many graduates end up doing courses that are not needed in their job market, ignoring the ones that are in demand. In Nigeria, for instance, the graduate unemployment rate is 23.1 percent, and in Kenya, it can take up to five years for a graduate to secure relevant employment, reports Quartz Africa.

A major emphasis on education and skills development will help Africa to adapt to the changes in its demographic profile. This is a policy position that lobbyists and economic planners need to consistently push across all government in Africa. The future of Africa is in its youth and governments need to start preparing early enough in order to squeeze the most utility out of this unprecedented demographic boom.

About the Author

Lennox is a public relations professional and seasoned writer who works with leading local and multinational brands operating in
Kenya and Africa. He is also an assistant catechist at his local Catholic parish and uses this position to sensitize members of his
community on the importance of fighting inequality. In the long-term, Lennox aspires to inspire Africans in all sectors of society to fight
all forms of inequality, as the continent is disproportionately affected by inequality when compared with the rest of the world