Leveraging Africa’s Demographic Dividend - African Business Magazine
Leveraging Africa’s Demographic Dividend

Leveraging Africa’s Demographic Dividend

Africa’s surging population growth could lead to social unrest and stalling economic development, unless the continent’s leaders can articulate new strategies to create productive jobs and build globally-relevant skills bases to drive their economies, says Babatunde Osotimehin, the executive director of the United Nations Population Fund.

Just as ‘Africa Rising’ has become a clichéd shorthand for the continent’s sustained economic growth over the past 15 years, so too has ‘demographic dividend’ become a neat oversimplification of the complex population dynamic shaping economies and societies.

While other regions’ population growth slows, Africa’s continues to surge. The Population Research Bureau estimates that by 2050 the continent’s population will double to 2.4bn people. This demographic bulge is mostly young. The 10 to 24-year-old age bracket comprises more than 30% of almost all sub-Saharan African nations.

While European and more developed East Asian countries struggle with ageing populations and the concomitant challenges of higher pension and social care liabilities and falling productivity, African nations have to actively build labour intensive economies and education systems to absorb the huge new labour pool.

“If Africa does what it has to do and does it well, Africa could be the continent that provides the workforce for the world,” says Babatunde Osotimehin, the executive director of the United Nations Population Fund.

If not, social stability and progress could be undermined, and the demographic dividend could become an anchor, Osotimehin warns. Building inclusive societies that allow young people to enter the workforce, generate wealth and participate fully in their political systems has to be the priority of African governments, he says.

“I think nobody expected what happened to Tunisia to happen. We have to be mindful that once there is no inclusiveness there is always a chance that it could lead to a breakdown in human security,” Osotimehin says. “Governments have a responsibility to make sure they are inclusive. I know it is difficult but I think that one of the things that we have to do is to make sure that we empower civil society so that they are able to advocate for this, and actually point to governments that this is the right thing to do.”

GDP growth is not enough on its own. World Bank statistics show that poverty reduction in Africa has not kept pace with economic expansion — as it did in much of emerging Asia, the closest analogue to the combined demographic and economic growth that Africa is now experiencing. Globally, youth unemployment is high, but in Africa there is an acute shortage of full-time, stable jobs. According to research from the McKinsey Global Institute, 63% of the African workforce is in vulnerable employment, and only 28% are in full-time, stable jobs.

Asia’s ‘Tiger Economies’ turned their youth boom into broad-based poverty reduction, principally by investing heavily in skills and human capital. African economies need to do the same, Osotimehin says, which will mean shifting the focus from extractive industries and primary commodities towards skills-based sectors.

“I think that every country is unique, and I think that the circumstances of every country will determine the policies that will work,” he says. “But if, for example, we look at the countries in sub-Saharan Africa that are doing well, they’re doing well because of commodities. Now, if we can persuade them to reinvest some of the profits in building human capital, then we’ve done it.”

Although governments in Africa are talking about youth empowerment, Osotimehin says, few are engaging with the issue “on an intellectual level”. Fewer still are actively building social structures and targeting interventions to expand their talent pools, a symptom, he says, of political shortsightedness.

“The problem that I find is that we don’t have statesmen anymore, we have politicians. They are always looking to the next election,” he says. “We don’t have long term plans to make things happen in a totally different way. We need to get politicians to look beyond their four year, five year term to reconfigure the system… to address these inequalities.”

To read the full special report on World Economic Forum, 2015 please click here

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