Opinion
How can Africa capitalize on the current geopolitical changes?
With the abundance of resources and the rising global demand for them, Africa must manage its resources carefully. Currently, there are far too many economies in Africa that are dependent on the production and export of primary commodities. These are generating prosperity and development in other regions instead of in Africa, exporting jobs and opportunities. The continent runs the risk of marginalizing its own role in international trade if it does not add value to its commodities.
Commodity-based industrialization therefore offers the scope for value addition as well as forward and backward linkages. Ethiopia’s leather industry and Nigeria’s oil supply industry provide good yet random examples of linkages that are not only developing, but also deepening into high value added activities. Such initiatives must become the norm. Africa’s economic future will be determined by how it designs and implements effective policies to promote industrialization. There is an urgent need to address infrastructure constraints and bottlenecks; facilitate the development of the commodity sector and linkages, boost availability of unskilled and semiskilled jobs, provide job training in higher artisanal skills and deploy data driven evidence to inform planning. These all present opportunities for Africa and its partners to better collaborate without depriving Africa of the benefits of its resource boom.
Africa’s demographic dividend
Africa’s population is projected to double attaining close to 2.3 billion people over the next forty years. This will represent about half of the globe’s total population growth. Africa is also the only continent with a significantly growing youth population. Projections suggest that in less than three generations, 41 percent of the world’s youth will be African. By 2050, Africa’s youth will constitute over a quarter of the world’s labor force. By the end of the century, the continent will have the lowest dependency ratio in the world.
In addition, Africa is experiencing an unprecedented rate of urban growth. Projections indicate that between 2010 and 2025, some African cities will account for up to 85 percent of the population. This will mean a transition from a rural to a predominantly urban society, with the largest cities on the continent, Lagos (Nigeria) and Kinshasa (D.R. Congo), growing to 15 million people by 2025, and others such as Dar-es-Salaam (Tanzania) reaching 7 million. Cities in Africa generate approximately 55 percent of the continent’s total gross domestic product (GDP) relative to developed countries cities that generate approximately 90 percent of their GDP.
Being cognizant of the related challenges, such as the need to ensure essential services to cater for this phenomenon, the opportunities for economic growth, poverty reduction and human development are profound.
Approximately 54 percent of Africa’s youth is currently unemployed and more than three-quarter live on less than US$10 a day. A correlation and lessons to learn can be drawn from Asian emerging markets, where 40 percent of its rapid economic growth between 1965 and 1990 was attributable to an increase in the working age population.
