Many analysts expect significant growth opportunities in the continent, which has the largest youth population in the world
December 21, 2016: Africa’s demography is showing a visible shift and many analysts have reason to believe that the continent has the largest youth population in the world. A young population is generally considered as beneficial and it is correlated with economic development. The World Bank estimates that this demographic dividend could generate 11-15% GDP growth between 2011 and 2030.
What does this demographic transition mean for Africa? Firstly, the large pool of young population creates domestic demand, which is hugely advantageous to domestic firms. Secondly, there will be a visible increase in the standard of living along with an increase in per capita income.
However, the growing young population in Africa comes with its own set of challenges. An area of concern is the lack of jobs available to young people. According to UN reports, the working age population is poised to more than double in least-developing countries, especially sub-Saharan Africa between 2015 and 2050. Consequently, many of them are forced to take up menial jobs and the continent faces high levels of underemployment.
Africa’s workforce is growing at a faster pace compared to the jobs that are available both in the private as well as public sector. Therefore, encouraging entrepreneurship is of vital importance.
Bethlehem Tilahun Alemu, founder and CEO of SoleRebels, says, “Africa must not only create jobs but challenge itself to create great jobs. Africa must create such kind of companies that young people aspire to work for.”
Investment in human capital is critical, as the young people of Africa present tremendous economic potential. A reform in the continent’s education sector would be beneficial as this would equip the youth with the skill set and technical know-how that many jobs require.
This transition has freed resources as there are fewer dependants now. The freed resources can be used to increase per capita spending on higher quality of health and education, ultimately leading to economic growth.