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Empowering African youth to create jobs, growth and peace

  • Africa is undergoing substantial demographic changes, and regional actors will have a greater say in shaping international geopolitical and economic affairs.
  • Unemployment among younger demographics is a big priority so they can drive growth rather than risk becoming a source of instability.
  • The African Continental Free Trade Area is an opportunity to create opportunities for skilled workers, commitments to which will be announced at Davos 2024, this year’s annual meeting in Davos, Switzerland.

Seismic changes are occurring in Africa. The United Nations projects that sub-Saharan Africa will account for more than half of the world’s population growth between 2022 and 2050. That means that by 2050, one in four people on Earth, and more than a third of the world’s population is expected that the young people (between 15 and 24 years old) are African. Surprisingly, during the same period, Nigeria is expected to overtake the United States as the third most populous country in the world.

Without a doubt, the projected demographic shift for Africa and the potential demographic dividend, in which a greater proportion of the population contributes to national production, will reshape and drive global economic growth. In the next era, sub-Saharan Africa is expected to account for 90% of the world’s working-age population growth, and the region’s working-age population is projected to be larger than that of India and China. This development comes against the backdrop of projected population declines in much of the world, including China, Germany and Japan.

As a result, Africa is set to play a greater role in shaping contemporary geopolitical and economic affairs. In September 2023, the African Union joined the Group of 20, the main forum for international economic cooperation. The move gives the continent the same status as the European Union, which sits alongside 19 countries including the United Kingdom, Russia and the United States.

One of the defining questions of this century is: how will Africa create jobs to cope with the population boom?

Growth and jobs for a new era

According to Afrobarometer, a non-partisan pan-African survey research network, unemployment is the top political priority that people aged 18 to 35 want their governments to address, followed by economic management. This finding is not surprising given that between 8 and 11 million young Africans will enter the labor market each year in the coming decades. However, only around 3 million new formal salaried jobs are created each year. In particular, South Africa, Africa’s most industrialized country, has one of the highest youth unemployment rates in the world, with 61% of people aged 15 to 24 unemployed.

Action is required from governments and the private sector to close the gap between the growth of the working-age population and lagging employment growth. Investment in human capital, including education and in-demand skills in the sectors driving growth, will be critical to realizing 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.

However, a Brookings report found that almost all countries in the region scored low on measuring the digital skills needed to use recent advances in artificial intelligence and green technologies.

The World Economic Forum is working 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 workforce participation, wages and leadership.

“In fact, if the region does not create the necessary jobs quickly, there is a greater risk that disaffected young people will become a source of instability in already fragile societies.” — Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum

Security and cooperation in a fractured world

Failure to take advantage of Africa’s demographic dividend could increase social fragility. According to the Global Terrorism Index, deaths in the Sahel made up 43% of the global total in 2022, compared to just 1% in 2007. Additionally, there have been 11 coups or attempted coups in the region since 2020, which has resulted in a retreat of democratic governments in the region.

The cause of the coups varies: violence, climate change, poor governance and economic challenges were among the factors driving popular unrest. On the economic front, almost one in three countries in sub-Saharan Africa are experiencing double-digit inflation and half of the region’s low-income countries are at high risk of debt distress or in debt distress.

Additionally, the region’s exports have been affected by slowing growth in China, the region’s largest trading partner and a major source of foreign direct investment. (China’s loans to Africa have fallen from a high of 28 billion in 2016 to 1 billion last year.)

However, the most important thing is that the common element of social fragility throughout the region is a restless young population with insufficient economic opportunities.

African Continental Free Trade Area

The African Continental Free Trade Area (AfCFTA) is the region’s best bet to drive structural transformation and industrialization, creating opportunities for skilled workers. The AfCFTA is the world’s largest free trade area by population, covering 1.3 billion people with a combined gross domestic product of $3 trillion. The agreement raises important opportunities for greater competition, foreign direct investment flows, economies of scale, knowledge and technology transfer, productivity and economic diversification. The challenge now is implementation.

To this end, the Forum, within the framework of the Forum of Friends of the African Continental Free Trade Area, in collaboration with the AfCFTA Secretariat, is mobilizing global businesses to support the implementation of the AfCFTA. During the 2023 Annual Meeting, this community of 40 private sector partners launched a report on how global companies can support the implementation of the trade pact.

At Davos 2024, this year’s annual meeting in Davos, Switzerland, members will launch the first private sector action plan detailing their investments and commitments under the AfCFTA.

For the global economy to grow faster, African governments, in partnership with the private sector, must act to capitalize on Africa’s youth and dynamism.

This article was published as part of the discussions at the 2024 Annual Meeting of the World Economic Forum and originally appeared on he Daily Maverick.

This article was originally obtained from the World Economic Forum.