World’s fast-growing workforce gives Africa opportunity, risks

An explosion in the African working-age population will be a wasted opportunity if the continent’s labor markets can’t catch up.

Seventeen sub-Saharan African nations will rise the most in rankings of the countries with the fastest-growing working-age populations by 2050, even though they’re coming from a very low base, according to the United Nations World Population Prospects. Nigeria will surpass the U.S. with the world’s third- biggest labor force.

That stretching age bracket — 15- to 64-year-olds — gives Africans an edge in productive potential and upward mobility to lift citizens out of poverty. But harnessing it will mean delivering hundreds of millions of new jobs and creating more robust education and training for young people.

Now, the continent isn’t creating jobs fast enough and employment gaps stem from a lack of specialized schooling. Most Africans are unemployed, underemployed or stuck in the informal economy, and the private sector is just too small to absorb them. While low wages should draw job-intensive industries — particularly manufacturing — away from China and Vietnam where salaries are rising, Africa’s poor infrastructure raises the cost of doing business by so much that it negates the savings from labor, according to John Ashbourne, an Africa economist at London-based Capital Economics.

Three-quarters of Africans don’t have access to electricity, and even grid-connected businesses suffer regular blackouts, so they often rely on pricier diesel generators. Moving goods is expensive because roads are potholed and gridlocked, while ports and airports are clogged. In some cases, corruption and insecurity add to the cost of investment.

Rising incomes have led to an increasing number of African students with the means to pay for education, yet even those with university degrees often can’t find work because their skills don’t match the need, swelling the ranks of unemployed.

“While educational outcomes are improving across Africa, the results are still much worse than in potential competitors abroad, particularly in terms of technical and vocational education, which has been totally overlooked in much of Africa,” Ashbourne said. “It is difficult to see how these economies can be restructured rapidly enough to productively and efficiently absorb this sort of demographic bulge.”

In some scenarios, the opportunity of a growing workforce could actually turn into a risk. Idle and frustrated youth are a prime recruitment target for violent movements or become a burden on state services, where those exist in Africa.

African governments need to do some forward thinking — invest now and tailor their policies for the demographic shift, the World Bank said in a report last month. A key measure must be a campaign to slow population growth via lower fertility rates, which at as many as 7.6 children per woman in Africaare among the highest in the world and compare with a world average of about 2.5, according to 2013 data from the World Bank.

 – Bloomberg [Sarah McGregor]