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The author is the chairman of Rockefeller International
The global baby bust has slowed growth in every major economy, from China and Japan to Germany and the United States. However, the other side of this story is not told. Even countries whose economies could still receive a major boost from population growth are failing to do so.
The biggest problem for global growth is Africa, which is currently home to 1.5 billion people. By the 2030s, one in three people in the workforce will live on the continent. If the global economy as a whole is to grow faster, Africa needs to find ways to employ these workers productively and take advantage of the demographic dividend. But in most African countries, that is not happening.
My research shows that a working-age population growth rate of at least 2 percent is a prerequisite for “miracle” economic growth, implying a sustained pace of at least 6 percent. In 2000, there were 110 countries with such rapid growth in working-age populations, nearly half of which were in Africa. Currently, that number is just 58, and more than two-thirds of them, 41 of them, are in Africa.
If Africa had been able to capitalize on population growth comparable to East Asian miracle economies such as South Korea and Taiwan, Africa's share of the world economy would have been at least three times what it is today (only 3%). . And the global economy will grow much faster than the recent average of 2.5%.
Over the past five years, only three of Africa's 54 countries have grown by more than 6% per year: Ethiopia, Benin, and Rwanda. This is down from 12 cases in the 2010s. No African economy has seen a dramatic increase in average per capita income, and half of the continent's five largest economies have seen it decline, including three of the continent's largest economies: Nigeria, South Africa and Algeria.
Africa is increasing its workforce, but output per worker is not increasing. Asia's economic miracle has boosted output per worker by moving farmers into manufacturing, where manufacturing's share of the global economy has shrunk, leaving few clear paths to productivity growth. Ta.
While former manufacturing powerhouses such as Taiwan have moved into the high-tech sector, hopes that African countries will be able to “leap forward” beyond the manufacturing stage directly into the digital age have not materialized. Some tech investors are trying to create a buzz about the same digital opportunities in Africa they were talking about a decade ago: internet providers here, mobile banking services there. Similarly, hopes that the service industry might offer an alternative route to prosperity have not materialized.
China and other Asian powers were also once dismissed as “basket cases,” but their economic rise has made cultural explanations for any country's failure to prosper nonsensical. However, a combination of increasingly difficult global conditions and domestic dysfunction continues to threaten to stifle Africa's potential. In the 1960s, average worker productivity in Africa was nearly 50% higher than in East Asia. Currently, the productivity of the typical East Asian worker has tripled.
One reason is leadership. Fourteen of the world's 20 most corrupt governments are in Africa, up from 10 in 2010. In Asia, powerful rulers led the region's postwar rise to prosperity. In Africa, the powerful tend to just perpetuate themselves without creating the basic conditions (roads, railways, decent public schools) to increase production.
Botswana, once the continent's most promising country, has failed to find a way to diversify beyond diamonds, and economic growth has languished at less than 3 percent. And in Nigeria, which may have effectively been the United Arab Emirates, average incomes have fallen over the past five years, despite a booming oil-fueled economy.
When I recently visited Kenya, China's role in building the country's basic infrastructure was visible everywhere, from the arched towers spanning new highways to the elevated railways running through national parks. However, economic growth remains disappointing and Kenya is struggling to repay loans to China that financed new projects. Frequent power outages show that investment in Kenya, like many other countries on the African continent, remains severely lacking.
Over the next 30 years, the world's working-age population will increase by 2 billion people, and almost 80% of those workers will come of age in Africa. That effectively means that the vast continent is the last and greatest hope for an economic miracle. However, unless this is achieved, global economic growth will continue to slow due to demographic trends in other regions.
Letter in response to this article:
The challenge of improving productivity is not limited to Africa / Zainab Usman, founding director of the Africa Program at the Carnegie Endowment for International Peace (Washington, DC, USA)
Small families and increased savings – Africa lacks both / Charlie Robertson, London W1, UK
