Invest in African youth today for a brighter tomorrow

Whether Africa’s ‘youth bulge’ will become an asset or a time-bomb will depend on the degree to which we invest, or fail to do so, in human capital today, says Hippolyte Fofack.

Policy debates concerning Africa have, over the last few years, been clouded by demographic issues often peddled by people promoting population control and a fall in fertility rates.

The UN’s projections on world population have added fuel to that debate – its prognosis that ‘Africa’s population will double by 2050’ has become a cliché. This even though fertility rates on the continent have been in long-term decline, falling by more than 36% since 1970 to 4.2 births per woman and projected to decline further to 2.1 births per woman later in the century.

It is even more disturbing that pundits are so quick to use these clichés to describe a region still reeling from the effects of several centuries of slavery and colonisation, which decimated its population.

According to most recent estimates, Africa has the lowest population density in the world, at 46 people per square kilometre, against 150 in Asia and 112 in Europe.

Financial incentives have been used to boost fertility rates in several European countries, informed by the standard model devised by Nobel laureate Gary Becker, which conjectures that demand for children responds to changes in the price of a ‘marginal child’.

Earlier this year, the Africa Progress Group, chaired by Olusegun Obasanjo, former President of Nigeria, released its annual report entitled Making Africa’s Population an Asset. The study is a welcome contribution to discussions on the relationship between demography and development in Africa.

In terms of the region’s growth trajectory, the inability to invest sustainably in young Africans and effectively deploy them to meet key development challenges, from health and security to trade and infrastructure, has been very costly.

For instance, instead of using public work programmes to expand job opportunities for young people on a continent where unemployment rates have been at Great Depression levels for decades, governments have habitually relied on international partners to build infrastructure.

One consequence of this has been the undermining of the process of learning-by-doing, which both marginalises young Africans and exacerbates the debt-trap risks associated with externally-dependent growth models.

But the costs of failing to invest in or marshal youth resources are also playing out in the sphere of public health, as evidenced by the region’s difficulties in managing the Covid-19 crisis. The pandemic has inflicted huge humanitarian and financial costs, setting the world economy on a sharp synchronised downturn, with Africa suffering its first recession in more than 25 years.

Human capital investment

But going by the Churchillian adage of ‘never letting a crisis go to waste’, the pandemic has also created huge opportunities for corporate balance sheet expansion and enhanced human capital relevance.

Countries that have successfully invested in their people and developed homegrown research and economic infrastructures have manufactured effective vaccines in record time.

These nations are reaping the benefits of sustained investment in human capital, reflected not only in stronger economic rebounds in a vaccine-powered divergent recovery, but also in return on investment, with some pharmaceutical giants making super-profits through vaccine scarcity under the banner of intellectual property protection.

Africa, which suffers from a dearth of research and economic infrastructure, did not even enter the global race to manufacture vaccines. As a result, most African nations have been sequestered on the sidelines of the global scramble for inoculations.

This reflects the global zero-sum-game mindset wherein access to vaccines has been inhibited by supply-side constraints aggravated by profit-maximisation motives, stockpiling by major vaccine-producing nations and advance purchase agreements by the world’s richest countries.

The consequences of failing to make an asset of Africa’s population are just as significant and glaring in the security arena. A continent of more than 1.4bn people confronted with insurgent transnational terrorist networks has opted to outsource its security imperatives – mostly to its former colonisers.

Rather than achieving peace and security, the result has been the expansion and entrenchment of terrorist networks across Africa and rising casualties over the last decade.

Ironically, these former colonial powers are, in juxtaposition to Africa, confronting challenges around their ageing populations. But wars are not fought by older people with what the French call ventres mous – soft bellies – but by young men and women. And Africa, the youngest continent on the planet, has plenty of them, with more than 70% of its population under 30.

But the emerging youth bulge presents opportunities as well as risks. If a large cohort of young Africans cannot find gainful employment and earn satisfactory incomes, a demographic time-bomb may materialise.

Young, disenfranchised workers will become economic migrants, leading to a long-term brain-drain, and some may resort to joining transnational terrorist networks.

Conversely, if young Africans are well-trained and sufficient opportunities are created to employ and empower them to drive endogenous growth, then the youth bulge will become a demographic dividend.

History shows that making populations an asset is the most effective route to successful demographic transitions, yielding high returns on investment and setting countries on a long growth trajectory.

The demographic dividends experienced by East Asian nations accounted for more than 20% of the remarkable economic growth achieved by that region over 1960-80.

Capitalising on their human capital – with successive governments engendering a favourable business and regulatory environment – expanded employment opportunities accelerated the process of global income convergence, and strengthened ownership of the national development process.

Over time, declining poverty and increasing life expectancy accelerated the shift from quantity to quality in procreative decisions, setting the stage for a steady fall in birth rates across East Asia.

As countries become more affluent, there is almost always a fall in birth rates, in part to meet the financial imperatives associated with a shift to quality.

The urban-rural gaps in fertility rates (with significantly lower rates in built-up areas) observable in Africa are highly correlated with urban-rural income and welfare gaps. That disparity is one factor sustaining higher-than-average birth rates in rural areas, where quantity continues to be used as a family insurance for intergenerational self-preservation.

Treated as a precious asset

In his 1968 book Asian Drama: An Inquiry into the Poverty of Nations, Gunnar Myrdal, another Nobel laureate in economics, predicted that Africa would enjoy better growth prospects than an overpopulated Asia.

At that time, the Asian youth bulge was seen as a demographic time-bomb. However, against all odds, it is Asia that achieved global income convergence, drawing on sustained investment in human capital to raise productivity and position the region as a magnet for foreign direct investment, becoming the ‘factory of the world’.

Africa’s population can play a similar role this century if it is treated and managed as a precious asset. Effectively investing in young people’s skills to raise their productivity is critical. Affording them the opportunity to learn and grow from their mistakes is also crucial for their personal growth and enhanced development impact.

They may not necessarily be the first to develop the vaccine against the next world-shaking virus, but they will be more aware of their historical responsibility and better prepared to rise to the challenge. They have risen to great challenges before such as when French President Charles de Gaulle deployed them in World War II to help free his home country (one of the chief architects of colonialism in the first ‘scramble for Africa’) from Nazi occupation.

Investing in Africa’s youth of today is crucial to the continent’s economic future. We must all play our part help to champion the full potential of the people of Africa.