A demographic giant, of course. Its population is the youngest in the world (41% of its population is under 15 years old and 19% are between 15 and 24 years old). By 2100, one third of the world’s population will be from Sub-Saharan Africa. The continent will then represent 40% of the world’s active population. 420 million jobs will have to be created to absorb this workforce by 2050, a challenge without precedent in human history.
Employment solutions in Nigeria: Nigeria EOR
But Africa is also the birth of a new major pole of global GDP, in a context where the economic center of gravity is moving away from mature economies to emerging and African countries. China and India could reach 35% of the world GDP in 2050, and Africa 10% (against 3% in 2016).
A continent with long but fragile growth
The African continent experienced sustained growth between 2000 and 2015. Today, it appears as the 2nd growth pole after Asia. Its GDP has tripled since the early 2000s, and should be multiplied by 7 by 2050 (i.e. the current Chinese GDP). These figures should not hide the fact that growth is disparate, very uneven between African countries, and subject to violent variations (a notable decline since 2015 in the main mining and oil economies of the region, due in particular to the fall in commodity prices).
Despite an impressive dynamism that has largely contributed to the emergence of an African middle class (estimated at more than 330 million people today, according to the African Development Bank), African growth is also insufficiently benefiting the vast majority of Africans: inequalities are growing (Sub-Saharan Africa has the highest level of inequality in the world after Latin America), and social indicators are improving too slowly (the HDI is at its lowest in Sub-Saharan Africa).
Environmental issues are also growing, and impact living conditions and food security. Sea level rise is a growing threat to many cities on the continent. With a warming of 1.5 to 2°C, drought and aridity will make between 40 and 80% of agricultural land unfit for growing corn, millet and sorghum by 2030-2040.
A continent with high growth challenges and high financial constraints
It is a clear statement: investments are insufficient in the face of demographic growth and the social and environmental challenges mentioned above. This is particularly obvious in the case of infrastructure: to date, 54% of the population does not have access to electricity and 61% does not have access to decent sanitation facilities. Financial flows to infrastructure ($62 billion in 2016) are insufficient compared to needs, and are unevenly distributed by country and by sector. The economy’s productivity is also very slow to improve. Economic growth is therefore far below its potential and, above all, below the needs of Africans.
Tax revenue mobilization is one of the most pressing challenges facing African countries, where the revenue-to-GDP ratio remains the lowest in the world, despite the progress made over the past 20 years. At the same time, foreign inflows, such as Foreign Direct Investment (FDI), are insufficient to fill the gap and are very unevenly distributed across the continent: only five countries (Angola, Egypt, Nigeria, Ghana and Ethiopia) host 57% of the total, while Africa receives only 3.4% of global FDI.