Africa has a demographic advantage.

Rapid population growth is presenting Africa with significant economic opportunities but also poses profound structural challenges.

Africa's working-age population is projected to surpass the combined workforce of India and China by 2040. (Image: The Youth Cafe)

Africa is currently home to 1.6 billion people. According to the United Nations Economic and Social Affairs Bureau, the continent's population is projected to reach 2.5 billion by 2050, making it the fastest-growing region in the world.

For decades, population growth was considered a constraint on Africa, but according to the African Development Bank and the UN Economic Commission for Africa, by 2040, the continent's working-age population is expected to surpass the combined workforce of India and China. Meanwhile, cities like Nairobi (Kenya), Lagos (Nigeria), Accra (Ghana), and Dar-es-Salaam (Tanzania) will rapidly evolve from administrative centers into thriving labor hubs and consumer markets. The World Bank estimates that around 44% of Africa's population currently lives in urban areas, a figure projected to reach 60% by 2050.

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According to experts, while Africa has a demographic advantage, it lacks the institutional framework to translate that advantage into a driver of sustainable growth. “One of the most significant challenges is that many countries and city governments are unable to plan ahead for population pressures, manage land, finance infrastructure development, and view the informal economy as part of the productive economy rather than something to be controlled,” said Mandipa Ndlovu, a researcher at Leiden University (Netherlands).

For a long time, East Asia's industrial rise has been built on a foundation of land reform, export-oriented production, and the effective operation of the private sector in the region. In his book "How Africa Works," published earlier this year, author Joe Studwell writes that development often begins in rural areas. Accordingly, increased productivity by smallholder farmers creates surpluses that can be reinvested in industry. Studwell emphasizes that every successful industrialized nation, from Japan to South Korea, began with land reform and agricultural transformation. However, agricultural productivity in sub-Saharan Africa remains low. According to the UN Food and Agriculture Organization, average grain yields in the region are only about 1.5-2 tons per hectare, much lower than the 4 tons per hectare in South Asia.

Against this backdrop, several African nations are striving to implement structural reforms, such as Ethiopia and Rwanda. And trade integration is considered crucial to this transformation. Aiming to create a common market for billions of people with a combined GDP of approximately $3.4 trillion, the African Union established the African Continental Free Trade Area.

However, to achieve the same level as East Asia, Africa needs to develop labor-intensive industrial production such as textiles and footwear, geared towards exports. Foreign investment is seen as a way to accelerate this process. Currently, there are around 10,000 Chinese companies operating across Africa, one-third of which are in manufacturing, creating numerous jobs, such as in Ethiopia's textile industry. “Africa’s growing population means the region has the potential to become one of the world’s most attractive investment destinations, but the benefits are not evenly distributed among countries. Therefore, countries need to do more to ensure that foreign investment strengthens local capabilities,” said Chris Edeygu, senior analyst at the risk management consulting firm Africa Risk Consulting.

According to the United Nations Industrial Development Organization, the manufacturing sector accounts for only 10-12% of the GDP of sub-Saharan Africa, significantly lower than in industrialized economies.

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Source: https://baocantho.com.vn/chau-phi-truc-loi-the-ve-dan-so-a207138.html