By Eric Vandenbroeck
and co-workers
In recent decades,
the engine of the world economy has been the spectacular growth of China. From 1980
to 2020, fully one-quarter of the increase in global GDP was due to China’s
growth, outstripping the contributions of the United States (22 percent), the
European Union (12 percent), and Japan (4 percent). From 2010 to 2020, when the
United States and Europe were still recovering from the Great Recession, the
world was even more dependent on China; in that decade, China’s growth
accounted for over 40 percent of the rise in global GDP.
China’s success story
had much to do with the demographic profile of its enormous population. The
country’s glut of young workers, eager to explore new opportunities in cities
and special economic zones, powered the global economy. But that demographic
advantage has now all but evaporated. China’s population is aging, and soon the
country will see a shortfall in the workers it once had in abundance.
As China wrestles with this challenge in the coming years, its
economy is expected to slow down. The world will no longer be able to depend on
China to power its growth.
What new engine of
growth will fill the role that China has played in the last 40 years? India is
often touted as the “next China,” but that remains an unlikely prospect because
India will soon face many of the same demographic constraints now hobbling its
fellow Asian giant. Instead, the world will have to look to the continent of
Africa.
The most
recent UN estimates project that Africa’s population, driven by
falling mortality and high fertility, will grow from 1.4 billion today to 2.5
billion by 2050. With China, Japan, Korea, and European countries likely to
experience a sharp decline in young workers, the world economy is set to slow
sharply unless it receives a productivity boost from the billion young people
added to Africa’s population in the next quarter century. The dynamism of
Africa’s youth is central to the future of the
global economy.
The Baby Bust
In the next 30 years,
China will have to deal with harsh demographic trends. Thanks to its
one-child policy, which has driven down births since 1980, the Chinese
prime-age workforce will fall by 40 percent from its 2010 peak by 2050,
declining by 300 million workers. The existing workforce will grow, and the
population of seniors 65 and older will double. There is virtually nothing that
China can do about this: even a sudden increase in births next year would do
little to reshape the labor force for at least 15 to 20 years.
All eyes have,
therefore, turned to India, whose population has just overtaken China. Yet this
optimism is misplaced, as it overlooks the reasons for India’s continued
population growth: not high fertility, but longer life expectancy. India has an
extraordinary number of young workers, but its population, like that of China,
is growing older. Just as in China, India’sbirth rate
has plummeted, with fertility falling from four children per woman in 1990 to
just two today. India’s population of 15- to 24-year-olds—the more educated
youth cohort that will drive rapid productivity growth—peaked in 2021 at 255
million and is projected to decline by 15 percent, or 40 million, by 2050.
The United Nations
estimates that India’s population of 1.43 billion will increase to 1.61 billion
by 2040, a gain of 180 million people. But prime-age workers between 15 and 49
will make up less than one-quarter of that increase, accounting for just 43
million people. Meanwhile, the number of Indians who are aged 60 or older will
increase by over 100 million between today and 2040, more than twice the size
of the prime-age workforce. That is hardly a recipe for rapid economic growth.
After 2040, India’s prime-age workforce will decline, joining China in this
downward trend.
Many other countries
are grappling with this problem. Over the next 20 years, most of the world will
face declining youth cohorts and shrinking labor forces while caring for an
exploding number of seniors. With total fertility rates ranging from 0.8 to 1.3
in East Asia, from 1.5 to 1.7 in Europe and the United States, averaging
1.9 in Latin America, and now dropping to 2.0 in India, there is virtually no
region of the world in which a rapidly aging population and a dwindling number
of young people will not be dominant features of the next several decades.
The Outlier
Except for Africa,
that is. Fertility in Africa, at 4.3 children per woman, is roughly twice that
of the rest of the world. That high fertility rate reflects, at least in part,
a lack of access to education. Many demographers expect fertility to decline
dramatically if quality secondary education becomes universal for African
women. But at present, African countries have some of the world's lowest
secondary school enrollment figures, especially for women. According to
the World Bank, only four in ten women of high school age in sub-Saharan Africa
are enrolled in secondary education. In half of Africa’s 54 countries,
including significant states such as Angola, Ethiopia, and Uganda, less than
one in five women have completed secondary education; in 11 states, including
Ghana, Mozambique, and Niger, it is less than one in ten.
But those high
fertility rates are turning African countries into the world’s last excellent
harbor of young people. One out of every three children born worldwide will be
held in Africa this year. In 2040, as a result, one of every three people in
the world between the ages of 15 and 24 will be an African. By 2050, the
prime-age working population of Africa will be five times as large as that of
Europe and more significant than that of India and China combined.
Another way to view the coming decades is to note that the world’s prime-age
working population will increase by 428 million between 2020 and 2040. Of that
increase, 420 million will be in Africa; 8 million will be the net increase in
that age group in the rest of the world. In the coming era, African youth will
account for 98 percent of all the net labor-force growth in the world.
In the West, these
data and projections are often used to arouse fear of uncontrolled immigration
and of Europe being overwhelmed or transformed by non-Europeans. That is a
rather unfortunate way of seeing the continent. Africa’s youth are not a threat
but a remarkable opportunity upon which the prosperity of the entire world
depends.
It is important to
recall that in 1980, China was desperately poor and even less developed than
Africa is today. China’s 1980 GDP of $423 billion was barely more significant
than that of the Netherlands, and its GDP per capita was $431 per year,
just half of Ethiopia’s today. Over the next 40 years, China expanded its
prime-age working population by over 200 million people, equipped them with the
tools to be more productive, drew in global investment, and expanded its
economy 30-fold. In 20 years, African countries will increase their prime-age
working population by 400 million workers. If over the next 40 years, even half
of them achieve the same productivity gains as China (or all of them achieve,
on average, half of China’s productivity gains), Africa would increase its GDP
15-fold, a profit of $52 trillion, which would produce a 60 percent increase
over the world’s total GDP in 2021.
Of course, it's
unlikely that the 54 diverse countries on the continent could together produce
a productivity miracle like China's. But in 1980, the idea that communist China
would soon have an economy rivaling Europe or the United States would have
seemed ridiculous. At the same time, Bangladesh was dismissed as a hopelessly
overcrowded and impoverished “basket case,”; yet Bangladesh, despite lacking
any of the natural and energy resources that Africa has in abundance, has grown
its GDP fivefold in the last 30 years; its GDP per capita is now greater than
India’s. If Africa can achieve even Bangladesh-level growth over the next 30
years, it would add $15 trillion to the global economy—about the same
contribution as China made from 1980 to 2020.
Such rates of growth
are not fantastical. From 1980 to 2020, sub-Saharan Africa tripled its GDP from
$600 billion to $1.9 trillion. From 2000 to 2020, Nigeria nearly tripled its
GDP; Ethiopia’s has grown fivefold. If these countries can build on this
performance and carry other African economies with them through greater
regional integration, a generation of young Africans can create a global boom.
No other region of the world can produce anything like the potential growth of
Africa.
Greener On The Other Side
The world economy
needs Africa’s economic growth, but it also needs Africa to take a different
path than China. The Asian giant followed the West’s pattern of early
industrialization: proliferate and dirty and worry about the consequences
later. Driven for years by coal, China’s economic success has also been an
environmental disaster. Since 2005, China has been the world’s largest emitter
of greenhouse gases. Although Africa’s carbon emissions today are tiny, its
development could rapidly add dangerous levels of greenhouse gases to the
atmosphere, undoing the benefits of reductions made by other countries.
Growth in Africa must
be clean in terms of generating energy and not despoiling the continent’s
landscape and natural resources. Fortunately for Africa, the continent has
plentiful hydro, solar, wind, tidal, and geothermal power sources. It can also
reap the benefits of technological advances that have lowered the price of clean
energy by an order of magnitude from just a decade ago. Indeed, in most places,
renewable power is now cheaper than burning coal. New methods of
large-scale energy storage, from stored hydropower and pressurized
gas to improved batteries and capacitors, will soon make it possible to
overcome the intermittency problems that plague solar and wind power.
African leaders already
recognize the need for clean development. The Kigali Communiqué, “Ensuring a
Just and Equitable Energy Transition in Africa,” signed by ten African
countries in May 2022, and the African Common Position on Energy Access and
Just Transition, led by the African Union Commission, both present a vision for
Africa’s energy future of development and job creation based on clean energy,
powered by sustainable electricity production. With sufficient support from
multilateral and external sources, including private investment, African
leaders will be able and willing to pursue this vision.
The energy and
environment expert Kelly Sims Gallagher has suggested establishing a Green
Bank, an institution similar to the World Bank that would specialize in
financing green energy projects in developing countries with grants and
low-interest loans. Today, most efforts to tackle climate change focus on
reducing the emissions of the largest greenhouse gas producers. Although those
reductions are essential, they will also be futile unless the world’s
fastest-growing populations and rapidly growing economies find a cleaner path.
A Vital Africa
Outsiders looking at
Africa today must look past (but not overlook) the obstacles to growth. Indeed,
much development aid to Africa has largely been wasted, but that is because
support has often been directed to projects designed to promote leaders'
interests rather than bottom-up market-driven investments that meet local
demands. China’s experience has shown that specific measures work: carving out
special economic zones; focusing on education, infrastructure, education,
and international competitiveness; and building a government that holds local
officials accountable for the disorder but also rewards them for presiding over
economic growth. African countries must work together to create a more
integrated institutional climate that attracts private investment from abroad.
Charitable foundations, such as the Bill & Melinda Gates Foundation, have
shown, for instance, that relatively small amounts of money, carefully spent,
can produce great results in improving public health. Funds to support
secondary education and improve its quality—whether from charitable foundations
or governments—can pay similar dividends. But the global private sector will
have to make investments that create jobs in tourism, services, light
manufacturing, heavy industry, design, entertainment, retail, shipping,
publishing, communications, and finance.
Of course, the
greatest obstacle to Africa’s growth has been internal conflicts, from civil
and regional wars to genocides. Ethiopia’s recent war in Tigray may have
killed three-quarters of a million people, far more than in the war in Ukraine.
More vigorous diplomacy is needed to prevent, or more quickly end, the
conflicts that are slowing growth. Leaders of African countries must also
forsake pecuniary self-interest for that of the greater good. Japan, South
Korea, and Taiwan did not succeed economically without overcoming corruption
and dictatorship. Still, in all these countries, leaders came to recognize that
there were more significant gains to be had in prioritizing the country's
growth as a whole rather than simply appropriating a slice of the current
economy for their family, clan, or region. National unity and compromise among
leaders are vital for growth; leaders who recognize this will see their
economies pull away from their neighbors and attract talent from across the
continent—and capital from around the world.
For too long, Africa
has been seen through the lens of its recent past rather than its potential
future. Demographic trends are now placing Africa front and center as the one
region that can sustain global growth. Africa demands everybody’s attention,
not just to support it but because it is vital for the world.
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