Global Journal of Emerging Market Economies

This article offers a vision of what Africa could be in 2050. In such a scenario, average per capita income would increase six-fold, an additional 1.4 billion Africans would join the middleclass, the number of poor would shrink to fewer than 50 million, and Africa’s share of global gross domestic product (GDP) would triple. For people, the biggest change would be better, less vulnerable jobs with higher productivity; for economies, dramatic productivity increases driven by private sector investment, diversification, and more competition; and for the continent, better integrated sub-regions and relations with the world based on trade and investment rather than aid. In the face of a multi-polar global economy, aging and population growth, increased competition for natural resources, rapid innovation, climate change, urbanization, and natural resource wealth, Africa needs to manage the risk of fragility and conflict, inequality, and the middle-income trap to achieve such a vision.

Like many other countries worldwide, Africa faces a rapidly increasing elderly population; however, most African countries also still have very high levels of fertility, high rates of population growth, and very young populations. This means African countries will have to address the doubling or even the tripling, by 2050, of their working-age population and better prepare for the future of their upcoming young generations, while aiming for a “modern” demographic regime of low mortality and low fertility. Such a regime would put African countries in a position to capture a demographic dividend, realize inclusive growth, reduce poverty levels, and achieve economic convergence. Socioeconomic advances help foster demographic transformations, and improvements in demographic indicators also help trigger socioeconomic advances, but this process is not automatic. Authorities will need to intervene swiftly on mortality, and particularly on fertility, through adequate population and health policies and programs.

This article discusses the imperative of a major scaling up of human capital in Africa as a prerequisite for economic transformation. Sustained economic growth cannot be driven by improved macroeconomic policies, greater political stability, improved business climate, and growing global interest in Africa (primarily driven by commodities) alone. This article presents a vision of 2050 in which more African students enroll and complete school, African universities are leading global research centers of excellence, and Africans would be healthier and living longer as a result of better nutrition and healthcare, higher incomes, and drastically reduced poverty. It highlights the opportunities and challenges that African countries face in making what would amount to a quantum leap in raising levels of human capital and outlines some promising approaches toward achieving that objective.

Despite economic growth, a large number of Africans continue to live in poverty and experiences high levels of income and opportunity inequality. Not only does inequality dampen the poverty reduction impact of growth, lower the growth rate, hollow out the middle class, encourage corruption and rent seeking, increase crime and violence, and undermine social stability, but it also precludes sustained growth. Access to education, power supply, health services, and water and sanitation are critical to improve the lives of all Africans, especially girls and those in rural areas. In this area, public spending and government transfers can only go so far—the voice of Africa’s poorest citizens needs to be heard by policymakers. While maintaining central government oversights, appropriate steps should be taken to increase participation of the beneficiaries of public services.

African economies face two challenges in the future: weathering possible downturns in demand and prices of commodities; and creating a large number of jobs for the continent’s booming working-age population. High global demand for the continent’s natural resources, macroeconomic reform, foreign aid inflows, and concessional debt relief have helped African economies grow and ride out the financial crisis, but growth remains vulnerable. To continue to develop, African economies need to turn to high-productivity, job-intensive activities such as agro-processing, manufacturing, and services. Exports need to increase, and the private sector needs to be stimulated by, among other things, curbing anti-competitive behavior, improving infrastructure and financial services, and reducing the burden of regulatory requirements. Investing in education, technology, innovation, and entrepreneurship is key to realizing gains in productivity and competitiveness.