Unlocking Africa’s population potential

Photo: Stiftung Solarenergie

Africa could turn its growing population into an economic powerhouse, but it requires huge infrastructure investment, writes Akinwumi Adesina, president of the African Development Bank Group.

In their 2019 book, ‘Empty Planet: The Shock of Global Population Decline’, authors Darrell Bricker and John Ibbitson challenge the notion of overpopulation and instead predict a decrease in the world’s population. This prediction is borne out by growing urbanisation and advancements in education and healthcare, which have led to declining fertility and mortality rates.

Fertility rates worldwide are approaching replacement levels and are projected to decrease after 2050 (Figure 1). While this phenomenon is already evident in high-income countries, the headlines on Africa read differently. In its 2020 special report, The Economist suggested that Africa’s population will double by 2050. The Guardian in 2022 posited that, by then, ‘a quarter of the world’s people will be African.’

Figure 1. Fertility rates projected to decrease after 2050

Births per woman

Source: United Nations World Population Prospects 2022

Africa’s population is growing rapidly. The estimated annual growth rate was 2.5% in 2021. Given the trajectory, Africa’s population will double by 2050. Statistics show that the continent adds two children per mother for every child born in Asia. This dynamic demographic seems to favour Africa, with its youthful population. What does this mean for Africa’s long-term economic prosperity? And why should we be cautiously optimistic?

The relationship between population growth and economic growth in Africa is positive although weak (Figure 2). This arguably suggests that Africa could turn its growing population, if well harnessed, into an economic powerhouse in the coming decades.

Figure 2. Link between population and economic growth

Average annual real GDP growth and population growth in Africa, 1960-2021

Source: AfDB staff calculations based on the World Bank WDI database

The continent is home to a large and thriving market. It is a wellspring of emerging young tech and other entrepreneurs, of scientists, doctors and engineers. They have become emblematic of new ideas and enterprise in Africa, particularly in the tech industry.

In 2020, numerous health tech startups secured significant funding. Advancements in health data management systems and telehealth providers showcase promising developments. Tech giants like Google, IBM and Microsoft have noticed this and are already playing an important role in nurturing Africa’s innovative entrepreneurs. Microsoft Founders Hub, set to assist 10,000 African startups, with potential access to over $500m, signals a promising future for Africa’s tech-savvy youth.

These developments highlight Africa’s immense potential and its integral role in the global digital revolution.

Reasons to be cautious

Africa’s labour force, however, is not matching the overall increase in its population. At 2.7%, the average growth of Africa’s workforce since 1990 was barely one-fifth of a percentage point above overall population growth. This implies a high dependency ratio, currently estimated at about 80%, compared to the global average of 55%.

If the workforce had grown in proportion to the working-age population, it would have contributed an additional 0.13 percentage points to Africa’s per capita income growth. To put this in perspective, per capita income would have been $92 higher than the actual value in 2022. This would have resulted in an additional $47bn to Africa’s GDP – roughly equivalent to the size of Tunisia’s economy in 2021.

Rapid population growth puts a strain on Africa’s infrastructure. Inadequate infrastructure hinders productivity. Research has shown that poorly maintained roads, railways and ports lead to a 30% to 40% increase in the cost of traded goods between African countries.

‘Statistics show that the continent is adding two children per mother for every child born in Asia. This demographic dynamic seems to favour Africa, with its youthful population.’

It is therefore crucial for policy-makers to start thinking about addressing the adverse impact of population pressure while making greater efforts to expand basic infrastructure. Coupled with improved economic governance and closing the financing gap, this could be transformative for the continent.

Higher population growth exacerbates the effects of climate change. In a 2019 study, researchers found that increasing population pressure was the most significant factor causing damage to nature across Africa, especially in densely populated areas. Another study found that the impact of population on carbon emissions is nearly seven times greater than the impact of income per person. This means that a 1% reduction in population growth could lead to a nearly 7% increase in per capita income, while reducing carbon emissions.

Africa’s historical and current carbon emission share is below 3% of the global average. Notwithstanding this fact, Africa is at the forefront of climate change initiatives, including the promotion of climate-compatible investments, green agriculture and clean energies.

At the African Development Bank, we are committed to taking on this challenge and leading the continent towards climate resilience and a just energy transition.