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Future trends for Africa
November 26, 2017, 2:13 pm
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A new report from the Institute for Security Studies (ISS) notes that opportunities for progress abound in Africa, but governments need to make more strategic investments to improve development prospects for all on the continent.

Aside from conflict management and resolution other key trends to understanding how Africa's future could unfold over the coming decades are:

Africa's population will continue to grow rapidly and remain the youngest in the world: Africa's population is expected to increase from about 1.2 billion people today to over 1.8 billion in 2035. The demand for services will increase dramatically and put African governments under considerable stress. Besides these sheer numbers, the age structure of Africa's population is critical. Even in 2035, half of sub-Saharan Africa's population will be under 21, which means governments need to spend heavily on education, healthcare and extending basic services.

As Africa's population ages, the ratio between workers and dependents will improve - leading to a potential boost in productivity and economic growth. However, Africa's poorer economies are several decades away from experiencing a demographic dividend — and more importantly, most lack the necessary investments in human capital and job creation to capitalize on it.

Levels of urbanization will keep rising, offering both opportunities and risks: Many African countries are unlikely to reap the potential benefits of urbanization unless they systematically address some of the structural hurdles, such as lack of job creation, slow economic transformation to higher productivity sectors, poverty and inequality.

Absolute number of Africans living in extreme poverty is set to increase: On the current trajectory, population growth is likely to compound poverty in sub-Saharan Africa as it is outpacing economic growth. By 2035, as many as 170 million more Africans could live in extreme poverty (less than US$1.90 a day) than today. This is if the continent's economy grows on average around 4 percent per year to 2035.

Africa's economy will continue to expand, but countries' individual performances will vary greatly: Overall, African economies need to grow much faster and make more strategic investments in human capital to reduce poverty, improve development outcomes and build adequate infrastructure.

Much of Africa is likely to remain vulnerable to global shocks. Its oil and metal exporters will continue to be the most exposed to global price volatility. Growth in non-hydrocarbon-dependent economies — energy importers and agricultural exporters — is likely to remain stable. Current and expected growth rates for some of Africa's agricultural exporters are in line with Asia's fastest-growing economies.

To improve resilience against external shocks, African states need to diversify their economies and tax base, raise revenue more effectively, increase productivity, create jobs and invest in critical infrastructure and the development of human capital.

Africa is likely to remain relatively isolated - both from the global economy and across its regions: African countries also need to dismantle some of the regulatory barriers to deeper integration to facilitate the movement of goods, people and ideas across borders and create regional economies of scale. Failing that, Africa will remain isolated, both from the global economy and across its regions.

Africa's ability to participate more in regional and global trade partly depends on improving transportation and trade infrastructure and streamlining regulations. That said, a strategy to connect Africa must also include investment in basic infrastructure, such as access to clean water, electricity and improved sanitation. These services are key components of productivity and hence growth.

Modern technology may offer a way to replace costlier forms of more basic infrastructure. However, leapfrogging the construction of roads, water supply or sewerage facilities, for example, is simply not possible.

While the challenges may seem overwhelming, the study from ISS also points to areas that African governments could leverage to capitalize on the enormous potential that exists on the continent.

 

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