Africa’s labour advantage could turn into a curse

AN EXPLOSION in the African working-age population will be a wasted opportunity if the continent’s labour markets cannot catch up.

Seventeen sub-Saharan African nations will rise the most in rankings of the countries with the fastest-growing working-age populations by 2050, even though they are coming from a very low base, according to the UN’s World Population Prospects. Nigeria will surpass the US with the world’s third-biggest labour force.

That stretching age bracket – 15- to 64-year-olds – gives Africans an edge in productive potential and upward mobility to lift citizens out of poverty. But harnessing it will mean delivering hundreds of millions of new jobs, and creating more robust education and training for young people.

At present, the continent is not creating jobs fast enough and employ- ment gaps stem from a lack of specialised schooling. Most Africans are unemployed, underemployed or stuck in the informal economy, and the private sector is just too small to absorb them.

While low wages should draw jobintensive industries – particularly manufacturing – away from China and Vietnam, where salaries are rising, Africa’s poor infrastructure raises the cost of doing business by so much that it negates the savings from labour, says John Ashbourne, an Africa economist at London-based Capital Economics.

Three-quarters of Africans do not have access to electricity, and even grid-connected businesses suffer regular blackouts. They often have to rely on pricier diesel generators. Moving goods is expensive because roads have potholes and are gridlocked, while ports and airports are clogged. In some cases, corruption and insecurity add to the investment cost.