Africa leapfrogging won’t solve africa’s economic woes – allafrica.com electricity laws uk

In the report he says that sub-Saharan African economies are shifting from low-productivity agriculture to only slightly more productive employment in services, mostly informal retail and wholesale trade. The productivity of these new services workers is low, Cilliers writes. And the shift may even be reducing growth because the informal services sector is absorbing so many workers from other, more productive sectors.

Leapfrogging does present an opportunity for Africa, Cilliers says. But only to the extent that the Fourth Industrial Revolution – ‘the fusion of technologies that is blurring the lines between the physical, digital, and biological spheres’ as the World Economic Forum defines it – may allow Africa to bypass some of the associated infrastructure needs such as electricity supply.

But manufacturing itself, as a necessary stage of economic development, cannot be bypassed because of its importance in transforming African economies to achieve greater productivity. Cilliers even suggests that the traditional economic development path from agriculture through manufacturing to services should be amended to put manufacturing first because ‘beyond a basic, subsistence level of development, industrialisation determines agricultural efficiency and expansion and even the development of high-value services’.

An aggressive ‘Made in Africa’ strategy by sub-Saharan African governments would boost average annual per capita incomes of low- and middle-income countries by 44% above those likely to be achieved if they remained on their current economic pathway by 2040. For upper-middle-income countries the boost would be slightly less, 39% above the current business-as-usual trajectory.

Cilliers was also sceptical about another popular notion – that Africa’s booming population, expected to double by 2050 from its current 1.26 billion to 2.56 billion – necessarily offers the continent a ‘demographic dividend’. Certainly many countries are eyeing Africa as the consumer market of the future because of its mushrooming population.

Simplifying the complex calculations in this report, the demographic dividend (or the ‘demographic window of opportunity’) may be said to open for a country when its median age is between 25.5 and 41 years. In very youthful sub-Saharan Africa the median age, however, is only 18. Only Mauritius, Seychelles, South Africa, Tunisia, Morocco, Libya and Algeria have median population ages above 25.5, the report notes.

The report also points out that typical fertility rates for countries that enter the demographic window of opportunity are 2.8 children per woman or less. The rate for sub-Saharan Africa is now 4.8 children per woman, likely reaching 2.8 only in 2052. This means on current trends, Africa as a whole is more than three decades away from entering the demographic window of opportunity.

Cilliers notes that increasing female education is widely considered the most important way of diminishing fertility rates. But this will take too long for Africa and so he advocates additional measures through which the continent can accelerate its transition to lower birth rates. Access to modern forms of contraception and provision of basic healthcare must be increased, he says – although evidence shows that less educated women are less likely to practice contraception.

And even when African countries do enter the demographic window of opportunity, they will require aggressive investments in education, skills, infrastructure and the sort of structural economic transformation spelt out in the Made in Africa report. This will ensure those large work forces make a significant dent in unemployment and poverty.

Taken together, the two reports present a sobering picture of Africa’s economic prospects. Sobering doesn’t necessarily equal disastrous. But it does mean that African countries and particularly governments can’t afford to sit back and hope that either global economic trends or demographics will determine the continent’s future. They will have to very aggressively tackle those problems themselves.