Most people recognize the abundance of natural resources that the Sub-Sahara African continent has been blessed with.  One resource that most people fail to recognize is Africa’s youth.  This resource might be Sub-Sahara Africa’s, SSA,  most precious and vital for continued growth in the 21st century.  Not only is Sub-Sahara Africa one of the fastest growing regions in the World, it also has the largest youth population in the World.

62% of the SSA population, 600 million people, is below the age of 25, and according to the World Bank the number of 15-24 year olds has risen from 133 to 172 million in the last decade and is expected to reach 246 million by the year 2020.  The Guardian estimates that there are 70 million more Africans under the age of 14 in 2012 than there were in 2002 and by 2022 that number will increase by another 76 million.  The median age in Africa in 2012 was 18 years old, which is 7 years younger than the median age in Asia and 16 years younger than China.O-Funds_1

This young population could be a catalyst for growth, global consumption, and global production, but it could also be a huge risk with the large number of unskilled youth who lack jobs and opportunities, which could lead to political and social unrest like we witnessed with the Arab Spring Revolutions in Tunisia and Egypt.  For this article I will first look at the growth potential and then look at the potential risk factors.

For many years Africa experienced a brain drain.  People were leaving SSA to come West for a better education and opportunities.  Over the last decade that trend is starting to reverse and is now becoming a brain gain as more expats return to SSA looking for opportunities due to economic problems in the West, Africa’s strong economic growth, and those who want to return home and make a difference.

A survey by South African private equity firm Jacana found that 70 percent of African students studying for their MBA’s in the US and Europe plan on returning to Africa after graduation.  These expats are bringing skills and knowledge to the continent that is assisting with its current growth.  Also Africa is doing a better job of retaining its workforce.  Recent statistics compiled by the World Economic Forum indicate that many of Africa’s growing economies have significantly increased the retention of educated workers.  Nigeria is a great example of this.   They were ranked 112th in the World for retaining workers in 2008 but by 2013 they ranked 48th.

The growing youth segment is also digitally savvy.  There is a growing digital revolution taking place and technology is lowering the barriers to entry for expats and business and creating opportunities where none previously existed.   Mobile phone technology is the technology of choice and mobile internet usage in Africa is the highest in the World.   It is projected by 2016 there will be over 1 billion mobile phones in Africa.

SSA is also currently experiencing a technology boom. There are currently 90 technology hubs, labs, incubators and accelerators, in over 20 African countries spearheaded by Kenya’s iHubs in Nairobi.  These hubs are developing an atmosphere where new and innovative ideas are created and shared and where people can network with other like-minded people.


Of course for all of the positive vibes coming out of SSA there are still lots of problems.  According to the African Development Bank, the youth constitutes about 37 percent of the total labor force, but make up about 60 percent of total unemployment. The risk of displaced youth who cannot find jobs, do not have the proper education, training and skills, could lead to a melting pot of political instability and social unrest.thumb.php

Africa needs to be able to create its own jobs.  Currently Africa lacks an industrial and manufacturing base that produces products for export.  Africa is experiencing a jobless growth and according to a McKinsey & Company study the African continent loses 20,000 skilled workers to developed economies every year because of the lack of skilled jobs and opportunities.

There is also the issue of local workers who are upset with the return of expats to their countries.  They feel the expats are taking the best jobs and opportunities and were not there during the harshest of times.  There is a growing sense of inequality and many feel they lack access to the same opportunities as their expat colleagues who have been educated and have worked in the West.  Many feel Western companies would prefer to hire expats rather than locals if given the opportunity.

There are solutions for these problems.  Africa needs to have youth unemployment treated as a core strategic objective of development policy.  There needs to be favorable and flexible labor laws, a focus on the investment in people through education and training, the creation of a favorable and operational business environment that is attractive to businesses and investors, and a creation of wealth rather than just a redistribution of wealth.  This is of high importance and something SSA needs to get right.  McKinsey & Company predicts by 2040 that Africa will have the largest workforce in the World surpassing India and China.  So the opportunity for growth is great, but the opportunity for risk is also great.

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