The Challenge of Africa’s Rising Population

The countries of sub-Saharan African have the lowest per capita GDP and the highest birth rates of any region in the world.

The December 2021 issue of Finance & Development, from the International Monetary Fund, has a series of short articles on some of the challenges and opportunities. Abebe Aemro Selassie offers an optimistic vision in “The African Century” (pp. 58-61). He writes:

The population of sub-Saharan Africa is projected to double from 1 billion to 2 billion by about 2050. This will account for half of global population growth, with the working-age population growing faster than any other age group. These projections—while not uniform across the continent—should be placed in the context of the opposite trend in advanced economies, which typically see aging populations, an inverted population pyramid, and a reduction in population once immigration is excluded. This trend represents perhaps the region’s single greatest opportunity. It embodies a growing pool of human talent and ingenuity coupled with large market size—historically important drivers of economic dynamism.

One possibility here is a happy outcome. Selassie writes:

Fast-forward to 2081. The demographic boom currently unfolding in most sub-Saharan African countries will likely have transformed many of the region’s economies into the largest and most dynamic in the world. Wishful thinking? Perhaps. But 30 to 40 years ago, not many would have thought that possible of China, India, Indonesia, or Turkey. Three factors will have an influential role in making this vision materialize:

• The demographic transition that is underway: By 2050, many sub-Saharan African countries will be among the few with a rising working-age population. Much investment and consumption demand will follow factors which are certain to entice considerable innovation.

• The ongoing digital revolution—which offers much scope for the diffusion of know-how, new business opportunities, and more efficient service delivery.

• How effectively the region’s economies deal with the transition to a low-carbon economy and the adverse consequences that climate change is set to unleash.

Of course, there are no guarantees here. One possibility is that a main consequence of Africa’s high population growth and low levels of economic opportunity will be an extraordinary wave of emigration from Africa to the the European Union and the rest of the world. The chances of a rising standard of living for most of sub-Saharan Africa are linked to the ability of these countries to make the necessary investments in education, health, and infrastructure to provide the basis for future growth.

Ken Opalo discusses these issues in Democratizing Africa’s Public Finance Management: Governments that fail to overhaul taxing, spending, and borrowing could face electoral backlash. Opalo describes the situation this way:

Weak public finance management systems are a significant impediment to economic growth and development in African states. On the revenue side, many African countries underperform on tax collection. In 2018, the average tax collection as a share of gross domestic production in Africa was 16.5 percent–varying from 6.3 percent in Nigeria to 32.4 percent in the Seychelles. On the spending side, weak legislative oversight means that budget appropriation, implementation, and oversight often reflect the priorities of the executive branch. The result: only some of the revenue collected in African states actually reaches the public in the form of public goods and services. Much gets lost to spending on poorly planned “white elephant” projects, corruption, and general waste. As for borrowing, recent increases in public debt in a number of African countries have raised concerns about a lack of transparency and accountability.

Opalo suggests that there is a need to build linkages from additional government revenues to publicly demonstrable spending outcomes. This step will also require additional power for public participation in tax and spending decisions via legislatures, rather than leaving most major decisions up the executive branch. I found this figure to be striking. Opalo emphasizes that most people in most countries think the president should be monitored by parliament. But look at how many African countries where 1/5 or 1/4 or 1/3 or more of the people think the president should just act, unmonitored by parliament!

Other papers in this symposium include:

• “Growing Together: The IMF and African Low-Income Countries: The role of the IMF has evolved to help the countries most in need,” by Atish Rex Ghosh and Anna PostelnyakB
• “Boosting Climate Responsiveness in Sub-Saharan Africa:Investment in quality infrastructure will be critical for the region to adapt to and mitigate climate change,” by Pritha Mitra and Ha Vu
• “Africa’s Hard-won Market Access: African countries access to global capital markets should be celebrated, but the road is bumpy and a more robust vehicle is needed,” by Gregory Smith
• “Unleashing Women and Girls’ Human Capital: A comprehensive effort could unlock the region’s potential and spur recovery, by Hana Brixi, Laura Rawlings, and Elizabeth Koechlein