Africa’s Moment: Becoming a global economic powerhouse

Celebrating Heritage Month includes introspection of what we have achieved, and where we can take our countries and continent to, as African people.

Africa is facing a turning-point opportunity to become a global economic powerhouse. With its burgeoning youth population and abundance of natural resources, the continent has two primary elements that can help move its economies from being largely export-focused to a more diversified set that includes information and value-added manufacturing economies.

Such a move will not only strengthen Africa’s local and regional economies but could be a significant competitive advantage globally. This is because we now find ourselves at a time when many industrialised nations are, or soon will be, facing worker shortages, due to declining birth rates; and when the world needs leadership in the development of sustainable and renewable industries.

Africa’s rich heritage is one that is steeped in diverse cultures and natural resources. The continent is home to about 30 per cent of the world’s mineral reserves and possesses 12 and eight per cent of the world’s oil and natural gas respectively. These renewable and non-renewable resources comprise 30% to 50% of natural capital in many African countries.

However, resources and sheer numbers alone are not enough to create this change for the continent. Both the youth population and Africa’s natural resources will require management and investment to serve as the backbone of a global economy.

How to get Africa and its youth there

Africa today has the opportunity to take a leading role in the global economy if it puts its youth and natural resources at the heart of growing a stable economy and society. Through a collaborative approach of all African countries working together, taking advantage of these resources will require four actions:

Upgrade the education and skilling systems to prepare youth for jobs in high-growth industries. Sustainable local economies and stable labour forces are built upon a strong foundation of education and skilling. A three-pronged approach can be used to create an educated and skilled workforce: building a high-quality primary and secondary educational system that provides youth with the foundational knowledge to be able to work and develop professionally throughout their career; developing a system to teach job-relevant skills to individuals from schooling and throughout their career, and which are tied to local labour market needs, and creating ‘good jobs’ within high growth and locally relevant industries that take advantage of educated individuals in a way that allows them to thrive in their local communities.

Possible policy recommendations include incentivising multinational organisations to invest in, and be an active part of, local education; and creating a national skills mapping system for jobs in local industries, including for entrepreneurship. This will enable individuals, particularly youth, to understand which skills they need to pursue meaningful and productive jobs.

Taking a local-first approach to building strong local and national economies. Economies across Africa will depend on making cities and villages more productive and sustainable. This will require cooperation among public and private entities, local government and communities to ensure they are all more involved in decision-making.

Possible policy recommendations include identifying and supporting local economies that are based on local renewable and natural resources, which are developed in a sustainable, innovative manner. With the support of respective national governments, businesses and multilateral organisations, as well as through foreign direct investment, local communities can build thriving economies and local labour markets based on sustainable use of their resources.

Create job opportunities, particularly for women and youth, in high-growth industries and entrepreneurship. The heart of the African economy remains small and medium enterprises, and creating enough ‘good jobs’ for youth and achieving gender parity in the workforce will require building a healthy culture of entrepreneurship across micro, small, and medium enterprises (MSMEs).

Possible policy recommendations include establishing talent development programmes and exchanges between multinational organisations outside of Africa and local communities within the continent that support learning abroad and bringing those skills home. Making access to credit and financing easier by providing micro-loans, low-interest/no-interest lines of credit, and removing collateral stipulations, particularly for youth and women could also prove to be helpful, as well as reviewing and reworking regulations that stifle business growth.

• Utilise technology to modernise high-growth industries and develop sustainable ‘green’ industries. The fourth industrial revolution (4IR) — characterised by the growing use of technologies such as artificial intelligence, robotics, blockchain, and augmented/virtual reality, among others — is driving innovation globally and across most industrial sectors. For Africa’s high-growth sectors, this represents a massive opportunity for growth when partnered with a rapidly growing, working age, and skilled and educated youth population. Concurrently, African countries should continue to support the germination and development of industries based solely around their massive trove of renewable resources such as solar and wind and to decarbonise traditional industries.

Possible policy recommendations include creating or strengthening policy frameworks for industries that protect natural resources and support the UN’s Sustainable Development Goals (SDGs); and incorporating the youth’s voice in the development of the green economy, particularly in technology and entrepreneurship.

This vision is feasible and achievable but it will require the combined efforts, talent, and most of all, ingenuity, of the public sector, private businesses, and local communities. It also requires the political will of African nations and the support of its partners. With its vast resources and talent pool, Africa has everything it needs to create a sustainable, vibrant, youth-driven future — one that can serve as a model for the rest of the world.

The writer is the PwC Africa People and Organisation Leader