SOCIAL – Realising the promise of the demographic dividend

How will the region’s ‘youth bulge’, rapid urbanisation and deepening inequality affect its development trajectory?

Chapter Contents:

East Africa’s ‘youth bulge’ presents challenges and opportunities

  • As the rest of the world’s populations age, East Africa’s fast-growing population will be increasingly young.
  • If East Africa’s transition to low birth rates occurs too slowly, then the ‘demographic dividend’ may not materialise.

Urbanization is set to advance rapidly in East Africa and cities will require major investment in order to fulfil their productivity potential

  • In East Africa, the number of people living in cities is set to more than treble by the middle of the century, rising from 100 million to somewhere in the region of 350–450 million.
  • Urban areas are considerably more productive than rural ones and governments are trying to encourage spill-overs between clustered firms.
  • There is a risk that East Africa’s cities become ‘low development traps’ as their fragmented form and lack of adequate infrastructure make them relatively costly to inhabit, navigate, and do business in.

In East Africa, GDP growth is being accompanied by rising inequality, which may inhibit development over the medium and long term

  • Household consumption should expand significantly in East Africa due to population growth and rising incomes, with 6 million households moving from earning less than $5,000 a year in 2015 to between $5,000–$20,000 by 2025.
  • There are likely to be 400 million people in sub-Saharan Africa living under the $1.90 poverty line in 2030, and the gap between the richest and poorest in East Africa has been widening since the turn of the century.
  • Governments are beginning to explore digital technologies for administering wealth distribution programmes.

The advance of technology may erode the global demand for unskilled labour, forcing economies to compete on the basis of skills and education

  • Enrolment rates at primary and secondary level in sub-Saharan Africa have improved substantially in recent decades, but a ‘learning crisis’ is taking place as students graduate without the skills demanded in the modern economy.
  • Some firms, governments and universities are exploring the potential of online tools in skills training and education.

African migration is expected to accelerate

  • Since the 1960s, the number of African migrants has increased in line with population growth, although a greater proportion of migrants now leave the continent.
  • Climate change and growing populations and incomes will see migration within and from Africa increase, with the number migrating per year potentially more than doubling between now and 2050.