Africa’s Rising Young Population and Rich Resources Attract Attention
By 2050, Expected to Contribute $20 Trillion to World Economy
Holds 30% of World Minerals, 12% of Oil Reserves
Geographically Adjacent to the Atlantic and Indian Oceans
Analysts predict that Africa, a continent with vast growth potential, will be the new driving force leading the future global economy.
The American think tank Atlantic Council emphasized in a recent report that “a new perspective focused on Africa is necessary for the world economy to grow again,” stating that “Africa, with its growing population, youth, rich natural resources, and strategic geographical location that can promote world trade, can play a vital role in revitalizing the world economy and should be at its center.”
Global Economic Stagnation
The global economy has entered a long-term stagnation phase. Most of the momentum that drove high growth and prosperity in the 1990s has weakened. The decline in growth is not solely due to the COVID-19 pandemic but has occurred even before due to factors such as an aging population, decreased productivity, and increased trade barriers.
On top of this, the economy has been hit with successive shocks, including the COVID-19 crisis, the war between Russia and Ukraine, the war between Israel and the Palestinian militant group Hamas, high inflation, and rapid interest rate hikes.
The Atlantic Council predicts in its report that “these shocks, combined with existing structural factors, will cause strong headwinds for the world economic outlook over the next decade.” The World Bank shares this view, forecasting that the potential GDP growth rate worldwide will remain at an annual 2.2% until 2030. If this prediction materializes, it will be the lowest growth rate in about 30 years.
Africa as a Solution
The report identifies Africa as a hidden card that can reverse this situation.
It implies that the world economy can rebound by leveraging Africa’s growing young population, abundant natural resources, and strategic location. Despite having more limited access to natural and energy resources than Africa, Vietnam has increased its GDP sevenfold over the past 30 years.
If Africa can achieve a similar growth rate over the next 30 years, it is expected to contribute $20 trillion to the world economy by 2050.
This goal is quite realistic. The total GDP of the African continent has already tripled from 1990 to 2021. In particular, Ethiopia’s GDP increased by 7.6 times during the same period. The GDPs of Ghana, Tanzania, and Egypt also grew by five times, 4.6 times, and 3.7 times, respectively.
Growth Potential
The report emphasized the potential of Africa, describing it as “a continent led by a young generation that is innovative, productive, and ready to consume.” Compared to almost all other regions in the world that are aging, only 3% of Africa’s population is over 65 years old. About two-thirds of the population is under 30, and about 40% is under 14. This means that Africa has a growing young consumer market and a sufficient labor force for at least the next 30 to 40 years.
Furthermore, Africa has a vast amount of diverse natural resources. It holds 30% of the world’s mineral reserves, 12% of oil reserves, and 8% of natural gas. It is also a continent that has 30% of the world’s rare earth reserves. This is why countries worldwide are courting Africa to secure lithium, cobalt, and nickel minerals, which are necessary for advanced industries.
Geographical Advantage
Its geographical location is also advantageous. Surrounded by sea on all sides, Africa has easy maritime trade with most continents. Of the 54 countries in Africa, 38 have access to the ocean. The remaining landlocked economies can access the sea by passing through at least one neighboring country.
Mainly located between the Atlantic and Indian Oceans, it serves as a gateway connecting various regions, including the Middle East and Europe. This location effectively connects Africa, Europe, America, Asia, and the Middle East through efficient trade routes.
However, the report argues that aggressive infrastructure investment is necessary for Africa to bloom its growth potential and contribute to the world economy.
The Atlantic Council report stated that “no region in the world has the potential that Africa has” but also pointed out that “the infrastructure gap here is a major obstacle to unleashing its vast economic potential.” It repeatedly emphasized the need for “massive investment in transportation, electricity, water, sanitation, and communication infrastructure.”
By. Byeon Hyo Sun
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