Africa has the potential to develop a new development model, with the continent’s demographic development, its rapid urbanization, and technology change being the three major drivers:
Africa is the continent with the fastest growing population in the world. Today’s 1.2 billion people will grow to 1.7 billion in 2030 and 2.5billion in 2050. Africa will account for 25% of the global population in 2050, of which the majority will be at working ages (15-64 years) – a huge potential to reap the “demographic dividend”. Today, 50% of Africans are below the age of 18.5 years and 19% between 15 and 24 years of age, making Africa the most youthful continent.
Today, the share of urban residents has increased to 40%; this trend is likely to continue to a level of 56% in 2050. While a lot of challenges are associated with the speed of urbanization, it has the potential to create favorable conditions for spurring economic development.
Urban centers can create new economic opportunities and drive service-led growth. Urban areas enable aggregation economies through facilitating a wider range of shared services and infrastructure, greater matching of resources, as well as knowledge sharing, cross-fertilization and innovation.
The absence of established ‘legacy systems’ creates a potential to build new industries and systems “bottom-up” by leveraging technology. The technology boom across the continent has been attracting the attention of investors, innovators, and corporates. With the spread of digital technologies, Africa is getting increasingly connected. Mobile penetration currently stands at 73% across Sub-Saharan Africa, while around 19.3% of Africans use the internet.
These figures will increase rapidly in the next few years. The absence of ‘legacy systems’ allows the African continent to position itself as a “breeding ground” for digital innovation. The recent announcement of bringing Senegal’s currency on a Blockchain shows how the continent can “leapfrog” development.
For agile entrepreneurs, the presence of these legacy systems is an opportunity. They can redesign the economic architecture of the continent with new tech solutions that will leapfrog whatever that is available today, at better cost and higher efficiency.