📉 What people think
In the Warp News poll, more than four in ten believe the highest percentage of entrepreneurs are in North America. Only one in ten believed in the right option, Africa.
Across Africa, 22% of working age population are entrepreneurs (40% in Nigeria and Zambia). Among them, women represent 27%. In Latin America, which comes second, the proportion of entrepreneurs is 19% and in Asia 13%.
📈 Here are the facts
- Africa is on the verge of population displacement, which brings an economic bonus. Europe and North America had their changes 100 years ago and Asia a few decades ago.
- For the foreseeable future, Africa will have by far the largest labor supply in the world.
- Young Africans today are better informed, educated and healthier than ever.
- Africa cannot copy China’s model as the workshop of the world. This path to prosperity is not as open today. Instead, Africa can diversify and invest in modern services as well as industry and agriculture.
- The agricultural potential is enormous. More than half of all the potential unused arable land in the world is in Africa.
- At the same time, the continent has the fastest urbanization in the world.
- Africa can diverge from its dependence on commodity exports and develop a single African market with 1.2 billion consumers. An African free trade area has just been created.
- Africa is skipping resource-intensive technology steps and stepping straight into the mobile age. IT solutions are developed for, among others, e-commerce, financial services, healthcare and food production.
- Africa has the largest share of entrepreneurs in the world. There are 50 million micro and small enterprises.
- The informal sector is also the largest in the world. It is not only a sign of a lack of economic maturity but implies greater flexibility and promotes innovation and rapid change.
- Young Africans have a much brighter vision of the future than Westerners. In the polls, they see the 21st century as the century of Africa.
When East Asia took off in the 1980s and 1990s, a population bonus contributed to what is known in English as the demographic dividend. It occurs when the birth rate drops and the share of the working-age population increases. For a few decades, there is a window where more and more people can contribute to economic growth while fewer and fewer need to support themselves.
According to calculations, such a bonus automatically increases growth by 0.5%, but with various consequential effects, the effect is estimated to be three times greater. In 2035, Africa would have more people of working age than the rest of the world.
Births are not declining as rapidly as in Asia, and in some Central and West African countries birth rates are still very high. But over the past decade, the fall has started in all parts of Africa.
Education is the key. In some countries, women who have completed secondary education give birth to half as many children as uneducated women.
The African continent is very large. It is a gross misconception that Africa is overpopulated. If you compare it to Western Europe, the continent is rather underpopulated. The problem is that millions of Africans are poor. This has nothing to do with numbers but rather historical errors. To emerge from poverty, Africa needs creative, hard-working and consuming people.
Agriculture was treated like a mother-in-law. The potential is huge. If agriculture is allowed to become the base, industries can grow out of it. As countries achieve self-sufficiency, food industries may spring up around cities.
As in East Asia, one has to wait with expensive combines and use the huge labor resource instead. With better seeds, better methods and smart irrigation methods, yields can be increased dramatically.
Africa can, even more than Asia, jump straight into high technology when industrialization takes off.
Young people are educated and informed. They are part of the Internet community. 50% of mobile money accounts in the world are in Africa.
New companies are developing financial, knowledge commerce and healthcare solutions without bank accounts or physical addresses. Using satellite and mobile images, farmers can obtain weather and plant information for optimized cultivation. Drones distribute medicine in rural areas. Some advanced countries like Mauritius act as a financial gateway to the continent.
The new AfCFTA Free Trade Area raises hopes that the continent will open up and grow a billion-dollar market and be able to break the dependence on commodity exports, which are so vulnerable fluctuations in world market prices.
With new technologies, the continent can also be electrified. New hydroelectric plants provide stable power for large installations. Modern solar energy technology meets local needs such as lighting, ventilation, charging and maintaining cold chains.
There are significant untapped oil and gas reserves which, during a development phase and with the latest clean technologies, can still help Africa catch up. And yes, physical roads must also be built.
The fact that the majority of the economy is still informal is generally presented as a problem because the security for the individual is less. But in the first place, it also paves the way for rapid and far-reaching change and innovation.
Last but not least, Africans themselves, unlike Westerners, are convinced that they can do better than their parents and that their children can do even better. The more restless among the young people try to travel to Europe or the Gulf States to realize their dreams more quickly, but most stay, create and build.
What challenges are there?
- Corruption and bureaucracy are widespread in many African countries, especially in the public sector, which acts as a barrier to investment.
- In some countries, more than half of government revenue still comes from the export of one or a few raw materials. It takes courageous decisions to break these monocultures.
- Due to historical errors, Africa imports far more food than it exports. This is an error that urgently needs to be corrected.
- Savings are still too low to constitute domestic investment capital, which is why capital has so far mainly come from outside (in recent years, mainly from China).
- The infrastructure is in some places extremely deficient. Electricity supply is unreliable.
- The wage situation is higher than in Asia, for example, despite a lower economic level. This is due, among other things, to dependence on food imports.
What does the expert say?
“You have to understand that a demographic dividend is on the way. There is a large and growing young middle class that wants decent jobs. This is crucial,” says Paul Akiwumi, director of the Africa department at the United Nations agency. for Trade and Development, UNCTAD. .
At the same time, Africa must redirect its development from commodity exports to agriculture, which in turn will benefit cities and industry, says Akiwumi.
“The commodity model doesn’t work and never has.”
“Africa must become self-sufficient in food. Agriculture must be developed with new technologies. small businesses today that can provide farmers with a whole chain of such services,” says Paul Akiwumi.
“It is still difficult for entrepreneurs to find financing. The banking system is slow and you can’t get credit for an idea. But there are more and more inventive small-scale savings solutions. more people to save for the children’s school, a bicycle, a motorbike, a refrigerator or a small pension.”
Akiwumi has high hopes for the new African free trade CFTA. The knowledge of being able to reach a continental market of over a billion consumers can open up huge opportunities for investors.
“The continent needs a lot of operational managers, accountants, technicians and IT people who know local problems. These are jobs for the young and well-educated large middle class that is emerging.”
💡 The Optimist’s Advantage
Africa is booming. A large, young and well-educated middle class is emerging, giving the continent enormous potential for development. The future lies in new technologies and honed agriculture.
👇 How to get the Optimist’s Edge
- Understand that the emerging African population is healthy, educated and informed.
- Understand that this is the new young middle class who know what is needed, know the problems, have the local knowledge and have the ideas.
- Invest, trade with or use products from African startups.
- Invest, exchange or use products from emerging African agriculture.
Pula Advisors (crop insurance for small agricultural businesses)
cold hubs (solar cold rooms for crop protection)
Agrixtech (advice and new technology for crop optimization)
Relief (rationalization of palm oil production)