Demographics, not poor governance, explain Africa’s slow development

8 Apr 2025

Until dependency ratios shift, Africa’s large youthful population will remain the continent’s biggest barrier to growth.

Africa’s disappointing economic performance since independence in the 1960s is often blamed on corruption, poor governance and lack of competition. But structurally, the main reason is demographics.

The World Bank’s 2024/5 country classification considers 22 African countries as low-income and 24 as lower-middle-income. No other region has similarly poor levels of development or has shown less progress in the late 20th and early 21st centuries.

Slow development has occurred despite a cumulative $2.3-trillion in development assistance (aid) – a topic now in the news given the US Agency for International Development cuts.

For at least a decade, much has been made about Africa’s growing and youthful population – without adequate recognition that it has been the main drag on growth since the 1960s. According to research by the Institute for Security Studies’ African Futures and Innovation programme, only beyond mid-century does the ratio of working-age Africans to dependants enable labour to enhance economic growth.

Consider that at independence in the 1960s, Africa’s ratio of working-age persons to dependants (children aged 15 and below and adults over 64) was almost one-to-one and declining. In other words, every person of working age supported at least one dependant, and the burden was increasing.

The ratio bottomed out in the late 1980s and then started improving. Of course, Africa’s labour force needs to be educated and in good health to be productive. But the reality is that even then, labour contributed less to economic growth with each passing year until things slowly began to improve from around 1988.

Africa’s growth in subsequent years was mainly due to the commodities boom that accompanied China’s rapid growth. In the early years of its remarkable escape from poverty, China grew partly because a capable government enforced a one-child policy that saw the ratio of working-age people to dependants going through the roof to peak at almost 2.8 working-age persons to every dependant.

The Asian Tigers (Hong Kong, Singapore, South Korea and Taiwan) had the same experience, but without the draconian social control policies of Deng Xiaoping and others. With the opening up of the Chinese market, the West rushed to invest, matching China’s growing labour force with capital.

In contrast, Africa’s demographic transition has been slow, for several reasons. Historically, low population density – a function of Africa’s high disease burden – translated into lower income growth rates.

More recently, the continent has failed to sufficiently empower women, raise the quality and attainment of education, roll out the use of contraceptives quickly enough, or transition to economies where child labour is no longer required. Another reason is the dominance of subsistence agriculture, which has a high demand for child labour in sub-Saharan Africa’s large rural population.

Even in 2025, the ratio of 1.3 persons of working age to one dependant means that slow growth in the size of the labour pool relative to dependants (the primary source of sub-Saharan Africa’s economic growth) translates into steady but unspectacular economic growth rates. No amount of aid can counter Africa’s flaccid labour muscle.

The chart above shows the ratio of working-age persons to dependants in sub-Saharan Africa using the International Futures forecasting platform to 2060. Sub-Saharan Africa enters a potential demographic window of opportunity beyond 2050 when the ratio gets to 1.7:1 – the magical number at which the contribution of labour starts propelling faster economic growth. At that point, the region enters a potential demographic window of opportunity that, given numerous other conditions, should unlock more rapid income growth.

Standard economic growth theory posits that economic growth is the result of contributions made by labour, capital, and technology, and there is a lively debate about which contributes most at different levels of development.

Most empirical research supports the view that capital accumulation (physical capital investment such as infrastructure, machinery, factories and equipment) is the primary driver of growth during the early stages of development.

However, there is equal support for the position that, at low development levels, labour contributes most to growth. Evidence for this is overwhelming when considering the importance of agriculture as the sector with the largest growth potential in most poor countries.

Virtually all high-income countries first underwent an agricultural transformation before embarking on a manufacturing transition, and then eventually the services sector dominated. However, in most African countries, this sequence has been reversed, with low-end services in the informal sector dominating the economy while agriculture largely comprises subsistence farming, and most economies are deindustrialising.

In addition to its growing population, Africans often point to the continent’s sizeable agricultural potential. But in reality, Africa has not had its agricultural revolution. Instead, it is becoming more food-insecure because of underinvestment in agriculture and the association between agriculture, poverty and suffering, which makes it the least-attractive sector among young Africans.

In contrast to sub-Saharan Africa, north Africa is already well into its demographic transition (see map below). It should be experiencing higher economic returns from a shrinking dependency ratio. But the stifling role of the state and lack of economic freedom constrain the income growth that should follow from its favourable demographics.

The experience of north African countries (and also South Africa) cautions that enabling policies are required to turn a potential demographic dividend into income growth.

The dividend in sub-Saharan Africa, especially in the Sahel and central Africa, will take longer to achieve. Accelerating the demographic transition will require deliberate policy choices: investing in girls’ education, expanding access to reproductive healthcare, transforming rural economies and fostering labour-intensive sectors that can absorb a youthful workforce.

If these steps are taken early, Africa can harness its population growth as a strength – not a constraint – when its demographic window finally opens in the decades ahead.

Economic growth determines the resources available to govern and hence the ability and quality of governance. This is another way of saying rich countries are typically well governed while poor countries tend to be badly governed. Basking in their wealth and high living standards, most of today’s high-income countries forget the struggles, corruption and abuse of money that accompanied their own development.

Meanwhile, Africa’s demographic window of opportunity is coming. Eventually its youthful and growing population, alongside the emerging population decline in Europe and Asia, will present an opportunity for rapid growth, with the right investments.

If Africans are educated, trained and healthy, the continent’s labour force can contribute significantly to economic growth while positioning Africa as a key exporter of goods, services and labour to the world.

The future is inevitably one of large-scale movement of labour – this time not to Africa, as happened in a previous century, but from Africa. DM

Jakkie Cilliers, head, African Futures and Innovation, Institute for Security Studies (ISS) Pretoria.

First published by ISS Today.

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