How Young Populations in Africa/Latin America Have Potential Growth But Need Jobs/Policies to Match

The twenty-first century could witness an economic boom because of changing population numbers in Africa and Latin America. The two regions maintain exceptionally youthful populations at a time when Europe, East Asia and North America experience declining workforces because of aging populations. However, the transformation of youthful populations into development drivers requires governments to establish employment opportunities, develop skills and expand social opportunities. The same youth population that exists today could produce more unemployment, political instability and migration issues when no development strategies are implemented.

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Africa stands as the most significant example of population growth potential. The world's youngest population exists in Africa as the median age reaches 19 and the population will reach 2.5 billion people during the next fifty years. According to the UN Department of Economic and Social Affairs, Nigeria is projected to become the world’s third most populated country after 2050. This presents an exceptional opportunity as millions of young Africans will join the workforce annually to bring fresh ideas and energetic dedication to the market. Kenya, Rwanda and Ghana are projected to be the future tech and entrepreneurial hubs of Africa. Even by now, the "Silicon Savannah" in Kenya developed M-Pesa which became a revolutionary mobile payment system that brought digital financial services to the entire African continent.

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Nevertheless, the economic situation in this region presents challenges. The annual creation of formal employment positions in Sub-Saharan Africa fails to even meet the 10 million new workers who enter the job market each year. The majority of African youth work is in unregulated sectors because they perform street sales, day work and agricultural tasks that generate minimal value. The absence of permanent employment prevents people from advancing economically because they cannot fund their education, start businesses or save money for the future. The absence of employment expansion in Africa will produce a large number of educated jobless young people who have historically financial unstable lives.

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Meanwhile, the demographic structure of Latin America shows younger ages than developed nations, although they remain older than Africa. The demographic dividend period, the stage in a country’s population growth when the working-age population becomes larger than the non-working population, continues for Mexico, Colombia, Brazil and the Dominican Republic as their populations age. The economic growth potential of these countries remains strong because their workforce numbers remain sufficient for expansion when they maintain sufficient job creation and skills development. The Mexican automotive, aerospace and electronics industries have created thousands of jobs through nearshoring because companies have relocated their supply chains to be closer to the United States. The combination of strategic policy decisions, trade agreements and geographic advantages enables countries to convert their demographic advantages into actual economic success.

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The main challenge facing Latin America stems from its inability to match worker qualifications with available job requirements. The labor market faces continuous shortages of workers who possess skills in engineering, logistics, robotics and information technology while numerous young people remain without employment or work in low-paying service roles. Brazil’s  education system produces numerous graduates who lack essential math, digital and technical competencies which hinders local business recruitment efforts. On the other hand, Chile and Costa Rica have dedicated substantial resources to technical education which positions them better for entering green energy, data services and advanced manufacturing markets. This illustrates that  government decisions can heavily influence whether young people become economic drivers or become economic burdens.

The success of young populations depends heavily on the state of their infrastructure network. The African continent faces business operation challenges because of its inadequate power distribution systems, restricted internet access, insufficient transportation networks and outdated port facilities. Power outages in Nigeria result in annual financial losses that amount to billions of dollars. On the contrary, the nationwide broadband network and streamlined business rules in Rwanda have established an East African tech hub that draws entrepreneurs from throughout the region, while the Colombian government spent billions on transportation infrastructure development during the last ten years to create better market access for young people from rural areas to enter the formal job market. 

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Another component for success is policy implementation. Countries need to establish policies which promote entrepreneurship, draw investments and stimulate innovation. Mauritius and Botswana’s business friendly environments have attracted multinational firms because their governments established transparent regulations with minimal corruption which led to middle-class employment growth. The Pacific Alliance member states of Chile, Colombia, Mexico and Peru have established unified trade policies which eliminate market entry obstacles to link their young workforce with international markets. The failure of nations to update their institutional frameworks results in their inability to transform population growth into economic success. For example, the political instability and inadequate economic management in Venezuela has resulted in high unemployment rates despite its large number of young people.

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Both Africa and South America have specific plans which will help them make the most of their demographics. Though it may be complicated, it would be beneficial if they established vocational training programs that match industry requirements while providing small business support through microfinance, simplified regulations, building digital networks across underserved areas, promoting sectors that generate numerous employment opportunities including renewable energy, modernized agriculture, tourism, logistics and digital services. The Industrial Parks Development Corporation of Ethiopia demonstrates how focused industrial policies create substantial employment opportunities for young workers.

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The present time represents a critical juncture for both Africa and Latin America. The two regions possess a unique economic benefit because their populations consist mainly of young people while most other nations face aging populations. The starting point for development begins with demographics. The opportunity to benefit from demographic growth will disappear when governments fail to create specific policies, make strategic investments and focus on developing employment opportunities and educational programs. Implementing suitable strategies enables these regions to transform their large youth populations into innovative growth drivers which will transform the worldwide economic landscape through the next several decades.