RPO and Talent Management Blog by Ochre House | Ochre Talk

Africa – A Demographic Dividend Around The Corner?

In the few weeks following my opening keynote at the Ochre House Talent Symposium in London, I presented some of our Talent Economics research at a business forum in Manila – Philippines, and an HR Business Partnering Conference in Barcelona – Spain. The group in Barcelona were particularly diverse, which added some interesting new perspectives to the talent management debate. The audience not only represented some of Western Europe’s strongest organisations, but included companies from Eastern Europe, North Africa, Saudi Arabia and other Middle East countries. In particular I had some very good questions emerge about the short and medium term business potential of Africa.

Africa today is a particularly interesting case study, and exhibits similar risks and opportunities seen in countries like China and India during the early 1990s. Back then, as both Asian tiger economies began opening up their markets for business, few global players knew how to react. It was truly difficult to assess how serious or committed their governments were. History tells us that companies who took capital in early and built strong local franchises, sit on golden business opportunities today.

The coming African sunrise too has its sceptics, but as we sit debating this online, smart long term capital has already starting slipping in under the door. Yet to the majority, Africa continues to be seen as a high stakes gamble – as some glaring risks linger.

For one, the new regimes in North Africa have yet to demonstrate their intentions and competence. On the other hand, Sub Saharan Africa lives with the deadly scourge of AIDS scything through the most productive part of its workforce. Some of the world’s least developed countries live in this neighbourhood, where the human immunodeficiency virus has singularly reduced life expectancy at birth by a staggering 10 years.

Looking over the fence though, there is every reason to be hopeful. For three main reasons-

1. Data emerging over the last couple of years has shown AIDS prevention efforts are finally starting to bear fruit. In a few key countries, HIV transmission numbers are finally in remission. With better health education and health care, many countries could be seeing a light at the end of this tunnel of horrors. Today, Africa is the world’s fastest growing continent in population terms and as mortality improves, is poised to experience its own demographic dividend in the midst of an otherwise ageing world.

2. Similar to India and China in the 1990s, the African middle class is on the cusp of emerging as an economic force. This is a bellwether sign for enhanced consumption and infrastructure investments. Within Africa, Botswana is a shining example to its neighbours. It provides proof that in spite of challenging health circumstances, it is possible to kick-start a virtuous economic cycle. Other African countries could emulate Botswana’s story, but this will take political will, stable governance and public support.

3. Which brings me to the most important factor- aspiration. Social aspirations are the world’s most powerful economic force. In many developed countries, younger generations take what they have for granted. In many emerging markets, the same younger generations are no longer satisfied or resigned to the life they have. The Arab Spring across North Africa and the Middle East was a chilling reminder to administrators that the youth will no longer accept chronic unemployment and hopelessness as a way of life.

In Africa’s future, significant challenges exist. There remains huge scope for honest governance, resource conservation, basic literacy and improving health; and most of these challenges are so severe, they will take a decade or two just to exit negative trajectory. The present though may prove the best time for global companies to start analysing the African talent landscape, and maybe even investing in developing future talent. The opportunities are plenty. Private enterprise already plays a pivotal role in social healthcare support within many African communities. Can private involvement in relevant education, skills development and talent development be seen as a good investment today? Should HR put this on the management agenda?

I certainly think so. The 2010s will be Asia’s decade; the 2020s could be Africa’s.

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