Africa is often described as the world’s youngest continent, with about 60 percent of its population under the age of 25 and a large cohort aged 15–35. According to the United Nations’ World Population Prospects, this youthful profile has been cast as a potential engine of growth, a demographic dividend that could lift incomes and spur expansion.
But demographics are not destiny.
“Africa’s youth is not an asset as we think. “It’s a time bomb if we keep lying to them,” says Ibrahim Bah, founder of Africa Bank of Diaspora. “It’s time to stop selling hope and start building labour market architecture.”
His warning reflects a deep structural mismatch between Africa’s labour force and the economies meant to absorb it. Sub-Saharan Africa adds more than 10 million young people aged 15–35 to the labour force each year. Yet formal job creation has not kept pace.
According to employment data from the Mastercard Foundation and the International Labour Organization, roughly nine in ten young workers are in informal employment, often without contracts, protections, or stable earnings. Many are technically employed but remain poor. A significant share lives below the international poverty line despite working.
In Nigeria, youth labour stress remains structural even as headline unemployment has fallen under revised measurement. The National Bureau of Statistics previously reported youth unemployment at 53.4 percent in 2020 under its old methodology.
Under the revised Labour Force Survey, youth unemployment stood at 8.6 percent in Q3 2023, but this lower figure masks deep underutilisation: the majority of young Nigerians are concentrated in informal and low-productivity work, with wage employment representing only a small share of total jobs.
This pattern extends across Africa. In South Africa, youth unemployment remains among the highest globally at above 50 percent, reflecting weak labour absorption in a relatively formal economy. In Kenya and Ghana, official youth unemployment rates are lower, yet both countries contend with large informal sectors and vulnerable employment.
According to the International Labour Organization, roughly 86 percent of employment in Africa is informal, underscoring the continent’s central challenge: labour force growth continues to outpace the creation of stable, productivity-enhancing jobs.
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The productivity gap
The gap between participation and productivity is stark. Africa may soon command the largest workforce globally, but workforce size alone does not transform economies. Growth in many countries has been driven by extractive sectors or consumption rather than labour-intensive manufacturing. The result is a persistent disconnect between educational attainment and meaningful employment.
Bah argues that celebrating population growth without investing in labour market institutions, productive industries, and financing systems is self-deception. “We are mistaking demographics for development,” he says. “Leverage without structure becomes risk.”
Informality and exclusion
The risk is not abstract. High rates of youth unemployment and underemployment carry fiscal and political consequences. Idle or underutilised labour erodes tax bases, weakens social cohesion, and frustrates aspirations.
Urban survival entrepreneurship, street vending, ride-hailing, and small import trading may be interpreted as resilience, but they more accurately signal missing industries and scarce formal opportunities. When graduates drive for ride-hailing platforms or sell imported goods roadside, the issue is not a lack of ambition; it is the absence of scalable formal sectors.
Gender disparities deepen the challenge. Young women are disproportionately outside formal employment, constrained by unpaid care burdens and limited access to finance. Africa cannot capture a demographic dividend if half its young workforce remains structurally excluded.
Capital and institutional reform
Bola Tinubu, President of Nigeria, underscored a related point in an opinion piece for the Financial Times, arguing that Africa’s demographic growth makes affordable capital a global priority and that the continent needs a credit rating system of its own.
He noted that by mid-century, Africa will account for roughly a quarter of the world’s working-age population, a statistic that should prompt investment in institutions and market architecture, not mere celebration of headcounts.
What would that look like in practice? Bah points to improved financial infrastructure that converts informal economic activity into measurable, bankable productivity.
Digital credit systems, remittance analytics, and structured SME financing platforms can help, but only if embedded within industrial strategies and regulatory reform. “You cannot industrialise what you cannot finance,” he says. “And you cannot finance what you cannot measure.”
Africa’s youthful population remains a profound opportunity. But opportunity is conditional. Without deliberate labour market design, industrial expansion, and credible financing systems, population growth amplifies pressure rather than prosperity.
The applause for demographics is loud. The construction of institutions is slow. If the latter does not accelerate, the former will ring hollow.
