Digging for (digital) gold: How Africa can build a prosperous future economy
Africa’s immense mineral and natural resources wealth has powered the continent’s economy for generations.
But the world is rapidly moving to a more sustainable, less resource-intensive future. As we celebrate Africa Month, the question is: can African economies adapt to ensure the continent can thrive and prosper well into the next century?
United Nations data suggests that Africa is home to 30% of global mineral deposits, 12% of all oil reserves, and 8% of the world’s gas reserves. As much as 40% of global gold deposits — and 90% of platinum and chromium — can be found under African soil.
Africa produced more than half the world’s diamonds in 2020, with countries such as Botswana and South Africa continuing their leading role in the global diamond market. In the 1970s, South Africa alone produced two-thirds of the world’s gold, a legacy that continues, although the country has been overtaken by China, Australia and, closer to home, Ghana.
The continent isn’t only bestowed with abundant legacy resources such as diamonds and gold. Many of the minerals needed to power next-generation technologies are also abundant in Africa.
The Democratic Republic of the Congo alone accounted for nearly two-thirds (63%) of the world’s cobalt in 2019, and production of lithium — a crucial manufacturing component of smartphones, laptops and electric vehicles — is expected to grow from 40 000 tonnes in 2023 to nearly half a million tonnes by the end of the decade.
But there is a finite amount of natural resources remaining under African soil. At some point in the future, African countries will have to move away from their reliance on resource extraction to power their economies.
Already, some experts suggest the world has reached peak gold production and that the volume of gold produced a year will decline from here onward.
This is bad news for a continent that heavily relies on the revenue generated by its natural resources. A UN report found that the African mining sector contributed nearly 7% of the continent’s GDP in 2017, while minerals represented nearly two-thirds (62%) of the continent’s exports in 2019.
But what if Africa was already endowed with a natural resource to beat all others, one that can end the continent’s reliance on digging for wealth and power its economy through innovation, ingenuity and productivity? What if the continent’s abundance of youthful talent could be mobilised?
Talent is the new gold
Africa’s population will grow at an astonishing rate throughout this century. While populations in more developed regions stagnate and decline, Africa’s youthful population is thriving. Between 2020 and 2050, 1.2 billion people are expected to be added to Africa’s population. By 2100, UN data predicts that the continent’s population will reach 4.3 billion, more than tripling its current size.
Most of this growth will be concentrated in younger age groups. Africa’s working-age population is set to increase by two-thirds, reaching more than 600 million by 2030.
As millions of increasingly well-educated young Africans join the workforce every year, global organisations are likely to rely on African talent to fill critical skills shortages. The World Economic Forum estimates that up to 85 million jobs will remain unfilled by 2030, creating an $8.5 trillion gap between possible and actual revenues.
Bear in mind that the revenue gap is not caused by technical limitations on realising the effect of the next wave of technological innovation — artificial intelligence, connected devices, intelligent enterprises — but rather a shortage of sufficiently skilled talent to implement and manage these technologies.
It’s therefore not a stretch to say Africa’s greatest natural resource is its talented, youthful workforce.
A study by Gallup found that digital skills generate $18.5 trillion in annual economic value, or 12% of global GDP. The same study found that advanced digital workers have higher rates of job satisfaction and feel more secure in their jobs than less digitally-able workers.
Mobilising Africa’s youthful workforce through rapid and extensive digital skills development holds the key to unlocking the continent’s economic potential.
African countries should invest some of the revenue generated from their natural resources in building digital skills capacity. Infrastructure such as 5G internet and extensive mobile coverage is essential, especially in countries where legacy fixed-line infrastructure is lacking.
A government-led national digital skills strategy should be a priority for every education department on the continent.
Public-private partnerships that enable collaboration between governments and the corporate sector can help focus efforts, ensuring that any digital skills development initiatives meet real-world business needs and produce talent that can easily be absorbed into the formal economy.
Private sector organisations can partner with social enterprises and nonprofit organisations that build or enhance digital skills.
Organisations should also champion their own digital skills development efforts to ensure they have access to work-ready digital skills.
Efforts at expanding access to digital learning opportunities should also continue. Africa Code Week, for example, has provided basic coding training to 14.6 million African youth in 48 countries. With a girl participation rate of 47%, the initiative has also made great strides in enabling digital learning opportunities for all who can benefit.
The African continent stands at the cusp of a new era, one not defined by its mineral wealth but by its extraordinary talent and innovation. Preparing and mobilising the continent’s youthful workforce should be a priority for every public and private sector organisation in every African country. Smart investments into digital skills now will pay dividends for generations to come, and help the continent build a prosperous life for all.
Cathy Smith is managing director at SAP Africa.
The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.