This article was first published in the February 2018 Africa edition of Accounting and Business magazine.

If it often seems to lag behind the rest of the world, one thing Africa has that is potentially in its favour is a young population. With a median age of 19.5 years, way below the world figure of 30.1 years, it is safe to say that the continent is teeming with youth. Statistics from the United Nations show that the 10 youngest populations in the world are in Africa.

Unlike countries such as Japan and Germany that have ageing populations with attendant problems, Africa has a large youth base that if put to work is capable of turning the continent around. However, certain factors need to be in place before the continent can use this demographic to its advantage. These factors are improvements in education, attracting larger amounts of capital, and greater use of technology.

Statistics do show increases in school enrolment, but millions of children and young people are still not in school. According to UNESCO, more than a fifth of children aged six to 11, a third of those aged 12 to 14, and almost 60% of 15 to 17 year-olds, are not in school in sub-Saharan Africa. This needs to change.

The quality of education still leaves a lot to be desired, too. Low standards stem from several factors: a shortage of teachers and educational resources, poor infrastructure and inadequate focus by governments. According to the Africa-America Institute (AAI), the primary school student-teacher ratio in Africa in 2012 was 42:1. Compare that to 11.5:1 in the Netherlands, 14:1 in the US and 19:1 in Vietnam. The amount of instructional time is also low. In 2015, AAI reported that African countries mandated 720 hours in early primary education, rising to 830 hours by eighth grade. Compare that to recommended international standards of 830 to 1,000 hours.

To exploit its youthful population, the continent needs large amounts of capital. Although sub-Saharan Africa has attracted more foreign portfolio and direct investment in the past few years, it lags behind some other emerging market country groups. Political instability, weak institutions and difficulty in doing business are all factors here, compounded by poor macroeconomic policies and lack of accurate data.   

And it’s not just the quantity of capital, it’s the quality, too. This comes down to technology. Adoption of technologies such as smart telephony has been high in Africa, but the continent has been slow to apply technology to improve productivity. Agricultural and manufacturing practices are still old-school and fall short of international standards. This keeps productivity low.

The right combination of labour and capital will lead to greater economic output. As noted, Africa has no shortage of labour – its problems lie in the other areas. If Africa cannot get these right, it will not be able to make the most of its youth, a failure that will ultimately lead to disillusionment and social strife. It is time for governments and economic planners in sub-Saharan Africa to step up and exploit the asset that this youthful population represents. Failure to do so will turn it into a huge disadvantage.

Okey Umeano is head of risk management at Nigeria’s Securities and Exchange Commission