The working-age population of Nigeria and other African countries will be the largest in the world by 2035, McKinsey & Co, a global management consulting firm has predicted.
The New York-based company specifically stated in a report titled "Lions Go Global: Deepening Africa's Ties to the United States," that the working-age population in Africa would be larger than that of China or India by 2035.
It pointed out that in a world where many countries are aging, including China, Africa stands out for the relative youthfulness of its population-a potential demographic dividend. However, it noted that the task ahead would be for Africa's leaders to bolster education and provide young people with the skills they need to secure employment, and to accelerate job creation.
In 2012, only 29 percent of Africa's labor force had stable, wage-paying jobs. The rest were employed in a variety of self-employment and household enterprises, scraping a living from subsistence agriculture or informal jobs in urban areas.
"Africa's trade ties with the world are expanding. In 2012, the continent's flows of goods, services, and finance were worth $1.6 trillion, or 82 per cent of gross democratic product (GDP), up from just $400 billion, or 60 percent of GDP, in 2000. "As in other countries, goods flows are Africa's largest, with inflows and outflows worth $1 trillion in 2012. Flows of services and finance are smaller, totaling around $300 billion each," it noted.
Although commodities continue to be a large share of Africa's exports, they account for less than half of goods exported by the continent. Capital-intensive goods, labor-intensive manufactured goods, and knowledge-intensive manufactured goods together comprise the majority of the continent's exports.
This, the report noted is a clear sign of structural change in Africa's economies, adding that the shift toward manufacturing and services needs to be accelerated.
It pointed out that in many African countries; the share of manufacturing in the economy had been stagnant or even declining over the past decade.
"Today may present a historic opportunity to boost Africa's goods flows even further. As wages rise in China, production is shifting to lower-wage Asian economies-and to some African countries.
"Manufacturing already receives most of the FDI in some countries including Morocco, Algeria, South Africa, Mozambique, and Egypt. "On current trends, manufacturing is set to create eight million jobs by 2020, a testament to wages and productivity levels that are competitive with other global low-cost manufacturing hubs," the report stated.
According to the report, evidence showed that productivity of African workers in well-managed factories was comparable with that in other countries.
However, it noted that Africa was yet to be fully engaged in the global economy as its potential suggests it could be.
The new McKinsey Global Institute Connectedness Index ranks countries based on goods, services, finance, people, and data and communication flows. The index shows that Africa ranks the lowest of any region in the world on its connections to the global economy.