In the heart of a rapidly changing world, Professor Jeffrey Sachs’s keynote address at the Ọbafẹmi Awolọwọ Memorial Webinar highlighted a pivotal moment for Africa. As the global landscape shifts with the rise of great powers and the challenges of climate change, Africa stands at a crossroads, poised for unprecedented growth. The key question, however, is how the continent can harness its immense potential.
Sachs’s insights into Africa’s demographic dynamics reveal a continent bursting with youthful energy. With nearly half of its population of school age, Africa has a unique opportunity to invest in its human capital. Education is not merely a pathway to individual success; it is the cornerstone of economic growth and societal advancement. By prioritizing quality education, Africa can equip its youth with the skills necessary to thrive in a global economy increasingly defined by technological prowess.
Moreover, the call for substantial investment in infrastructure, technology, and natural resources cannot be ignored. Sachs emphasizes that Africa must adopt a high-growth strategy akin to those that propelled China and India to economic prominence. This involves not only enhancing physical infrastructure but also fostering an environment conducive to innovation and business development. A unified approach through the African Union and initiatives like the African Continental Free Trade Area is crucial to overcoming the existing barriers to trade and investment.
The financial strategies proposed by Sachs offer a roadmap for sustainable growth. By shifting towards long-term financing that aligns with the timelines of development projects, African nations can avoid the pitfalls of short-term debt cycles that hinder progress. The African Development Bank and other regional institutions must play a central role in mobilizing resources and supporting member states in their development journeys.
As we reflect on these insights, it becomes clear that Africa’s time is now. This is not merely an opportunity for growth; it is a chance to redefine the continent’s place in the global order. By acting in unison and embracing a strategy that prioritizes education, infrastructure, and sustainable investment, Africa can emerge as a key player in the 21st century.
The potential for rapid development is within Africa’s grasp. With visionary leadership and a commitment to collaboration, the continent can transform its challenges into opportunities. As we move forward, platforms like Newspot Nigeria will play an essential role in disseminating ideas and fostering discussions that will propel Africa into a prosperous future. Together, let us embrace this moment and work towards a brighter tomorrow for Africa.
— Newspot Nigeria
Professor Jeffrey Sachs’s Keynote Address at the Ọbafẹmi Awolọwọ Memorial Webinar
Our 21st Century World: Reflections and Projections’
March 6, 2025
Thank you for the opportunity to meet and discuss Africa’s economic and geopolitical development in the coming decades. We are navigating a period of tremendous disruption and flux. Donald Trump is part of that, but only a part. We also face massive geopolitical change, with the rise of China being the most significant reality of our age. Beyond China, other regions are experiencing remarkable technological advances and increasing geopolitical weight. India is crucial, as is Russia, another great power. I foresee Africa becoming one of the world’s major poles of growth and geopolitics in the coming decades.
The technological revolution is dramatically changing our economies, faster than we can keep up. Advances in artificial intelligence, robotics, and space-based technologies are reshaping governance and military functions. These technological changes are profound and accelerating, while the global environmental crisis is also escalating. In the past four years alone, Earth has warmed by an astounding 0.3 degrees Celsius, surpassing the 1.5 degrees centigrade limit agreed upon in the Paris Climate Agreement of 2015. Additionally, we are witnessing significant demographic shifts, with some regions experiencing population decline.
China’s population has peaked at 1.4 billion and is projected to decline to under 1 billion by the century’s end, potentially even down to 700 million, according to UN forecasts. In contrast, Africa’s population, currently about 1.5 billion, could reach approximately 2.4 billion by mid-century and up to 3.8 billion by the century’s end, accounting for around 37% of the projected world population.
Given these changes, the key question for Africa is how the continent and the African Union should position themselves for success in the coming years. How can Africa move forward rapidly in economic, technological, social, cultural, and infrastructural terms? How should Africa confront climate change, threats to biodiversity, and the degradation of ecosystems like the Congo Basin rainforests? Furthermore, how can Africa effectively engage in a multipolar geopolitical environment, where powers such as the United States, Russia, China, and India are vying for the continent’s natural resources?
Earlier today, I participated in a Zoom meeting in India focused on strategic minerals. The discussion centered on how major powers would secure their strategic minerals—copper, cobalt, rare earths, and others. While Africa was the subject of discussion, it was not included as a participant. Similarly, Ukraine is currently facing challenges due to competition over its strategic minerals.
In light of this, what do I recommend for Africa’s 1.5 billion people, soon to grow to 2 billion and beyond? I believe the next 40 years must be a period of rapid economic growth, and Africa should aim for growth rates of 8% to 10% per year, akin to the paths taken by China and India. China achieved roughly 10% annual growth from 1980 to 2020, leading to more than a 30-fold increase in its economy. India is currently growing at about 6% per year, with expectations to reach around 7%.
Currently, Africa is growing at only 3% to 4% per year in aggregate. Given a population growth rate of approximately 2.3%, this translates to just 1-2% annual per capita growth, which is insufficient. Thus, Africa must accelerate its growth rate.
High growth is driven by high investment rates, with five crucial areas for investment: human capital, infrastructure, intellectual capital (R&D), business capital, and natural capital.
- Human Capital: Investment in health, nutrition, education, and skills for Africa’s youth is paramount. Africa has the youngest population globally, with about 45% of its people of school age. A quality education is essential; dropping out of school can lead to a lifetime of lost income and well-being. High educational attainment is critical for growth and yields an estimated internal rate of return (IRR) of around 20% for educating a child through upper secondary.
- Infrastructure: Investment in transport, power grids, digital networks, water, sanitation, and climate resilience is necessary.
- Technology and Innovation: Governments must invest in R&D to harness technological advances. While many technologies originate abroad, local adaptation and reconfiguration require domestic R&D. Africa currently spends a tiny fraction of its GDP on R&D, while countries like China and the US invest around 3% and Korea around 5%.
- Business Investment: This will flourish when skilled workers, high-quality infrastructure, and advanced technologies are present. Businesses will then expand into sectors beyond traditional mining and agriculture.
- Natural Capital: Africa’s rich biodiversity and ecosystems are under threat and must be protected, constituting an investment in natural capital to prevent degradation.
I believe Africa can achieve an investment rate of at least 40% of GDP, similar to China, but this demands a coherent strategy at the African Union level. The African Continental Free Trade Area is a vital component, yet significant barriers to trade still exist, including regulatory, border, and infrastructural challenges. Continental-scale infrastructure is critical; Africa will not achieve rapid growth one country at a time but rather as a unified continent.
With 1.5 billion people, Africa can mirror the rapid growth seen in China and India, leveraging a well-educated population and a large internal market. This agenda necessitates a more effective and consequential African Union than in the past. The AU has facilitated many agreements but has yet to fulfill its potential role in the African-wide economy. The NEPAD projects, which focus on trans-border initiatives, must be implemented effectively and align with the African Continental Free Trade Area.
This approach requires a financing strategy to support high investment rates. Contrary to common belief, Africa’s debt is not excessive but rather too low. The continent should borrow more from international capital markets but not in the short-term maturities it has used. When borrowing short-term for long-term growth, governments face crises when debts come due, leading to defaults and a downward spiral of development.
The challenge lies in the mismatch between the duration of debt and the timelines for development. If governments borrow short-term for long-term projects, they cannot generate the revenues needed to repay loans. Thus, the core issue is the underutilization and limited availability of long-term financing at reasonable interest rates that reflect Africa’s growth potential.
If capital markets recognize Africa’s potential for the highest growth rates globally, they should lend long-term. The focus should be on 25, 30, or even 40-year lending, necessitating a robust financial strategy. A key component should be scaling up the African Development Bank (AfDB), which currently lends about $5-10 billion a year. This should increase to potentially $100 billion per year in the coming decade.
The AfDB should not wait for the US or Europe to act; it must take the initiative. The US and Europe are unlikely to significantly scale up the AfDB or invest substantially in African development. Instead, Africa must seek partners committed to its long-term growth, including nations in the Gulf region, India, and China.
The AfDB is not the only multilateral bank in Africa; numerous others exist and should be significantly scaled up. New banks could be established, such as a West African Development Bank or an East African Development Bank. When well-designed and managed, multilateral banks can attract capital on better terms than individual sovereign states.
An example of this is the Latin American Development Fund (CAF), where sub-investment-grade sovereigns pooled resources to gain access to lower-cost international bonds. This illustrates how unity and multilateralism can enhance leverage.
I had the privilege of collaborating with the AfDB on a study detailing how the African Union can pursue a high-growth agenda through 2063. Nigeria, as Africa’s most populous nation, has a critical leadership role in this endeavor. If Africa succeeds as a whole, Nigeria will prosper along with the continent.
We will face a tumultuous global political landscape in the coming years. Donald Trump may withdraw the US from the Paris Agreement, and the US has recently vetoed a standard UN resolution endorsing the Sustainable Development Goals. However, Africa should remain undeterred; this is the time for rapid development. By acting in unison, Africa can achieve unprecedented success in the next 40 years, a success that will resonate globally.
Thank you for allowing me to share these remarks. I look forward to brainstorming with you on Africa’s rapid and sustainable development. Thank you very much.
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