Achankeng Leke, Director of McKinsey & Company, South Africa, questions whether Africa could experience a wave of protest. The interview is part of the Risk Response Network’s “What if?” series, which explores various hypothetical risk scenarios.
What is your main field of expertise and current research?
My main field of expertise is Africa. I am a Senior Partner at McKinsey & Company and lead a lot of McKinsey’s work across Africa. We do a lot of research on economic development and on what it will take to drive the continuous growth of Africa.
Given your research, what would you say is the most under-appreciated risk?
I’m going to take an Africa focus here. I would argue that one of the biggest risks for the continent is the effect of the Arab Spring and whether it could turn into an African Summer. There is the potential for dissent across Sub-Saharan Africa from young people, because despite the growth and economic development, there is a lack of employment opportunities.
How would you frame this risk as a hypothetical scenario: “what if” this was to actually happen?
What if the Arab Spring turned into an African Summer? What if our young African brothers and sisters across cities in Sub-Saharan Africa stood up and started to fight back and drive for change because of the lack of opportunities that they have encountered over the last 10-20 years?
Are you seeing the seeds of growing dissent?
We are definitely seeing root causes that are common across the continent. The first is growth, but without much development. The continent is growing at 5 to 5.5% on average, but people on the ground are not feeling it – poverty is only falling at 1% per annum for example.
Second is the lack of employment opportunities. The International Labour Organisation (ILO) puts unemployment only at 9% of Africa’s workforce, but 63% of the workforce is in “vulnerable employment,” that is people working in non-stable paying jobs. There are large numbers of young, educated Africans who just have no job opportunities at all, and are not trained to be entrepreneurs and create their own work. For example, across Africa, 20% of secondary-educated people and 17% of tertiary-educated people are unemployed.
Third is a very young population across most African countries that is looking for opportunities. For example, in South Africa, 75% of all unemployment is among youth. And trends suggest more youth are coming through. By 2040, Africa will have 1 billion working-age people, more than China or India. These young people would argue that leaders are looking out for themselves and not for the good of the continent or the individual states.
Would you see a similar pattern to the Arab Spring of protest being mobilised through new media?
It could unfold in a similar way, although it’s not clear to what extent new media would be used in Sub-Saharan Africa. But I can see a situation where the youth start to stand up and fight back due to the lack of opportunities being created.
How well do you think the region is prepared for such a contingency?
I believe it is a long-term problem and governments are very aware of the issue. Governments are putting in place programmes or looking for policies and changes that will really drive, for example, job creation. The new government in Nigeria is very vocal about its focus on job creation for the country over the next four years. South Africa is the same.
However, it will take time for them to implement these programmes successfully, because unemployment is a massive problem.
What is your top mitigation approach for this risk?
Last year, McKinsey looked at what was driving growth in Africa and how sustainable this growth is. The evidence points to its sustainability due to factors such as the race for commodities, foreign capital in-flows and a rising middle class – but one of the big issues is that the existing inequity hampers job creation. It is a huge undertaking to really understand what the job creation imperative is at a granular level.
First, governments need to be acutely aware of the problem and how big it is going to be in 10 years if the situation is not addressed now. Some governments are taking steps, but not enough. Once there is awareness, governments should consider what mechanisms can be put in place to deal with the issue. There are three sets of problems – the first is formal employment and this varies by country. Here, we need to address questions such as how much can you really drive growth in formal sectors, and what new sectors of the economy can be opened up to create jobs.
Second is the vulnerable employment problem, a big part of which can be addressed with SMEs. They can look at how to help people become entrepreneurs and employ others, because there are limitations to how many jobs it is possible to create in the formal sector.
Third is sustainable agriculture. About 40% of the employment problem in Africa lies in the agriculture sector. It is not necessarily about moving farmers into formal jobs; it is also about empowering farmers and helping them increase their income levels.
These are very different problems and leaders need to understand the magnitude of each within individual countries and the policies and programmes required to address them.
On the flip side, what opportunities do you see?
I see a ton of opportunities for Africa. The positive side is that if you look 10, 20, 30 years from now, Africa will have a larger number of youth than China or India. There are tremendous opportunities to capitalise if we leverage this power. For example, there are opportunities to grow the continent and opportunities for Africa to become an outsourcing centre of choice for companies around the world.
However, all of the above rests on us being able to educate our people and help them find jobs or train them to become entrepreneurs, so they can create jobs not only for themselves but also for others.
Will youth be impacted the most? Is there an urge right now to take hold of these opportunities?
Absolutely. And rightly so – it is the youth who will benefit from these opportunities. Education is the key – it will provide them with immense influence.
This is not just about addressing job creation. It goes back to the whole education system. It’s about ensuring that youth are educated and that this education actually prepares them for the workforce.
In this scenario, we can imagine a situation where we continue to grow at probably 6 and even 7-8%. We create significant opportunities in the formal sector to absorb the youth who are coming out of school. We create the right policies and frameworks to encourage them to be entrepreneurs, set up companies and grow their businesses to a global scale – not just small, local entrepreneurs, but really scale them up. And we create programmes that help farmers to increase their income levels and lead a better life. That is really the benefit of all of this.
Pictured: A demonstrator shouts outside Parliament buildings in Kenya’s capital Nairobi (Reuters)