Aging populations in developed markets has been a concern for some time, but population growth is also slowing in some emerging markets and working-age population shares are falling everywhere but Africa. “We see Africa’s voice in global deliberations—and the role of African financial markets—as likely to be increasingly important,” write Citi analysts Nathan Sheets and Robert Sockin. Its share of the global population increases from 15 percent to 20 percent, and the relative size of its workforce rises while dropping everywhere else.

It’s clear that the percentage of a country that is actually at work impacts GDP, but Sheets and Sockin think this effect may be bigger than some people appreciate. They give the example of Japan, whose working-age population share peaked just before its two decades of economic troubles began. “We do not mean to suggest that demographic stresses alone are sufficient to explain Japan’s twenty-year sclerosis, but the correlations are striking and indicate that demographics may have played a meaningful role,” they write. They expect similar trends to threaten GDP growth in China, which they call an “under-appreciated global risk.”

Workforce Africa

Developed markets see workforce percentages plummet

The popular image of emerging markets with booming, young populations may cease to be true in the next few years. As developed markets see workforce percentages plummet, they will flatten out for emerging markets overall. Specifically, they will continue to rise in Africa, and either decrease or flatten out in Latin America and emerging Asia. China has demographics similar to developed nations

working age population share

Working-age population is a strong advantage

Working-age population isn’t a stand in for GDP growth (and Sheets and Sockin don’t claim that it is), but it is a strong advantage that African markets will have over other regions. Governments that can translate a growing workforce into growing productivity, something that will vary widely from country to country, will see their countries become some of the most attractive investment opportunities around.

These trends will also increase the incentives for immigration from Africa to developed markets as the first becomes hungry for labor and the second is unable to provide enough opportunity to meet the needs of its still rapidly growing population.