The Contribution of Labour, Capital and Technology to Growth

This report analyzes the drivers of economic growth in Africa, focusing on the roles of labour, capital, and multifactor productivity (MFP). It argues that due to a late demographic dividend, Africa's growth over the next two decades must rely primarily on physical capital accumulation and technological gains rather than labour-fueled growth.

• Historically, Africa's economic growth was hindered by the extraction of labour through slavery from the 15th century and subsequent colonialism, which left sub-Saharan populations with limited education and infrastructure for global trade. Post-independence industrialization efforts in countries such as Ghana, Nigeria, Burkina Faso, Guinea, and the former Ivory Coast failed because they lacked a foundation in agriculture and relied on prestige projects without domestic economic linkages.
• Africa is approaching a demographic window of opportunity. The ratio of working-age persons to dependents improved to 1.3 to one by 2023 and is projected to reach 1.6 to one by 2043. A ratio of 1.7 to one is identified as the threshold for potential rapid labour-fueled growth in the second half of the century, a level currently only met by some island states and a few North African countries.
• In the immediate future (the next two decades), economic growth in Africa is expected to be driven by increased investment in physical capital and technological progress (MFP) rather than labour, as the continent cannot emulate the labour-fueled growth of other regions. In low- and lower-middle-income countries, labour contributes the least to sustainable growth due to high dependency ratios and low employment growth.
• The primary constraints on growth vary by income level: for low- and lower-middle-income groups, the largest drag is poor physical capital (infrastructure), whereas for upper-middle-income countries, the main constraints are poor human capital, specifically health and education outcomes.

APA

Cilliers, J. (2026). The Contribution of Labour, Capital and Technology to Growth. Institute for Security Studies. https://futures.issafrica.org/thematic/guide.pdf?thematic=17-combined-agenda-2063&topic=03-contribution-of-labour

Chicago

Cilliers, Jakkie. The Contribution of Labour, Capital and Technology to Growth. Institute for Security Studies, 2026. https://futures.issafrica.org/thematic/guide.pdf?thematic=17-combined-agenda-2063&topic=03-contribution-of-labour.

Wikipedia

{{cite report |last1=Cilliers |first1=Jakkie |title=The Contribution of Labour, Capital and Technology to Growth |publisher=Institute for Security Studies |date=29 March 2026 |url=https://futures.issafrica.org/thematic/guide.pdf?thematic=17-combined-agenda-2063&topic=03-contribution-of-labour |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cilliers2026contribution, author = {Cilliers, Jakkie}, title = {{The Contribution of Labour, Capital and Technology to Growth}}, institution = {Institute for Security Studies}, year = {2026}, month = mar, url = {https://futures.issafrica.org/thematic/guide.pdf?thematic=17-combined-agenda-2063&topic=03-contribution-of-labour}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }