The region is going to be the world's main driver for working-age population growth in the next 30 years, making up 68% of total global growth, S&P said in a report.
"Countries in sub-Saharan Africa are undergoing the most significant demographic transition in their history," S&P's senior economist Satyam Panday said.
Sub-Saharan Africa, one of the poorest parts of the world and most vulnerable to famine, pandemics, and extreme weather due to climate change, experienced subdued growth in the last decade.
That might change as sharply declining levels of child birth and increasing life expectancy help accelerate economic growth, closing the gap with richer countries.
Fertility rates - the number of children per woman over her lifetime - dropped to 4.6 in 2019 from 6.3 in 1990. By 2050, it is projected to decrease by a third to around three children per woman, according to the United Nations.
With fewer children to support and more adults working, families can save more, gain better education for their children, spend more on goods and services, and invest in capital markets, lifting the economy.
"To reap these benefits, governments must wisely adapt their economic policies," Panday said.
The divergent experiences of East Asia and Latin America during their periods of demographic transition highlighted the differences the right policies can make.
In East Asia, where countries dramatically improved the quality of education and productivity, average economic growth was 5.1%. By comparison, Latin America saw only a 2.1% average growth.
"Latin America cut its fertility rate more slowly than Asia, so domestic savings grew more slowly too leaving them more dependent on foreign debt" that eventually led to the Latin American debt crisis in the 1980s, Renaissance Capital's chief global economist Charles Robertson said.
So far, growth projections for sub-Saharan African countries are more in line with the Latin American path, making the convergence with richer countries a tall order, the report said.
"In case jobs are not created in tandem, demographic dividend can actually become a curse" and a source of instability, as happened during the Arab Spring uprisings of a decade ago when jobless rates reached 30%, Panday said.
A third of the emerging markets countries, many of them in sub-Saharan Africa, face water management risks, a Moody's report said on Wednesday.
Weak water management has a knock-on effect on the economic strength by hurting food security, weakening growth, increasing social instability, and making it harder for sovereigns to access credit from financial markets.
(Reporting by Krisztian Sandor; Editing by Sonali Paul and Emelia Sithole-Matarise)
By Krisztian Sandor
