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Prospects for Economic Growth in Nigeria – a demographic perspective
 

Prospects for Economic Growth in Nigeria – a demographic perspective

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Presentation to the Task Force by its co-chair, David Bloom. The presentation sets out salient facts describing Nigeria’s economy and population; explains the theory of the demographic dividend; and ...

Presentation to the Task Force by its co-chair, David Bloom. The presentation sets out salient facts describing Nigeria’s economy and population; explains the theory of the demographic dividend; and asks whether there is a demographic dividend in Nigeria’s future.

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    Prospects for Economic Growth in Nigeria – a demographic perspective Prospects for Economic Growth in Nigeria – a demographic perspective Presentation Transcript

    • Prospects for Economic Growth in Nigeria: A Demographic Perspective Nigeria: The Next Generation First Meeting of the Task Force Abuja, Nigeria December 4-5, 2009
    • Structure of the presentation
      • Salient facts describing Nigeria’s economy and population
      • The demographic dividend: theory and evidence
      • Is there a demographic dividend in Nigeria’s future?
      • Salient facts describing
      • Nigeria’s economy and population
    • Nigeria’s economy has stagnated: No growth in income per capita Source: World Development Indicators, 2008
    • Indonesia and Pakistan have seen economic growth Source: World Development Indicators, 2008
    • Nigeria’s economy compared with world regions Source: World Development Indicators, 2008
    • Comparing economic growth rates Source: World Development Indicators, 2008 average annual growth rate of GDP/capita (PPP), 1980 - 2006
    • Nigeria’s population has grown rapidly Source: UN, World Population Prospects, 2008
    • Nigeria’s fertility rate has started to fall Source: UN, World Population Prospects, 2008
    • The infant mortality rate has fallen, but not steadily Source: UN, World Population Prospects, 2008
    • Life expectancy has risen, but not steadily Source: UN, World Population Prospects, 2008
    • Crude birth and death rates are falling Source: UN, World Population Prospects, 2008
    • Population growth has been rapid Source: UN, World Population Prospects, 2008
    • The ratio of working-age to non-working-age people has been pretty steady Source: UN, World Population Prospects, 2008
    • Changing age structure, 1950-2010: A 3-dimensional view Source: UN, World Population Prospects 2008
    • Education level varies by population group
      • Educational attainment remains quite low:
        • 37% of the population has no formal schooling
        • 47% is illiterate
      • Over 50% of Muslims and traditionalists have no formal schooling.
      • 50% of Christians have secondary or higher education.
      • Rural residents and those in the North have lower educational attainment.
    • Employment
      • Unemployment is well above 20%, except for those over age 35.
      • Unemployment doesn’t vary much by rural/urban residence.
      • It is highest among those with a secondary education (48%).
        • This group seems likely to be underemployed.
      • Women’s labor force participation lags far behind men’s.
    • Marriage, first birth, and contraception
      • Age at first marriage and first birth are higher
        • in the South
        • in urban areas
        • among those with higher levels of education, and
        • among Christians
      • Those who only use traditional or folkloric contraceptive methods have much higher fertility.
      • There is significant unmet need for contraception.
    • Fertility varies by population group
      • Fertility rates are higher:
        • in the North
        • in rural areas
        • among those with less education
        • among the poor, and
        • among Muslims and traditionalists
    • What we’ve seen so far
      • Economics:
        • Low level of income
        • High inequality
        • Little or no economic growth
      • Demographics:
        • Rapid population growth
        • High fertility
        • Large population of young people
      • The demographic dividend:
      • Theory and evidence
    • Average annual growth rate of GDP per capita, 1975-2005 Source: World Bank, World Development Indicators 2008
    • Changing age structure, 1960-2005 Source: UN, World Population Prospects
    • The Demographic Transition Population growth rate time Death rate Birth rate
    • Population age structure is a robust and powerful predictor of economic growth
      • Demographics
      One third (about 2 percentage points) of the growth of income per capita in East Asia during 1965-90 is attributable to the independent influence of changes in age structure. Income
    • Reaping the demographic dividend is not automatic, and may not be permanent
      • Demography is not destiny – it just creates potential
        • for economic growth and poverty reduction
        • and also, for social, political, and economic instability
      • March of the Silver-Haired Generation
    • Complementary policies
      • Need to catalyze demographic transition
      • Need to accelerate demographic transition – esp. fertility decline
      • Need compatible policies in other areas
        • education
        • health
        • labor market
        • trade
        • governance
        • macroeconomic management
      • Need good relationships with other countries
      • Is there a demographic dividend in
      • Nigeria’s future?
    • Nigeria’s population is set to soar Source: UN, World Population Prospects, 2008
    • The fertility rate is expected to continue falling Source: UN, World Population Prospects, 2008
    • The infant mortality rate is projected to continue falling Source: UN, World Population Prospects, 2008
    • Life expectancy will continue to rise Source: UN, World Population Prospects, 2008
    • Crude birth and death rates will continue to fall Source: UN, World Population Prospects, 2008
    • Population growth rate will decline substantially Source: UN, World Population Prospects, 2008
    • The ratio of working-age to non-working-age people is set to increase dramatically Source: UN, World Population Prospects, 2008
    • Growth of the working-age to non-working-age ratio, 1960-2050 ( under 3 UN fertility scenarios) Source: UN, World Population Prospects 2008
    • The bottom line: demographic change can lead to economic growth
    • Comparing the growth rates of the working-age and non-working-age population Source: UN, World Population Prospects, 2008
    • Changing age structure, 1960-2050: Nigeria compared with Indonesia and Pakistan Source: UN, World Population Prospects 2008
    • Changing age structure, 1960-2050: Nigeria compared with East Asia Source: UN, World Population Prospects 2008
    • The size of the 60+ population will increase dramatically Source: UN, World Population Prospects, 2008
    • Reaping the demographic dividend: cautionary points regarding Nigeria
      • Not all of the general points about the factors needed to realize the demographic dividend necessarily apply to Nigeria.
      • In particular:
        • Trade policy is important, but it may be more important to focus on diversification of the economy away from dependence on oil exports.
        • Minimum wage laws and unions may affect only a small portion of Nigeria’s labor market.
    • Take-home messages
      • Demography matters.
      • Demography matters a lot.
      • There is potentially a sizeable demographic dividend in Nigeria’s future.
        • But, will Nigeria collect this dividend?