Leverage the Demographic Dividend in Sub-Saharan Africa
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This document discusses the demographic dividend, which is a one-time opportunity for rapid economic growth that stems from an increase in the working age population share. It notes that Sub-Saharan Africa's population is rapidly growing and aging, with the working age share projected to peak at 60% by 2075. However, countries are at different points in the transition. To realize the potential of the demographic dividend, governments need to invest in education, health, job growth, and good governance to strengthen social contracts and reduce inequality. Inaction could lead to increased poverty and social unrest from growing youth unemployment.
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Leverage the Demographic Dividend in Sub-Saharan Africa
- 1. TWITTER @TRANSFERPROJCT THE EXTRAORDINARY POTENTIAL OF THE DEMOGRAPHIC DIVIDEND
- 3. A one-time opportunity for rapid economic growth & increase in GDP per person stemming from an increase in the working age share of the population.
- 4. THE POPULATION AGE COMPOSITION IS RAPIDLY CHANGING IN MOST COUNTRIES IN SSA 1980 2020 2050 Population: 371M 1.1B 2.1B
- 5. The proportion of children decreasing while the proportion of elderly increasing (slowly). The Working-Age Share (WAS) is increasing from about 50% in 2000. It will peak at about 60% in 2075 and begin to decline. INCREASING WORKING AGE SHARE IS AN OPPORTUNITY TO REALISE THE DD 505254565860 WAS 0 20406080 100 1980 2000 2020 2050 2075 2100 Year Elderly (60+) Adults (15-60) Children (0-14) WAS (Axis2)
- 6. TANZANIA NIGER DIFFERENT COUNTRIES ARE ON DIFFERENT TRAJECTORIES 505254565860 WAS 0 20406080 100 1980 2000 2020 2050 2075 2100 Year Elderly (60+) Adults (15-60) Children (0-14) WAS (Axis2) 45505560 WAS 0 20406080 100 1980 2000 2020 2050 2075 2100 Year Elderly (60+) Adults (15-60) Children (0-14) WAS (Axis2)
- 7. The transition was more rapid (duration) and pronounced (peak WAS) in other regions compared to Sub-Saharan Africa. OTHER REGIONS HAVE GONE THROUGH THIS PHASE OF POPULATION CHANGE 485868 1950 1980 2000 2020 2050 2075 2100 LAC N. America Europe Oceania Asia SSA
- 8. 01. Fertility declining more slowly. 02. Initial conditions are less favorable, including human capital, poverty, infrastructure, environmental threats, quality of governance, and public debts. 03. Increased global competition in trade. 04. Increased mobility. 05. Rapid technological advancement. TRANSITION IN SSA HAS UNIQUE FEATURES & FACES DIFFERENT OPPORTUNITIES & CHALLENGES
- 9. THE SIZE OF THE DD VARIES WIDELY. IT IS NOT AUTOMATIC. Source: Abrigo, M (2016)
- 10. LOW PRODUCTIVITY AND/OR HIGH UNEMPLOYMENT NEGATIVELY AFFECTS THE SIZE OF THE DD 5 workers to 5 dependents (Stage 1) 10 sh/worker=5 per person 5.5 workers to 4.5 dependents (Stage 2: full employment) 10 sh/worker=5.5 per person 4.5 workers to 5.5 dependents (Stage 2: 1 person unemployed) 10 sh/worker=4.5 per person Child Adult Elderly 15 sh/worker=7.5 per person 15 sh/worker=8.25 per person 15 sh/worker=6.75 per person
- 11. What happens if governments do nothing?
- 12. Even if poverty rates remain unchanged or moderately reduce, the actual number of people in poverty will increase. A large number of unemployed and disillusioned youth is a recipe for disaster, the so-called ‘Population Bomb’. INACTION MAY NOT JUST PRESERVE THE STATUS QUO. POTENTIAL FOR SOCIAL & CIVIL UNREST IS HIGH.
- 13. IMPLICATIONS
- 14. 01. Development policies and programmes should explicitly take into account this ongoing change in the population structure 02. Invest in education to increase productivity 03. Invest in health to ensure a healthy workforce 04. Create enabling conditions for job growth 05. Good governance to strengthen social contracts, reduce inequality and promote efficiency. WHAT DO GOVERNMENTS NEED TO DO? Source: PRB, 4 Dividends
- 15. Old age pensions will help alleviate the burden on the working age population. Cash transfers have shown to be effective in helping with human capital accumulation and increasing productivity. A double bonus for maximizing the size of the DD. Increased investments in education, especially among the poor and vulnerable groups, from whom return on investment in highest. GREATER FUTURE DEMAND FOR SOCIAL PROTECTION SERVICES TO MANAGE POVERTY LEVELS
Editor's Notes
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- Different countries at different stages…. Countries in Western Europe, Americas, Australia and South East Asia already went through this transition
- On average people are having few children so the share of children in the population is decreasing. Increasing WAS implies each adult of working age has fewer people to take care of; and this is to spur the rapid economic growth Strong assumption is that all people of working age would be working
- The demographic transition (increased life expectancy followed by decline in fertility) leads to a change in the share of the working age population. The graph shows these transitions for different regions of the world. Africa is just now starting the transition, so the working age share is projected to increase through 2070. All other regions have gone through the transition, the window in LAC is ending now… Key success factors: high employment rates and increasing productivity (economic transformation from small-holder agricultural dominance to services) Corresponding investments in public services (health, roads, education) In Thailand, fertility rate declined from 4.4 to 2.1 in a space of 20 years!
- Better alignment of policy to suit the transition, better outcomes DD refers to growth in the GDP but not poverty and income distribution These are projections; countries that have pretty much completed the transition (SA, Seychelles, Mauritius, Cape Verde, Botswana) did not realize much of this.
- - Gradient of support (disposable income per active worker)
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- Statement on placard is profound both figuratively and literally…
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- Four pillars of education, health governance and economics (structural reforms) advocated by the AU