The FINANCIAL — Government policies and actions taken today in Africa can increase the likelihood of capturing the potential benefits from the region’s rapid population growth and propel economic takeoff, according to a new report from the World Bank Group.
The report, Africa’s Demographic Transition: Dividend or Disaster? says that with the right policies, such as reducing fertility rates, and increasing investments in education and health care, especially for women and girls, countries can reap the benefits of demographic change and thereby enhance the overall development of a nation.
“Population growth will not contribute to economic growth as expected without the right investments in human capital,” says Makhtar Diop, World Bank Vice President for Africa. “Entrants into the labor market must have the proper quality education and health care in order for Africa to fully realize its demographic dividend.”
The report says that by 2060 there will be about 2.8 billion people in Africa out of a world population of 10 billion. It lays out a positive agenda for African countries that can increase the likelihood of capturing the potential social and economic benefits of population growth to create a demographic dividend in Sub-Saharan Africa.
The region is already experiencing rapidly declining child mortality, increasing female school enrollment, renewed high-level political support for tackling demographic challenges, and rapid economic growth. In capital cities such as Addis Ababa, Ethiopia; and Accra, Ghana, the fertility rate, or number of births per woman, is at an all-time low of approximately two births per woman.
Conversely, in some countries fertility rates are as high as 5.4 children born per women (2005–2010) – a persistent challenge. In sharp contrast, fertility rates are significantly lower in other regions of the world. In East Asia, for example, fertility declined from 5.6 to 1.6 from 1950-2010.
“The report looks at lessons that can be applied from East Asia, Latin America, and the Middle East. Yet Sub-Saharan Africa exhibits two unique demographic characteristics. First, it is the only region in the world that is still at a very early stage of the demographic transition,” said Abdo Yazbeck, Lead Economist in the Health, Nutrition, and Population Global Practice of the World Bank.
Secondly, the region is heterogeneous. While a small number of countries in Africa are far along with fertility rates that are below replacement levels, many others are far behind. These large differences argue for differentiated policies for each country, that target different sectors and processes, the report notes.
Africa’s Demographic Transition: Dividend or Disaster? calls for broad policy changes and actions that can support a rapid shift in demographics towards a large demographic dividend throughout Africa.
First, countries can empower women and girls by improving their health, education and skills, and providing them with greater market, social, and decision-making power. In countries where fertility is falling and the working-age share is rising, the focus should be on creating high-productivity employment and encouraging investments in the health and education for the smaller youth cohort.
In more mature economies countries should focus on generating domestic savings and supporting female labor-force participation outside the home. Steps to ensure sufficient savings for retirement will help support an aging population that will emerge as the demographic transition comes to an end.
In fragile states, the lack of security may make any interventions difficult. In these areas the emphasis should be placed on maintaining child health, access to health care, and family planning, where possible, to develop the preconditions for a demographic dividend.
While this report takes a regional approach to outlining the potential for a demographic dividend and presents broad recommendations, each country should customize its approach to its own challenges and opportunities.