Challenges and Opportunities for Harnessing the Demographic Dividend in Africa

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Challenges and Opportunities for Harnessing the
Demographic Dividend in Africa

• Eliya Msiyaphazi Zulu (PhD.)
• Presented at the
• ICPD Beyond 2014 Africa Regional Conference
  Experts Meeting
• Addis Ababa, 30 September 2013 October 2, 2013

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Defining the Demographic Dividend

• The Demographic Dividend is the economic benefit
  arising from a significant increase in the ratio
  of working-aged adults relative to young
  dependents.
•  
• When birth rates decline significantly, the age
  structure shifts in favor of more working-aged
  adults, which can help accelerate economic growth
  through increased productivity, greater household
  savings, and lower costs for basic social
  services provided to children. 

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Asian Tigers Success Story

• Between ¼ to 1/3 of economic growth since 1970 in
  East and South East Asia can be attributed to the
  Demographic Dividend (Bloom and Williamson,
  1998 Mason, 2001)
• The economic success was made possible by
  sustained investments in education, health,
  family planning, and economic reforms

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Kenya and Thailands age structure differ
remarkably due to differences in birth rates
Source UN Population Division (MEDIUM VARIANT),
2011
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Ratio of working age to dependent population
Sub-Saharan Africa
Source UN Population Division (MEDIUM VARIANT),
2011
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Ratio of working age to dependent population
Sub-Saharan Africa
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Defining the Demographic Dividend

• The Demographic Dividend is the economic benefit
  arising from a significant increase in the ratio
  of working-aged adults relative to young
  dependents.  When birth rates decline
  significantly, the age structure shifts in favor
  of more working-aged adults, accelerating
  economic growth through increased productivity,
  greater household savings, and lower costs for
  basic social services provided to a young
  population. 

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Asian Tigers Success Story

• Between ¼ to 1/3 of economic growth since 1970 in
  East and South East Asia can be attributed to the
  Demographic Dividend (Bloom and Williamson,
  1998 Mason, 2001)
• The economic success was made possible by
  sustained investments in education, health,
  family planning, and economic reforms

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Higher human capital spending is associated with
lower fertility
SOURCE Mason, 2012
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Consumption and Labor Income by Age, Nigeria 2004
Labor surplus is less than 20 . Shortfall is
met by relying on Natural resources Remittances
Other asset income. Little remains for saving
and investment.
Economic needs of children are enormous about
80 of total labor income.
Source National Transfer Accounts estimates
(www.ntaccounts.org) - Mason 2012
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Consumption and Labor Income by Age, S Korea 2000
Source National Transfer Accounts estimates
(www.ntaccounts.org) - - Mason 2012
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Speeding the Demographic Transition

• Reinforce progress in reducing child mortality
• Enhance education, particularly female school
  enrollment and general female empowerment
• Expand access to effective family planning to
  reduce unplanned pregnancies and births

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There is urgent need to address relatively early
entry into marriage in West, Middle, and East
Africa
of women aged 20-24 who got married by age 15
and 18
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Governments and development partners must pledge
universal secondary education, especially in
West, Central and East Africa
of secondary school age boys and girls who are
enrolled in school
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Addressing barriers to contraceptive use would
reduce unmet need and fertility substantially
of Married women using modern FP and those with
unmet need for FP
Source DHS Analytical Series (Forthcoming)
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Due to differences in rates of decline in birth
rates, age structures in Africa vary widely
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Africas labour force surplus will peak later
at a lower level if fertility continues to
decline slowly
Tunisia
Source UN Population Division (Medium Variant)
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Earning the Demographic Dividend

• Macro-economic policies the demand side
• Public health
• Education
• Youth and Female Employment
• Unemployment and underemployment
• Export orientation for labor demand
• Channeling savings into investment
• Address huge inequities in quality of human
  capital and economic opportunities between the
  rich and the poor

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Women in many African countries are already
involved in informal economic activities. In
order to seize the DD, there should be a shift to
the formal sector
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Africas economic growth and natural resources
critical for development

• Economies expected to continue growing at a
  steady rate, despite global recession
• In 2014, Sub-Saharan Africa economies to grow by
  6.1 (global average of 4) IMF, April 2013
• Foreign Direct investment projected to increase
  from 37 in 2012 to 54 billion in 2015
• Infrastructure development is improving across
  the continent, especially in East and Southern
  Africa
• "It is expected that by 2020, only four or five
  countries in the region will not be involved in
  mineral exploitation of some kind (World Bank)
• Diaspora remittances playing a key role in
  development

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But Africas economic boom is not reducing
poverty creating enough jobs

• High levels of underemployment and reliance on
  the informal sector, especially among women and
  youth
• Heavy reliance on mining and mineral resources,
  which are often mismanaged and are not labour
  intensive
• Agricultural sector, which provides livelihood to
  most people, is still largely underdeveloped and
  vulnerable to climate change
• Rapid but poorly managed urbanization not
  effectively used as an engine for socioeconomic
  development
• "Better governance will need to underpin efforts
  to make growth more poverty reducing," (World
  Bank)

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Can Africa harness the DD?Yes but much more
needs to be done

1. Make a conscious decision that the status quo is
   not acceptable and not sustainable and mobilize
   the people to act.
2. Ensure universal access to family planning
   other SRH and general public health services and
   general empowerment of women, which will
   facilitate voluntary fertility decline and
   enhance womens participation in economic
   activities
3. Ensure universal access to quality and
   labour-market oriented education focused on
   developing innovation and economic skills, with
   particular focus on secondary and higher levels
   and closing all gender and related inequities.

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Africa can harness the DD?Yes but much more
needs to be done

1. Optimize the role of urbanization in development
   and enhance rural development and modernization
   of agriculture
2. Adopt economic policies and reforms that help
   develop industries of comparative advantage to
   ensure creation of secure jobs and livelihoods,
   which will enhance savings and investments
3. Improve governance and accountable use of pubic
   resources, including laws that prevent
   exploitative use of Africas natural resources by
   foreign investors and local companies

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Africa can harness the DD?Yes but much more
needs to be done

• Adopt inclusive and people centered development
  - the most important resource for development is
  human capital and not minerals or size of armies
  invest in people!
• Enhance local technical capacity in research,
  documentation and operationalization of Africas
  promising and success stories to inform scale-up
  and closure of the policy-implementation gaps

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We should embrace positive change ongoing in
Africa and learn from one-another
of married women using modern Family planning
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The DD and ICPD beyond 2014

• Its not the silver bullet solution to Africas
  development challenges its a bonus for doing
  what governments should to develop their
  countries and people, when you start from a high
  fertility state
• Is talking about population and the DD
  incompatible with the ICPD PoA?
• NO as long as governments and all stakeholders
  preserve the right of couples to decide freely
  and without coercion when they want to have
  children and how many children to have, and
  support those who want to have fewer children do
  so.
• DD reinforces ICPD PoA and MDGs - integrated
  development that focuses on developing quality
  human capital, job creation and economic
  security, empowering women and preserving sexual
  and reproductive health and rights.

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Thank You
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