In this interview, Dr. Eliya Zulu, (Executive Director, AFIDEP), unpacks the concept of the ‘demographic dividend’ and the opportunities for Africa to achieve this.
What is a demographic dividend in layman’s terms?
This is the benefit that a country with high birth rates and high mortality can get if it makes the right investments to reduce birth rates rapidly. When birth rates go down, the population age structure changes (See Figure 1). In many African countries, the population age structure is shaped like a pyramid with a wide base, implying that there are more young children than the working age population. The result is that the working age population and the government end up spending most of their resources taking care of these dependants. Consequently, since the children are so many, the quality of healthcare, education and other social needs is of poor quality since the working age population and the government cannot keep up with the vast needs of the dependants.
On the other hand, when birth rates decline, families start having fewer dependent children. This increase in the ratio of the working age population relative to the dependent children can give the country an impetus for accelerated economic growth. With more people working, you produce more as a country as with more workers who are spending less on childcare, more money is saved for investments in the future.
For a country to take advantage of this new age structure, it must ensure that the larger labour force is well-educated, highly skilled and gainfully employed. However, having a larger labour force alone does not mean that the country will have a demographic dividend. The country must simultaneously make the right investments in education, health, job creation and governance in order to realise accelerated economic growth.
Figure 1: Population pyramids comparing Uganda and Malaysia
Why is there so much focus today on the need for African governments to focus on harnessing the demographic dividend?
In sub-Saharan Africa, women are still giving birth to an average of 5 children per woman. This means the population age structure is very bloated at the base; it’s a very young population. Therefore, we are increasingly realising that it’s difficult for countries to develop when we have such a huge child dependency burden. Addressing the high population growth rate and reducing the high child dependency ratios is critical for Africa’s development.
If we can facilitate a decline in fertility and help women and their partners have fewer children, then the fertility in Africa will reduce. If this is coupled with investments in socioeconomic sectors such as education, health, governance and job creation, then Africa has the impetus to achieve its socioeconomic development goals.
What are the strategic investments and policy priorities that African governments must put in place in order to harness the demographic dividend?
There are six main pillars for countries to harness the demographic dividend. First, you have to create the window of opportunity by ensuring sustained and rapid decline in birth rates. In sub-Saharan Africa, only 22% of women are using modern family planning methods, ranking very low against the global average of 54% of women using family planning. About 53 million women who want to delay the next birth or stop childbearing altogether in sub-Saharan Africa are not able to use modern methods of family planning. Some of the reasons include lack of access to family planning commodities due to stock-outs, inhibition by religious or cultural beliefs, fear of side effects mostly driven by myths, among others. Therefore, if governments and development partners invest in developing programmes that address these barriers of access and use of family planning, Africa can go a long way in reducing birth rates. In addition, investment in female education will keep more girls in school and they will be less likely to start having children early. In African countries, very large proportions of teenagers are either mothers or are pregnant. Consequently, their opportunities for progressing in life are cut short because of childbearing. Therefore, we not only have to invest in family planning but also in the education and empowerment of women in order to reduce fertility rates.
Second, African governments need to invest in reducing child mortality. Although we have made progress in reducing child mortality in Africa, the rate is much higher than the global average. If we continue the investments in immunisation to ensure children survive, this will give a greater impetus for reduction of fertility rates. When families are confident that their children will survive, then they’ll give birth to fewer children.
These two pillars open the window of opportunity for a demographic dividend. The other four pillars [discussed below] help countries achieve the demographic dividend. Countries like Tunisia had a very rapid fertility decline. They had the window of opportunity, but because they did not make these other investments, they ‘missed the boat’ as far as achieving the demographic dividend is concerned.
The first of these other pillars is investing in education. One of the major problems we face in Africa is the low quality of our human capital. We need to invest in education and reform our education systems so that we have a skilled labour force that can compete globally and engineer the economic growth needed to facilitate the demographic dividend. African countries have been focusing a lot on achieving universal basic education. However, we now need to shift our focus to universal secondary education and aim at having more people in tertiary institutions which will grant the relevant skills to make our populations productive.
The second pillar is investing in public health. For a country to have a very productive labour force, it not only needs to be educated and skilled, but also healthy. More critically, countries need to invest in child nutrition as it affects how well children can learn and also impacts the quality of the future labour force. In addition, the rapidly emerging non-communicable diseases are a matter of concern as they are mostly affecting the working-age population and need to be dealt with urgently.
The third pillar is steering economic growth and job creation. If you have a big labour force that is well educated and healthy but there are no jobs for this population, the country will not achieve a demographic dividend. Africa is currently facing what we call ‘jobless economic growth.’ The continent has sustained growth even during the global economic recession. But when you dig deeper, you learn that this economic growth is neither reducing poverty significantly nor creating enough jobs.This is because the growth is mostly propelled by sectors that do not have a high job multiplier effect such as mining, investment in infrastructure, etc. Each country therefore needs to evaluate its economic set up and identify the industries that have a comparative advantage. These are sectors that can grow the national cake more and at the same time create more jobs.
The final pillar is governance and accountability. Corruption is one of the major challenges Africa grapples with. So much money leaks out of the government system. If we have zero-tolerance towards corruption and ensure the money collected through taxes, international aid and other avenues is invested in the people, there is a high likelihood that we will achieve the other three pillars. However, it is important to note that governance is not just about corruption alone, but also accountability and service delivery. We need to ensure that at every level of the development process, we come up with evidence-informed interventions that give the best value for money. We must also ensure that the people charged with the responsibility of providing services are held to account.
The 6 pillars for harnessing the demographic dividend
If African governments do not make these investments, what will be the consequences?
African governments want to emulate the success that the Asian Tigers have had. These countries were at the same level of development as African countries in the sixties. However, they took a different development path and put emphasis on the empowerment of women and consequently their birth rates went down rapidly. However, African leaders are talking about emulating the Asian Tigers on the economic side. They want their countries to have high income and improved infrastructure but are not looking at the social development aspects of that equation. The Asian Tigers not only invested in infrastructure and job creation, but also focused on women empowerment, invested in education and made sure that family planning was readily available. If our birth rates go down but we don’t make these other investments, we will have a big labour force that is unemployed and the end result will be chaos as witnessed in Tunisia. Therefore, if we do not make all these investments, Africa will not develop as fast as we want it to. We will lose the opportunity to accelerate towards economic transformation and Africa will continue being a ‘dark continent’.
Scholars have described the demographic dividend as a ‘window of opportunity’ that must be well-timed. What does this really mean?
The demographic dividend can only be harnessed by countries that are starting from a position of high fertility and high mortality. If these decline rapidly, the age structure changes giving the country an impetus for economic growth. This change in age structure is not a long-lasting phenomenon and lasts for only a few decades. Once the base of the age structure is being undercut as birth-rates go down, you will have a big labour force.
Can Africa really harness the demographic dividend or is this an overstated phenomenon?
Some people argue that Africa is very different from East Asia and talking about the demographic dividend in relation to Africa is a waste of time. However, Africa has this unique opportunity as the window can open through accelerated fertility decline. Birth rates in Southern Africa have already gone down to about 2 children per woman. Therefore, we cannot say that it is against African culture for people to have fewer children. It’s already happening. In addition, Africa has resources that East Asia didn’t have such as oil. The massive remittances from the diaspora witnessed in Kenya and Uganda were also absent in the case of East Asia. It’s not an easy feat, but if countries remain focused on what needs to be done, 2 to 3 decades from now, African countries will be at a better place.
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