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AFIDEP 1st Bi-Annual Newsletter 2015

Most African nations struggle to provide quality jobs for their youth. Photo: UNAMID

Over the last few years, the concept of the demographic dividend has gained momentum among African decision makers as an important pathway to accelerated development. AFIDEP has been at the centre of promoting this paradigm in the region through advocacy and providing technical expertise to governments to assess the potential of their countries to harness the demographic dividend.

In addition, AFIDEP assists these governments to identify the game-changer policy actions that will enable realisation of the maximum possible demographic dividend.

The demographic dividend is defined as the economic benefit arising from a significant increase in the ratio of working age adults relative to young dependents that result from a significant decline in death and birth rates. The change in age structure that opens the window of opportunity to the demographic dividend is initiated by a rapid decline in the average number of children that women have.

To harness the demographic dividend, countries need to adopt comprehensive reforms and simultaneously invest in five key pillars:

Family Planning: Governments need to facilitate rapid fertility decline through facilitating use of effective contraceptive methods, enhanced child survival, and improved education and general empowerment of women.

Health: There needs to be adequate investments in health status to nurture a healthy and productive labour force.

Education and skills development: Countries should enhance investments in high-level education to develop a well educated, skilled, and innovative labour force.

Economic reforms: The reforms are geared towards accelerating economic growth and job creation for the rapidly
expanding labour force.

Governance: Governments must put in place fiscal policies and governance reforms that enhance savings, attract
foreign direct investment (FDI) and ensure efficiency and accountability in use of public resources.

Highlights of activities over the past one year

AFIDEP conducted successful studies in four African countries that included Uganda, Tanzania, Mozambique
and Zambia on how the respective governments can fully harness the demographic dividend.

Working with government ministries and agencies as the lead partner in the country studies has been a preferred strategy that promotes buy-in and cultivates commitment from the government. AFIDEP and Futures Group, with support from United Nations Population Fund (UNFPA), worked with Uganda’s National Planning Authority (NPA) to assess the country’s potential to harness the demographic dividend if it can initiate rapid fertility decline and invest adequately in its large youthful population to spur economic growth.

Uganda has the highest proportion of young people in the world constituting 53 per cent of the nation’s population. Following the successful study, endorsed by President Yoweri Museveni, the Ugandan government has embarked on a roadmap to identify and invest in key sectors to ensure the country will earn a sizeable demographic dividend.

The high profile study in Uganda led to a four-year partnership between AFIDEP and the UNFPA East and Southern Africa Regional Office (ESARO). Under this agreement, AFIDEP is providing technical assistance to governments in ESARO (comprising 23 countries) on the demographic dividend. Two country studies that commenced in 2014 in Zambia and Mozambique respectively, have been concluded under this agreement. In 2015, further studies are to be conducted in Malawi, Botswana, Rwanda, Namibia and Zimbabwe.

AFIDEP is also a key partner in the ongoing Kenya Demographic Dividend Programme that is implemented by the National Council for Population and Development (NCPD).

AFIDEP also partnered with the University of Dar es Salaam to conduct a country study in Tanzania in 2014. Country case studies highlights, Zambia and Mozambique Zambia and Mozambique are the latest countries in which AFIDEP completed comprehensive demographic dividend studies. The process began in November 2014 and was led by the Ministry of Finance in Zambia and the Ministry of Economics and Finance in Mozambique.

Both countries have shown remarkable economic promise over the last decade averaging more than 6 percent annual GDP growth attributed to extractive industries (mainly copper in Zambia and coal and natural gas in Mozambique) and infrastructure development.

However, the economic growth has not been inclusive and it is estimated that more than half the population in both countries live below the poverty line. The extractive industries driving economic growth have a poor job creation effect compared to the agriculture industry that supports the majority of citizens in the two countries, and yet is poorly developed. Further, most working-age people in both countries are either underemployed or unemployed.

Zambia and Mozambique have also experienced rapid population growth over the last few decades and this is characterised by the persistently high fertility rates. Recent studies show that the fertility rate in Zambia stands at 5.6 children per woman and Mozambique at 5.9 children per woman. This has resulted in both countries having a large youthful population. This can be both an opportunity to harnessing the demographic dividend and a limitation for socioeconomic development.

If these countries can initiate rapid fertility decline, invest adequately in human capital development, create enough decent jobs and improve governance, they can harness the full potential of the youth bulge to accelerate economic development. If not, then the resultant large young but dependent population will hold back socioeconomic development as both government and family resources will be stretched in a bid to provide basic needs and services.

To assess the potential of both states to harness the demographic dividend, AFIDEP used the DemDiv modelling tool developed by the USAID-funded Health Policy Project and implemented by the Futures Group. The modelling is based on four policy scenarios:

Business-as-usual Scenario (little reform with lacklustre performance prevails), Economic Emphasis Scenario (maximum investments only in economic sector but other sectors excluded), Moderate Scenario (Economic Emphasis with moderate investments in family planning and education), and the Combined Scenario (optimum investments in all five pillars of the demographic dividend).

The results show that if Zambia and Mozambique can adequately invest simultaneously in all five sectors (family planning, health, education and skills development, economic reforms and job creation, and governance) under the Combined Scenario, they can reap sizeable economic benefits over the next 40 years.

For instance, in Zambia, GDP per capita would rise from the 2013 estimate of US$ 1,839 to US$ 26,940 over this period. In Mozambique, it would rise from the 2011 estimate of US$ 557 to US$ 8,443.

On the other hand, the projections also reveal that due to the current large young population yet to start child bearing, the populations of both countries will continue to grow rapidly even under the most optimistic Combined scenario.

Under this scenario, Zambia’s population could more than double from 15 million in 2013 to 36 million in 2053, while Mozambique’s population would almost triple from 23 million to 61 million between 2011 and 2051. This will give rise to an enormous challenge of job creation with the modelling study showing that both countries will have a large jobs deficit to deal with even when optimum investments are made in all the five sectors.

Among the key policy action recommendations arising from these studies therefore are: increased investments in family planning, child survival and women’s education to lead to rapid fertility decline; strategies to ensure that young people attain at least secondary education and most receive relevant skills oriented tertiary education; emphasis on diversification of the economies and job creation strategies; and improvement in governance and accountability to facilitate the enabling environment for accelerated socio-economic development.

Advocacy in global arena

AFIDEP has been at the heart of global discourse on demographic dividend and has engaged in high level advocacy on the subject. Recent highlights include a high-level meeting in Addis Ababa, Ethiopia on March 29, where Dr Eliya Zulu, the Executive Director, was among keynote speakers who addressed ministers and development partners on how Africa can harness demographic dividend for Agenda 2063 (Read: Africa focuses on harnessing demographic dividend by 2063 www.afidep.org)

Dr Zulu also addressed the United Nations in New York on May 28 on ‘National economic prospects based on
time-critical investments in young people’ (watch http://webtv.un.org/watch/unfpabriefing-on-youth-and-the-demographicdividend/4202095610001?page=3#full-text).

On June 1, 2015, Dr Zulu also addressed the UN General Assembly on ‘The Demographic Dividend and Youth
Employment’ (Read: AFIDEP Executive Director to address UN General Assembly on the demographic dividend and youth employment www.afidep.org).

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