Thursday, 19 January 2012

Time for Africa's demographc dividend?

Africa's young population holds the promise of a brighter future, if the necessary investment in their education and empowerment is made today.
 In a world of seven billion people, Africa stands out as a strapping teenager brimming over with youthful energy and optimism and yet also prone to impetuosity, frustration and disillusionment in the absence of a sufficiently supportive environment. With a median age of just under 20, the continent's growing young population holds a 'compelling and conflicting array of opportunities and challenges' for its 54 nations.

The question confronting many African governments is: what must be done to harness and unleash the potential and creativity of the biggest youth cohort the continent has ever seen? And with fertility rates falling steadily and health improving in many countries amidst a burgeoning working age population, is it now time for Africa to cash in on its demographic dividend?

At the end of October, the UN published its State of World Population, which revealed that global population had surged by a billion to seven billion in little more than 12 years. Africa's own share of this increase is no less staggering- since 2000 the continent's population expanded by 200 million to reach just over one billion in 2011. Future projections for the next decade envisage an average growth of 2.2 per cent to reach two billion- or one-fifth of the global total. This rapid growth also suggests that Africa's population is remarkably young. For instance, out of every 100 Nigerians, 55 are under 20 years old.

UN secretary-general Ban Ki-moon greeted the world's seven billionth baby with a sombre warning about the state of the world today, from failing economies and growing inequalities and stretched natural resources on a climatically fatigued planet, to the clear and present risks of crisis and collapse as a result of exhausted trust in leaders and institutions to deliver a better life.

Referring to the widespread popular protests and uprisings against bankerinduced economic recession in the west and democratic deficits in the Arab world and Africa that dominated 2011, Ban said, 'The gathering force of public protests is the popular expression of an obvious fact: that growing economic uncertainty, market volatility and mounting inequality have reached a point of crisis.'

He added, 'Too many people are living in fear. They are discouraged by uncertainty and angry at their diminished prospects. Around kitchen tables and in public squares, they are asking: who will deliver for my family and my community? In these difficult times, the biggest challenge facing governments is not a deficit of resources; it is a deficit of trust. People are losing faith in leaders and public institutions to do the right thing.'

What, then, are Africa's prospects in such a prevailing economic and political state across the world, given its massive, young and restless population? It is of some significant reassurance that the UN Economic Commission for Africa (Uneca) and the AU in their joint economic report on Africa for 2011 observed that 'African economies have recovered from the global financial and economic crisis better than expected'. Their aggregate GDP growth is forecast to rise to 5 per cent in 2011, up from 4.7 per cent in 2010, the report says, adding that the exports of African economies suffered in 2009, with a decline of 32.4 per cent, but the rebound of commodity prices and strong demand from developing and emerging economies propelled a sharp upswing in their exports in 2010.


Ban Ki moon: 'People are losing faith in leaders and public institutions to do the right thing'.
Simon Freemantle, a research analyst with South Africa's Standard Bank who has embarked on a series of reports unpacking what he sees as the five main trends driving Africa's ongoing economic and commercial reinvigoration, has identified the continent's 'larger, younger, and more affluent population' as a primary driver of its enduring economic allure. Freeman de argues that first, 'when coupled with robust economic growth, population growth will support the emergence of the continent's consumer base, providing support to local firms, creating economic opportunities, and inspiring foreign investment'.

Secondly, he argues that for countries that are able to provide the necessary institutional support, a youthful, and rising, population has the potential to yield economic benefits. He explained that locked within the convergence of a rising population, declining fertility and improving healthcare systems is the potential for a demographic dividend, where countries witness a mechanical appreciation in the size, and vigour of the working age population. With low dependency ratios, the working classwhich also includes more women due to falling fertility rates - is able to save and invest a greater amount of its income thereby increasing prosperity.

'Thus, shifts in a country's age structure can, and have in virtually all large economies in the world, produce profound economic gains, fundamentally supporting the development of an industrial and man ufacturing base, and vastly altering economic performance,' Freemantle said.

The concept of the 'demographic dividend' is an interesting one for researchers and policymakers alike. Lori S Ashford of the Population Reference Bureau points out that East Asia's 'economic miracle' provides the best evidence of the potential impact of the demographic dividend.

As early as the 1950s, she said, East Asian countries developed strong public health systems that ensured child survival, promoted smaller families, and made contraception acceptable and easy to obtain. While in the 1950s the typical East Asian woman had six children, by the mid-1990s she had only two. 'A strong educational system and sound economic management made it possible to absorb the large generation of young adults into the workforce. From 1965 to 1990, growth in [GDP] per capita averaged more than 6 per cent per year[ ... ] Researchers have estimated that the demographic dividend accounted for onefourth to two-fifths of this growth,' Ashford wrote in a paper examining prospects for Africa's demographic dividend.

In Freeman tie's view, the coupling of economic and population growth to facilitate the emergence of Africa's consumer base is already evident. 'Within the next five years Africa's spending power will increase by 25 per cent. And, private consumption in Africa's 10 largest economies will more than double to $1.8 trillion by 2020- the same level as China's private final consumption in 2009,' he says. This consumer growth is being supported by a rising middle class, which is estimated to have grown to 150 million Africans since 1990, with a further 40 million households projected to become middle class by 2015.

Nigeria and Egypt alone are expected to add 20 million new households to Africa's middle class in the next decade, whilst disposable income in Africa's five biggest economies- South Africa, Nigeria, Egypt, Algeria and Morocco - will grow at an average rate of 8 per cent, reaching a collective $650bn by 2020.

Although there's no agreement on the precise income levels requisite for middle class classification, it is clear that the nascent development of a segment of the population increasingly freed of the poverty trap- measured as those living on less than $1.25 per day- is gaining momentum.
Africa's middle class is set to fuel economic growth as it expands
Four decades from now, Africa's working age population will swell to 1.2 billion, which translates to a quarter of the world's workers. But according to Ashford, reaping the demographic dividend will not necessarily occur as a matter of course. It will likely depend on several factors, such as strong public health systems that improve child survival and health in general; widespread availability and social acceptability of family planning; rapid and steady declines in childbearing; improvements in educational enrolments and quality; and stable economic conditions conducive to growth and job creation.

There are wide disparities in fertility rates across the continent and for many countries their significant gains in economic growth are likely to be weighed down by a dramatic explosion in population size. On average, a woman in sub-Saharan Africa will give birth to about 5.2 children in her lifetime, with at least nine countries having an average of six children per woman, in comparison to 1.7 in western countries. It would be far easier for many of these countries to develop and progress with low rates of population growth.

One such country facing massive population growth in future is Uganda. John Baliruno, from Mpigi in the country's central region, has fathered nine children but says he had never intended to have so many. '[My wife and I] had no knowledge of family planning and ended up producing one child after another. Now I cannot properly feed them,' he lamented. On account of lack of access to family planning knowledge and gender inequalities among other factors, Uganda's population of 34.5 million is expected to treble by 2050.

However, there are more encouraging stories from other countries on the continent. Assefa Hailemariam, the former director of the Population Studies and Research Centre at Addis Ababa University's Institute of Development Studies, said that young urbanites are bringing fertility rates down very fast for economic reasons.

'Urban life is demanding,' Hailemariam said. 'You can't count on relatives to look after your kids. You can't have too manybringing them up, taking care of them. Also urban people have access to communications [media] so they are aware that having a smaller number of kids is better for their future you can educate your children, buy them clothing and so on.'

Ethiopia's national fertility rate has been 3.8 for the period of 2010-2015 whilst in Addis Ababa, the capital, Hailemariam said, the rate has fallen below 1.5. 'In 2000 it was 1.9 or so; now we expect that it would be much lower. This is not necessarily just because of contraceptive use, although contraceptive use has played a role, but because of a number of development issues- a higher age of marriage in Addis, education, health improvement, [and] contraceptive access,' he said.

Freemantle observed that 'enhanced peace and prosperity across the continent are colluding, with a range of similarly supporting factors, to reduce fertility rates - in some instance dramatically'. He identifies Mauritius as one country where dramatic reduction in its fertility rate against improved health is holding out the promise of economic returns.

The drop from a fertility rate of 6.2 to 2.3 took just 20 years, from 1960 to 1980. The UN's population report corroborates this case, noting that some rapidly developing lower-income countries are following the trend in middle income countries whose fertility rates are falling significantly. It adds that the number of years in which a large, young working population can be counted on to fuel development may be fleeting, and governments and the private sector need to act now to prepare the young for productive roles and create jobs for them early in their working lives.

In sub-Saharan Africa, where economic growth rates remain relatively high as noted in the joint Uneca/ AU report, this performance is not being translated into needed jobs. The report urges more effective government intervention through the adoption of the 'developmental state' model to create employment-building policies and programmes. 'The improved economic performance achieved over the last decade has not been translated into commensurate reductions in unemployment and poverty, nor significant progress towards the Millennium Development Goals (MDGs), and the continent is experiencing a jobless recovery, apparently perpetuating a fundamental feature of its previous growth spell,' the report says.

Where employment has been created, this has been limited in many countries and economic recovery has been driven by capital-intensive extractive sectors that have few forward and backward linkages with the rest of the economy.

Only a few countries, such as Egypt and Mauritius, made marginal reductions in unemployment in 2010, due to their relatively strong expansion of the labour-intensive services sector. Woefully, public expenditure on social spending falls below the level needed to achieve the MDGs.

The International Labour Organisation (ILO) has warned that youth unemployment and situations where young people simply give up looking for work 'incur costs to the economy, to society and to the individual and their family', adding that 'there is a demonstrated link between youth unemployment and social exclusion'. In 2011, amid revolutions on the streets of Arab countries, the ILO also suggested that a 23.4 per cent youth unemployment rate in the Arab world was a major contributor to the uprisings.

In South Africa, one of the most economically unequal societies on the planet, unemployment stands at 25 per cent, rising to 57 per cent among township youth. The increasingly militant ANC Youth League and its suspended leader Julius Malema seized the country's political centre stage fronting the anger, disillusionment and growing militancy of South Africa's youth who feel betrayed by 17 years of majority rule.

In neighbouring Mozambique, Rui Pedro, a 24-year old geography student at the University Eduardo Mondlane in Maputo, is equally despondent. 'It's hard to be a young person in Mozambique,' he said. 'Normally in youth, you're supposed to gain experience for the future ... But here you have more problems than opportunities. There's no way to overcome the obstacles.'

So, can Africa reap the demographic dividend? Experts concur that there are a number of preconditions that must be fulfilled before countries can reap the advantages of youthful and growing populations, the main one of which is institutional quality. This refers to maintaining the rule of law, efficient bureaucracies, government stability, lack of corruption, and a stable business environment that encourages domestic and foreign investors.

Political and economic freedoms must also be supportive. 'Overall, North African countries, particularly Egypt and Morocco, rank favourably on most metrics, with countries such as Ghana, Mauritius, Senegal and South Africa also displaying structural potential,' says Freemantle.

Uneca's Africa youth report for 2011 calls for more investment in education and skills development for young people beyond merely increasing basic literacy rates to ensure dynamic, multifaceted knowledgebuilding at higher and tertiary levels. This will go a long way in preparing young people for the evolving labour market, the report says. Depressingly, despite increase in school enrolment, access to post-primary schooling is still a challenge for most young people in Africa.

Uneca says a change of attitude towards young people and by young people in Africa is essential. Many initiatives have been put in place, but much remains to be done. 'Clearly, as with the lessons learned from gender and development, stereotypes and the attitudes of both young people and the general population slow progress towards youth development in Africa,' it says in the report.

Secondly, Uneca says that in an era of the promotion of regional integration and rapid globalisation, African governments should take proactive measures that harness the potential and competitiveness of their young people in the global economy. 'These measures [ ... ] include: enhancing infrastructure; training and retraining to address skill shortages in the region; reforming immigration policies; promoting policies of inclusion and the right to education and work; and strengthening social protection systems, which would increase demand, protect people and support change in society'.

UNFPA's report, The Case for Investing in Young People as Part of a National Poverty Reduction Strategy 2010, advocates for investment in the youth. 'Adolescence is an important time to acquire the skills, health, social networks and other attributes that form the social capital needed for a fulfilling life. The fact that the human capital formed during adolescence and in youth is also an important determinant of long-term growth makes a strong macro-economic argument to support investing more in young people,' the report noted.

Social investment in young people's education, health and employment can enable countries to build a strong economic base, thereby reversing intergenerational poverty, said the report, adding that enhancing young people's capacities can yield larger returns during the course of their economically active lives. 'Young people are also an enormous resource for growth in the short run. Having young people sit idle is costly in foregone output ... The loss of income among the younger generation translates into a lack of savings as well as a loss of aggregate demand.'

To combat rising population against low economic growth, the need for reproductive health services, especially family planning, remains great. The attainment of a stable population is necessary for accelerated, planned economic growth and development.

And governments that are serious about ending poverty should also be serious about availing the services, supplies, information that women need to exercise their reproductive rights.

In countries like Ethiopia, where many girls are married off before they reach 18, child marriages are declining. 'Child marriage undermines nearly every Millennium Development Goal; it is an obstacle to eradicating poverty, achieving universal primary education, promoting gender equality, improving maternal and child health and reducing HIV and Aids,' the Population Reference Bureau survey says. Child marriages are a violation of the Convention on the Elimination of All Forms of Discrimination Against Women and the Convention on the Rights of the Child, and many countries in Africa have signed up to these international instruments.

Across the continent, many African youth are refusing to sit idly and risk their future being frittered away by unresponsive politicians. In Nigeria, where the median age is 18.5, young people have been taking an increasing part in political life in order to make their voices heard and their presence visible, including through the country's Youth Parliament.

The youth-registration and voting drive mounted by Fauziya Abdullahi and her colleagues for elections in 2011 is continuing as a civic awareness campaign, and Abdullahi said the elections showed 'a need for intensive civic education and capacity building that empowers young people to be at the driver's seat of their destiny.'

On the peripheries of the Egyptian city of Ismailia, on the Suez Canal, a teenage boy reflected the excitement of his generation and its hope of building political influence after the uprising in his country: 'We have made this revolution. Our families were used to keeping quiet. We didn't keep quiet. We went out to get our dream.'

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