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Demographic allure?

21st October 2011

By: Terence Creamer
Creamer Media Editor


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In a recent report, Standard Bank noted that Africa may well be poised to begin reaping the benefits of a ‘demographic dividend’ in the coming decades as its young and increasingly affluent citizenry expands to number about two-billion by 2050 – the equivalent of one-fifth of the world's population by that time.

In fact, African political economy unit senior analyst Simon Freemantle identified the anticipated surge in Africa’s population as one of five key trends that could improve the continent’s “allure” over the medium term. The other four themes highlighted in a series of research papers included rising and rapid urbanisation, the adoption and absorption of new technologies, the continued unlocking of abundant mineral and agricultural resources and the deepening of the continent’s financial sector.


The analysis offered some welcome relief from the prevailing gloom surrounding youth unemployment, arguing that, coupled with robust economic growth, population growth could play a particularly “potent” role in supporting the emergence of the continent‘s consumer base.

The demographic dividend theory is currently finding practical expression in a country such as China, where the convergence of falling fertility rates and improved healthcare is lowering dependency ratios. As a result, China's working-age population reportedly nearly doubled from 407-million in 1978 to 786-million in 2004, which adding about two percentage points a year to gross domestic product growth.


However, that benefit is expected to start waning over the coming decade and researchers are, thus, turning their attention to other territories, including Africa, where, on paper at least, the demographic statistics appear compelling.

Indeed, since 2000, the continent’s population has expanded by 200-million and currently exceeds 1-billion. In addition, the median age of 19.7 in Africa compares favourably with the median age of 32 for citizens living in the ‘Brics countries’ of Brazil, Russia, India and China.

Standard Bank calculates that this “youthful bulge” may expand the continent’s workforce to 1.2-billion by 2050. If that is the case, one in four global workers will be African by that date, compared with one in eight from China.

In such a context, Africa‘s services and manufacturing sectors may be stimulated, “fundamentally altering” the prospects of select economies on the continent.

However, Freemantle and other caution that such a dividend is far from a certainty and will flow only if a number of preconditions are met. “Institutions must be strong, or at least improving, and education levels and healthcare elevated. Political and economic freedoms must also be supportive,” he asserts.

A failure of the political authorities to set in place conditions to ensure that young people find gainful, formal employment could be a recipe of greater instability and even political uprisings, which will undermine Africa’s growth and development prospects.

“Seen from within the sphere of economic theory, a rising, and youthful population, when balanced by generally positive economic growth, carries potentially potent benefits for those countries with the structural means to support a bulging populace. Yet, equally, in the absence of such supporting factors, population growth has the ability to be profoundly destabilising,” Freemantle concludes.



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