DemographyandecongrowthinNigeria-5dec09website.final .Psn

7/28/2019 DemographyandecongrowthinNigeria-5dec09website.final .Psn

1/43

Prospects for

Economic Growth in Nigeria:A Demographic Perspective

Nigeria: The Next Generation

First Meeting of the Task Force

Abuja, Nigeria

December 4-5, 2009


2/43

Structure of the presentation

Salient facts describing Nigerias economy

and population

The demographic dividend: theory andevidence

Is there a demographic dividend in

Nigerias future?


3/43

Salient facts describing

Nigerias economy and population


4/43

Nigerias economy has stagnated:No growth in income per capita

Source: World Development Indicators, 2008

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1980 1990 2000 2006

GDPperc

apita

PPP, constant 2005 intl $ Exchange-rate, constant 2000 US $


5/43

Indonesia and Pakistan have seen

economic growth


0

500

1,000

1,500

2,000

2,500

3,000

3,500

1980 1990 2000 2006

GDPpercapita,PPP(constant2005int'l$)

Nigeria

Indonesia

Pakistan


6/43

Nigerias economy

compared with world regions


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1980 1990 2000 2006

GDPpercapita,PPP(consta

nt2005int'l$)

Nigeria

East Asia & Pacific

Sub-Saharan Africa

World


7/43

Comparing economic growth rates


Nigeria 0.0%Indonesia 3.6%

Pakistan 2.5%

East Asia & Pacific 6.6%Sub-Saharan Africa 0.0%

World 1.6%

average annual growth

rate of GDP/capita

(PPP), 1980 - 2006


8/43

Nigerias population has grown rapidly

Source: UN, World Population Prospects, 2008

0

50

100

150

200

250

300

1960 1970 1980 1990 2000 2010

Population

(millions)


9/43

Nigerias fertility rate has started to fall


2

3

4

5

6

7

1960 1970 1980 1990 2000 2010

Childrenperw

oman


10/43

The infant mortality rate has fallen,

but not steadily


0

50

100

150

200

1960 1970 1980 1990 2000 2010

De

athsper1,000livebirths


11/43

Life expectancy has risen,

but not steadily


35

40

45

50

55

60

65

1960 1970 1980 1990 2000 2010

Lifeexpectancyatbirth,years


12/43

Crude birth and death rates are falling


0

10

20

30

40

50

1960 1970 1980 1990 2000 2010

Per1,000pop

ulation

Crude birth rate Crude death rate


13/43

Population growth has been rapid


1.0

1.5

2.0

2.5

3.0

3.5

1960 1970 1980 1990 2000 2010

Populationgrowthrate(%)


14/43

The ratio of working-age to non-working-

age people has been pretty steady


1.0

1.5

2.0

2.5

1960 1970 1980 1990 2000 2010

Ra

tioofworking-a

geto

non-w

orking-agepop

ulation


15/43

Changing age structure, 1950-2010:A 3-dimensional view

Source: UN, World Population Prospects 2008

0

510

15

20

25

30

P

opulation

(

millions)

0-4

10

-14

20

-24

30

-34

40

-44

50

-54

60

-64

70

-74

80

-84

90

-94

100+

1950

1960

1970

1980

1990

2000

2010

Age group


16/43

Education level varies by population group

Educational attainment remains quite low: 37% of the population has no formal schooling

47% is illiterate

Over 50% of Muslims and traditionalists haveno formal schooling.

50% of Christians have secondary or highereducation.

Rural residents and those in the North havelower educational attainment.


17/43

Employment

Unemployment is well above 20%, except forthose over age 35.

Unemployment doesnt vary much by

rural/urban residence. It is highest among those with a secondary

education (48%). This group seems likely to be underemployed.

Womens labor force participation lags farbehind mens.


18/43

Marriage, first birth, and contraception

Age at first marriage and first birth are higher in the South

in urban areas

among those with higher levels of education, and among Christians

Those who only use traditional or folkloriccontraceptive methods have much higher

fertility. There is significant unmet need for

contraception.


19/43

Fertility varies by population group

Fertility rates are higher:

in the North

in rural areas among those with less education

among the poor, and

among Muslims and traditionalists


20/43

What weve seen so far

Economics: Low level of income

High inequality

Little or no economic growth

Demographics:

Rapid population growth High fertility

Large population of young people


21/43

The demographic dividend:

Theory and evidence


22/43

Average annual growth rate of

GDP per capita, 1975-2005

Source: World Bank,

World Development Indicators 2008

-1%

0%

1%

2%

3%

4%

5%

6%

7%

East Asia & Pacific Sub-Saharan Africa

East Asian "miracle"

Sub-Saharan African

debacle


23/43

Changing age structure, 1960-2005

Source: UN, World Population Prospects

1.00

1.25

1.50

1.75

2.00

2.25

2.50

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Ratioofworking-ageto

non-working-agepopulation

East Asia & Pacific Sub-Saharan Africa


24/43

Populationgrowth rate

timeDeath rate

Birth rate

The Demographic Transition


25/43

Population age structure is a robust and

powerful predictor of economic growth

Demographic

s

One third (about 2 percentage points) of the growth of

income per capita in East Asia during 1965-90 is attributable

to the independent influence of changes in age structure.

Income


26/43

Reaping the demographic dividend is not

automatic, and may not be permanent

Demography is not destiny it just createspotential

for economic growth and poverty reduction and also, for social, political, and economic instability

March of the Silver-Haired Generation


27/43

Complementary policies

Need to catalyze demographic transition

Need to accelerate demographic transitionesp. fertility decline

Need compatible policies in other areas education health

labor market

trade

governance macroeconomic management

Need good relationships with other countries


28/43

Is there a demographic dividend in

Nigerias future?


29/43

Nigerias population is set to soar


0

50

100

150

200

250

300

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Population

(millions)


30/43

The fertility rate is expected to continue falling


2

3

4

5

6

7

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Childrenperwoman


31/43

The infant mortality rate is projected to

continue falling


0

50

100

150

200

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

De

athsper1,000l

ivebirths


32/43

Life expectancy will continue to rise


35

40

45

50

55

60

65

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Life

expectancy

atb

irth,years


33/43

Crude birth and death rates will continue to fall


0

10

20

30

40

50

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Per1,000population

Crude birth rate Crude death rate


34/43

Population growth rate will decline substantially


1.0

1.5

2.0

2.5

3.0

3.5

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Populationgrowt

hrate(%)


35/43

The ratio of working-age to non-working-age

people is set to increase dramatically


1.0

1.5

2.0

2.5

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Ratioofworking-a

geto

non-working-agepopulation


36/43

Growth of the working-age to non-working-age

ratio, 1960-2050 (under 3 UN fertility scenarios)


1.0

1.5

2.0

2.5

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Ratioofworking

-ageto

no

n-working-agep

opulation

Low Medium High


37/43

The bottom line:

demographic change can lead to

economic growth

0

500

1,000

1,500

2,000

2,500

3,000

1980 1990 2000 2010 2020 2030 2040 2050

GDPpercapita(PPP)

Past performance With demographic dividend With no dividend


38/43

Comparing the growth rates of the

working-age and non-working-age

population


Dependent Working-age Dependent Working-agepopulation population population population

Nigeria 2.6% 2.7% 0.7% 2.0%Indonesia 0.9% 2.3% 0.8% 0.4%Pakistan 2.5% 3.0% 1.0% 1.8%

East Asia 0.5% 1.9% 0.9% -0.1%Sub-Saharan Africa 2.6% 2.8% 1.1% 2.3%World 1.1% 1.9% 0.8% 0.7%

1970 - 2010 2010 - 2050

Annual average growth rate


39/43

Changing age structure, 1960-2050:Nigeria compared with Indonesia and Pakistan


1.0

1.5

2.0

2.5

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Ratioofworking-ageto

n

on-working-age

population

Nigeria Indonesia Pakistan


40/43

Changing age structure, 1960-2050:Nigeria compared with East Asia


1.0

1.5

2.0

2.5

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Ratioofworkin

g-ageto

n

on-working-age

population

East Asia Nigeria low Nigeria medium Nigeria high


41/43

The size of the 60+ population

will increase dramatically


0

10

20

30

40

50

60

1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Populatio

n

(millions

)

15-24 60+


42/43

Reaping the demographic dividend:

cautionary points regarding Nigeria Not all of the general points about the factors

needed to realize the demographic dividendnecessarily apply to Nigeria.

In particular: Trade policy is important, but it may be more

important to focus on diversification of the economyaway from dependence on oil exports.

Minimum wage laws and unions may affect only a

small portion of Nigerias labor market.


43/43

Take-home messages

Demography matters.

Demography matters a lot.

There is potentially a sizeable demographicdividend in Nigerias future.

But, will Nigeria collect this dividend?

Documents

DemographyandecongrowthinNigeria-5dec09website.final .Psn