population and development in ghana population and development in ghana the challenge of harnessing...
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Population and Development in Ghana
The challenge of harnessing the demographic dividend
byJean-Pierre Guengant, Ph.D.
Director of Research IRD
Accra–September 23-27, 2013
-1,8 -1,6 -1,4 -1,2 -1,0 -0,8 -0,6 -0,4 -0,2 0,0 0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6 1,8
Men Potentially
Active
Women Potentially
Active
< 20 years
-2,5 -2,0 -1,5 -1,0 -0,5 0,0 0 0,5 1 1,5 2 2,5
Men Potentially
Active
Women Potentially
Active
< 20 years
Demographic dividend has to do with demographic transition
and changing age structureYoung country Old country
During demographic transition, the age structure changes and the dependency ratio decreases
The entry of many youth in the workforce can increase output & savings per capita & foster sustainable growth
These are the benefits of the 1st demographic dividend
Later on, as the working-age population matures, the prospects of retirement can provide greater motivation to save for financial security.
These additional savings can either be consumed or used to prolong economic growth
This later stage of economic growth has been termed the second demographic dividend
There are two demographic dividends
Harnessing the demographic dividend requires creating a window of opportunity (which lasts 40-
50 years) through rapid fertility decline and capitalizing on the dividend economically
This implies 1. Accelerating fertility transition2. Improving human capital (Health & Education) 3. Saving & investing in value added activities4. Having a legal, institutional and political reliable
environment (good governance) 5. Creating many jobs with high productivity
But benefitting from the demographic dividend is not automatic
4 phases in the demographic and fertility transition
TFR: 6-8 childrenL-E: 25-30 years
TFR: 1.5/2.5 childrenL-E: 80+ yearsNatural Increase per year
0.5 / + 0.5 +1% + 3% - 0.5 / + 0.5
Where is Ghana? Not far (phase 2) with a natural increase of still 2.2% p/yr
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
0
5
10
15
20
25
30
35
40
45
50
Crude birth rate
Crude death rate
Rate of natural increase
Population growth rate
Ra
tes
(p
er
1,0
00
po
pu
lati
on
2.2%
3.0%
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2.0
3.0
4.0
5.0
6.0
7.0
25
30
35
40
45
50
55
60
65
70
TFR: UN estimates 2013 DHS 1988,1993,1998, 2003, 2008
Census 2010, MICS 2011 E0: UN estimates 2013
To
tal
fert
ilit
y (
ch
ild
ren
pe
r w
om
an
)
Lif
e e
xp
ec
tan
cy
at
bir
th
A result of still high fertility and decreasing in mortality
2010 Census
MICS 2011
-1,8 -1,6 -1,4 -1,2 -1,0 -0,8 -0,6 -0,4 -0,2 0,0
10-14
20-24
70-74
50-54
60-64
40-44
30-34
0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6 1,8
0-4
80 +
Men Potentially
Active
Women Potentially
Active
Population by five-year age group (million)
Ghana : 6.6 million Ghana 2010: 24 million
Result: a rapidly growing population and many dependants (114 per 100 20-64Yrs & 50%<20yrs
< 20 years
65 years +
-2,5 -2,0 -1,5 -1,0 -0,5 0,0
10-14
20-24
70-74
50-54
60-64
40-44
30-34
0 0,5 1 1,5 2 2,5
0-4
80 +
In 1960 Korea had also a young population (50% <20 yrs) & high dependency ratio (118/100)
Korea 1960: 25 million
10-14
20-24
70-74
50-54
60-64
40-44
30-34
Women Potentially
Active
< 20 years
Men Potentially
Active
65 years +
Population by five-year age group (million)
-2,5 -2,0 -1,5 -1,0 -0,5 0,0
10-14
20-24
70-74
50-54
60-64
40-44
30-34
0 0,5 1 1,5 2 2,5
0-4
80 +
Korea 2010: 48 million (2 times more people)
But by 2010, Korea has only 23% youthand a favorable dependency ratio (50/100)
10-14
20-24
50-54
60-64
40-44
30-34
< 20 years
Men Potentially
Active
Women Potentially
Active
65 years +
Population by five-year age group (million)
GDP per capita increased 15 folds against 1,5 in Ghana
1960
1964
1968
1972
1976
1980
1984
1988
1992
1996
2000
2004
2008
2012
0
500
1000
1500
2000
2500
3000
3500
GDP (cst 2005 US) Korea
GDP per capita (cst 2005 US) Korea
GDP (cst 2005 US) Ghana
19
60
=1
00
Since 1960 Korea had a sustained economic growth and a large GDP per/capita increase
1961-1969
1970-1979
1980-1989
1990-1999
2000-2012-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Ghana Korea
GD
P g
row
th (
an
nu
al
%)
1961-1969
1970-1979
1980-1989
1990-1999
2000-2012-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0Ghana Korea
GD
P p
er
ca
pit
a g
row
th (
an
nu
al
%)
GDP per capita growth %GDP total growth
Result of “the Generational Economy”: the economic flows across generations
0 10 20 30 40 50 60 70 80AGE
Consumption
Labourincome
Transferts to the State
Parents spending to private institutions.Public health and education service
Care, transfers from children Pensions, benefit from personal savings & assets
Revenues from natural resources and exports
IDA,FDI Remittances
Population growth between >1%-<3% per year, declining except in Africa
Western Europe
E. Europe & f. USSR
Western offshoots
Japan Asia (exclud-
ing Japan)
Latin America
Africa 0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1820-1870 1870-1913 1913-1950 1950-1973 1973-2001
Po
pu
lati
on
gro
wth
(a
nn
ua
l (%
)
Industrialized Regions Developing Regions
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
0
200
400
600
800
1,000
1,200
1,400
East Asia & Pacific
European Union
Latin America & Car-ibbean
North America
South Asia
Sub-Saha-ran Africa
19
60
=1
00
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
0
100
200
300
400
500
600
700
East Asia & Pacific
European Union
Latin America & Caribbean
North America
South Asia
Sub-Sa-haran Africa
19
60
=1
00
In 2012, SS-Africa GDP per capita was only 54% higher than in 1960
GDP total (base 100=1960)
GDP per capita (base 100=1960)
1980-1994 1995-2004 2005-2012-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0East Asia & Pacific European UnionLatin America & Caribbean North AmericaSouth Asia Sub-Saharan Africa
But since the mid 1990s SS-Africa GDP growth resumed
1980-1994 1995-2004 2005-2012-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0East Asia & Pacific European Union
Latin America & Caribbean North America
South Asia Sub-Saharan Africa
4,0
-1,2
1,2
3,0
5,7
2,21,7
0,50,7
2,2
1,7
2,2
3,6
2,3
3,2
2,4
1,10,4
However recent Africa GDP per capita growth is 2.2% per year
Can Ghana harness the demographic dividend ?
1. Accelerating fertility transition2. Improving human capital3. Saving & investing4. Good governance5. Creating jobs
Future population of Ghana? Between 26 million (2013) to ? 40 - 60 million by 2050
2010
2016
2022
2028
2034
2040
2046
2052
2058
2064
2070
2076
0
20
40
60
80
100
120
140
Low fertility 2.0 by 2050 1.5 by 2080
Medium fer-tility 2.5 by 2050 2.0 by 2080
High fertility 3.0 by 2050 2.5 by 2080
Constant fertility 4.1 by 2050 & 2080
Mil
lio
n
Assumptions
Population growth will remain positive up to the 2070s (but ≠in urban & rural areas)
2010-
2015
2015-
2020
2020-
2025
2025-
2030
2030-
2035
2035-
2040
2040-
2045
2045-
2050
2050-
2055
0
5
10
15
20
25
30
35
40
CBR low 2.0 by 2050
CBR medium 2.5 by 2050
CBR high 3.0 by 2050
CBR constant 4.1 by 2050
CDR low 2.0 by 2050
CDR medium 2.5 by 2050
CDR high 3.0 by 2050
CDR constant 4.1 by 2050
Ra
tes
(p
er
1,0
00
po
pu
lati
on
)
Assumptions
Growth
2,3
1,91,6
1,2
2,2
1,4
1,0
0,5
-3,0 -2,5 -2,0 -1,5 -1,0 -0,5 0,0
10-14
20-24
70-74
60-64
30-34
0 0,5 1 1,5 2 2,5 3
0-4
80 +
Ghana 2010: 24 million
10-14
20-24
70-74
50-54
60-64
40-44
30-34
80 +
Men Potentially
Active
Women Potentially
Active
< 20 years
65 years +
Population by five-year age group (million)
In 2010, the 15-24 = 5mn, entries in the LF 350,000, Dep. ratio 114/100 20-64yrs
-3,0 -2,5 -2,0 -1,5 -1,0 -0,5 0,0
10-14
20-24
70-74
60-64
30-34
0 0,5 1 1,5 2 2,5 3
0-4
80 +
Ghana 2050: 40 millions
10-14
20-24
70-74
50-54
60-64
40-44
30-34
80 +
Men Potentially
Active
Women Potentially
Active
< 20 years
65 years +
Population by five-year age group (million)
By 2050, with a TFR of 2.0 15-24= 6.5mn & entries in the LF 450,000, Dep.ratio 65/100 20-64
-3,0 -2,5 -2,0 -1,5 -1,0 -0,5 0,0
10-14
20-24
70-74
60-64
30-34
0 0,5 1 1,5 2 2,5 3
0-4
80 +
Ghana 2050: 52 millions
10-14
20-24
70-74
50-54
60-64
40-44
30-34
80 +
Men Potentially
Active
Women Potentially
Active
< 20 years
65 years +
Population by five-year age group (million)
But with a TFR of 3.0, 15-24 = 9.2mn, entries in the LF 650,000, Dep. ratio 86/100 20-64
Urban pop. will triple from # 13 mn to 35 mn: Accra from nearly 3 to 7 million and Kumasi from 2 to 6 million -# 40% of urban pop
Engine of growth? Explosive slums? Need to review existing local governance, legal structures
in order to permit cities to deliver selected local services without competing with parallel central gov. structures
Have predictable transfer system to allow them for effective planning (5 yrs? horizon) with performance incentives built into them,
Increase transfers as cities demonstrate their capability to create the dynamic activities of the future
But by 2050, 70% to 75% of Ghanaians will live in urban areas
A window of opportunity may open soon (in the 2020s) in Ghana & close in Korea
0
20
40
60
80
100
120
Dependency ratio 65 yrs+Dependency ratio <20 yrs
1970
1980
1990
2000
2010
2020
2030
2040
0
20
40
60
80
100
120
Dependency ratio 65 yrs+Dependency ratio <20 yrs
KoreaGhana, 2.0 children by 2050
The window of opportunity may open much later if fertility does not decline rapidly
0
20
40
60
80
100
120
Dependency ratio 65 yrs+Dependency ratio <20 yrs
KoreaGhana, 2.0 children by 2050 Ghana, 2.0 children by 2050
0
20
40
60
80
100
120
Dependency ratio 65 yrs+Dependency ratio <20 yrs
Ghana, 3.0 children by 2050
0
10
20
30
40
50
60
70
80 D CongoLinear (D Congo)Linear (D Congo)EthiopiaExponential (Ethiopia)Exponential (Ethiopia)JamaicaKenyaNigeriaPolynomial (Nigeria)Linear (Nigeria)Polynomial (Nigeria)KoreaPolynomial (Korea)ThailandPolynomial (Thailand)Ghana
CP
R m
od
ern
met
ho
ds
%
wo
men
in
un
ion
Ghana missed its contraceptive revolution Can fertility transition be accelerated ?
25.4%
GHANA: Pct pt increase: 1980-2011:+0,65pt/yr - 1999.2011=1,06pt/yr
Fertility, contraceptive use and family planning in Ghana? What to conclude
The slow pace of fertility decline can be attributed to an overall slow/stalling in CPR.
The current/recent levels of TFR (#4) are largely the result of still high (but decreasing Post Partum Insusceptibility ) higher proportions of non-married women, and to a lesser extend the result of contraceptive use and abortion
CPR is low, ideal number of children still high & not changing quickly enough to lead to the fertility decline that would be needed to allow Ghana to be in a position to harness DD in the near future
These are two of the most obvious matters for policy makers and planners to address
Can Ghana harness the demographic dividend ?
1. Accelerating fertility transition2. Improving human capital3. Saving & investing4. Good governance5. Creating jobs
“Health is pricelessbut still has a cost”
Half (53)% of the deaths are caused by communicable diseases, maternal, prenatal and nutrition conditions (2008)
Health expenditure per capita = 75US$ (2011), 60% paid by public sector, this represents 12% of government expenditure and 5 % of the GDP
14% of the expenditure for health come from external resources
Still too many “too early, too close, too often, too late pregnancies”
Not in any risk category
One factor of high-risk
Multiple factors of high-risk
0
10
20
30
40
50
Pe
rce
nta
ge
of
bir
ths
Birth interval < 24
Birth order 4+
First birth
Mother's age <18
Age 35+ & birth order 4+
Half of children are the results of pregnancies with a high level of mortality risk
Not in any risk category
One factor of high-risk
Multiple factors of high-risk
0
5
10
15
20
25
30
35
40
45
50
% m
arr
ied
wo
me
n a
t ri
sk
Age 35+ & birth order 4+
Age 35+, birth interval < 24 and birth order 4+
Mother's age 35+
Birth interval < 24 & birth order 4+
Birth interval < 24
Birth order 4+
First birth
Half married women are exposed to multiple factor high-risk pregnancies
The costs of persisting high level of fertility are very high
High levels of maternal mortality High levels of mortality < 5 years AND High % of stunted children (low height
for age) among the children who survive These children are less resistant and have more difficulties to learn at school. These outcomes affect more the poorest households and jeopardize the chances of the country to achieve a more inclusive growth and fulfill its objectives
Sector Policy Priorities Health Expand/improve
reproductive health & FP outreach to reduce fertility
Meet contraceptive demand
Promote later marriage Invest in child health
NOW Phase 2
of the
Demographic transition
Education also has a cost The performance of the system is not
satisfactory at all levels Education = 24% of government
expenditure and 8% of GDPSchool enrollment: Primary 82% (net)
secondary (59%), Tertiary (12%) , Expenditure per student:
– primary: 180 U$ – secondary: 420 U$ (<2 times ) – tertiary: 2400 U$ (6times and 13 times more)
Improving Ghana’s human capital will require much more resources
Sector Policy priorities Education Expansion of school
enrolment & attainment Improve quality of education ,
ensure match between skills taught and skills in demand
Lower spending in primary (because of fertility decline ) will allow to invert more in higher education
Start to focus on high-value tech driven economic growth
NOW
Phase 2
of the transition
Can Ghana harness the demographic dividend ?
1. Accelerating fertility transition2. Improving human capital3. Saving & investing4. Good governance5. Creating jobs
Few countries maintained high economic growth for more than a generation, and even fewer continue with high growth rates once they reach middle-income statusCountries (mainly East Asia) that avoided the middle-income trap have in common :
1. Openness to the global economy 2. Macroeconomic stability3. A future-oriented mindset with high rates of saving
and investment 4. A reliance on markets and market-based prices to
allocate resources5. Leadership committed to growth and inclusion with
a reasonable capacity for administration
Avoid the middle-income trap GDP per capita (constant 2011 US$)
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
0
5000
10000
15000
20000
25000
Korea
Brazil
Mexico
South Africa
Algeria
Egypt
Source: IMF World Economic Outlook, October 2012
Reduce inequalities: Gini Coefficients for Selected African Countries, 2010
Ethio
pia
Egypt
Mal
i
Sudan
Tanza
nia
Liber
ia
Seneg
al
Mau
ritan
ia
Moro
cco
Cote d
'Ivoire
Ghan
a
Mad
agas
carDRC
Moza
mbiq
ue
Congo
Kenya
Niger
ia
Rwan
da
Swaz
iland
South A
frica
0
10
20
30
40
50
60
70
Gin
i c
oe
ffic
ien
t
Sector Policy Priorities Economy Promoting free trade Promoting household
savings Diversifying trade: goods and
destination Investing in infrastructures Attracting investors Building an inclusive
economy and society
NOW Phase 2
of the demographic transition
Can Ghana harness the demographic dividend ?
1. Accelerating fertility transition2. Improving human capital3. Saving & investing4. Good governance5. Creating jobs
Doing business index and corruption in Ghana
The 2013 Doing Business Report ranks Ghana 64 out to 185 countries
But the “ease of doing business” varies according to the topics, i.e. : registering is not too difficult, but trading across borders and starting a business is a bit more difficult
The Global Corruption Barometer 2013, ranks Ghana 54 out of 95 countries but the score varies according to the topics
% of respondents who think that the following are corrupted or extremely corrupted
NGO'S
Religio
us b
odies
Milit
ary
Med
ical H
ealth
Busine
ss
Med
ia
Parlia
men
t
Public
offi
cials,
civi
l ser
vant
s
Educa
tiona
l sys
tem
Judic
iary
syst
em
Politic
al pa
rties
Police
0%
20%
40%
60%
80%
100%
19% 21%29%
37% 38%47%
57% 59%66% 71% 76%
92%
Better governance to deliver results Individual & property rights to all
citizens Successful entrepreneurs, whether
domestic or foreign, should be able to reap the fruits of their efforts
Physical infrastructures providing transport, communications, electric power, and water needs for a dynamic economy
A business environment that fosters competition and supports innovation
Can Ghana harness the demographic dividend ?
1. Accelerating fertility transition2. Improving human capital3. Saving & investing4. Good governance5. Creating jobs
100%
75%
50%
25%
0%
100%
75%
50%
25%
0%
15 18 20 25 30
15 18 20 25 30
Men Women
In education
Vulnerable employed
Wage employed
Unemployed, discouraged
not in the labor force
The major challenge of the coming years will be promoting youth employment (ADB 2012)
Unemployed, discouraged
not in the labor force
Vulnerable employed
Wage employed
In education
AGE AGE
How many jobs, and what kind of jobs? Need about 350,000 new jobs every year (1,5
million over the next 4 years) just to absorb the youth entering the working age population.
the question is whether these youth will be:– unemployed (but is that an option?) – or employed in low-productivity traditional
agriculture and household enterprises (survival jobs)
– or employed in higher-productivity agriculture, manufacturing, and services jobs that are transformational.
The answer depends on whether workers have the needed skills and private investors have the confidence to invest.
Sector Policy priorities Employment Measures to improve worker
productivity and prospects of better paying jobs in both the formal and informal sectors
Improve the informal sector’s access to inputs, finance, markets, and opportunities to link up with formal sector
vocational training, on-the-job training, apprenticeships to help the youth adapt better to the work environment
NOW Phase 2
of the
Demographic transition
Conclusions: the future is unknown, but it can be explored, and prepared for
1.Global Drivers—Need to be Leverage multipolar global economy, tightening competition for resources, aging societies, technological development and climate change
2.African Drivers-Get good Outcomes Demographics: dividend or social time bomb? Urbanization: agglomeration benefits/ explosive slums Oil and minerals—blessing or curse?
3. Major Risks—Needing Active Management Growing Security or Contagious Conflict? Disparities—Inclusive Growth or Growing Inequality? Middle-income Stage-Road to Prosperity or Trap?
Possible scenarios ?
1. Convergence scenario associated with a vision
2. “Business as usual” (assume recent favorable trends will continue unabated)
3. Downside (Term of Trade deteriorates conflicts etc.)
But overall “GOOD JOBS CREATIONS” will be the
major issue
Tackling the issue requires simultaneously
1. An overall population in good health2. A well educated population 3. Important domestic savings 4. Major investments in competitive activities
(manufacturing and services) geared towards international, regional and national markets
5. High standards of governance and credibility6. A demographic window of opportunityIn fact, most of what must be done is known, but in
many fields, effective implementation is either lacking, lagging behind or not sustained. There is
clear need to break with the past, and this requires a cultural change
-3,0 -2,5 -2,0 -1,5 -1,0 -0,5 0,0
10-14
20-24
70-74
60-64
30-34
0 0,5 1 1,5 2 2,5 3
0-4
80 +Ghana 2050 : 40 millions
10-14
20-24
70-74
50-54
60-64
40-44
30-34
80 +
Men Potentially
Active
Women Potentially
Active
< 20 years
65 years +
Population by five-year age group (million)
Benefits of action with TFR of 2.0 or less are:stabilized numbers of children & entries in the
LF, & favorable dependency ratio (65/100)
-3,0 -2,5 -2,0 -1,5 -1,0 -0,5 0,0
10-14
20-24
70-74
60-64
30-34
0 0,5 1 1,5 2 2,5 3
0-4
80 +
Ghana 2050: 52 millions
10-14
20-24
70-74
50-54
60-64
40-44
30-34
80 +
Men Potentially
Active
Women Potentially
Active
< 20 years
65 years +
Population by five-year age group (million)
Costs of inaction with of TFR of 3.0 or more:doubling numbers of children & entries in the LF, & unfavorable dependency ratio (86/100)
-3,0 -2,5 -2,0 -1,5 -1,0 -0,5 0,0
10-14
20-24
70-74
60-64
30-34
0 0,5 1 1,5 2 2,5 3
0-4
80 +
Ghana 2050: 40 or 52 millions
10-14
20-24
70-74
50-54
60-64
40-44
30-34
80 +
Men Potentially
Active
Women Potentially
Active
< 20 years
65 years +
Population by five-year age group (million)
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