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Prospects for Economic Growth in Nigeria: A Demographic Perspective Nigeria: The Next Generation First Meeting of the Task Force Abuja, Nigeria December.

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Presentation on theme: "Prospects for Economic Growth in Nigeria: A Demographic Perspective Nigeria: The Next Generation First Meeting of the Task Force Abuja, Nigeria December."— Presentation transcript:

1 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 Structure of the presentation Salient facts describing Nigeria’s economy and population The demographic dividend: theory and evidence Is there a demographic dividend in Nigeria’s future?

3 Salient facts describing Nigeria’s economy and population

4 Nigeria’s economy has stagnated: No growth in income per capita Source: World Development Indicators, 2008

5 Indonesia and Pakistan have seen economic growth Source: World Development Indicators, 2008

6 Nigeria’s economy compared with world regions Source: World Development Indicators, 2008

7 Comparing economic growth rates Source: World Development Indicators, 2008 average annual growth rate of GDP/capita (PPP),

8 Nigeria’s population has grown rapidly Source: UN, World Population Prospects, 2008

9 Nigeria’s fertility rate has started to fall Source: UN, World Population Prospects, 2008

10 The infant mortality rate has fallen, but not steadily Source: UN, World Population Prospects, 2008

11 Life expectancy has risen, but not steadily Source: UN, World Population Prospects, 2008

12 Crude birth and death rates are falling Source: UN, World Population Prospects, 2008

13 Population growth has been rapid Source: UN, World Population Prospects, 2008

14 The ratio of working-age to non-working- age people has been pretty steady Source: UN, World Population Prospects, 2008

15 Changing age structure, : A 3-dimensional view Source: UN, World Population Prospects 2008

16 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 have no formal schooling. 50% of Christians have secondary or higher education. Rural residents and those in the North have lower educational attainment.

17 Employment Unemployment is well above 20%, except for those over age 35. Unemployment doesn’t vary much by rural/urban residence. It is highest among those with a secondary education (48%). –This group seems likely to be underemployed. Women’s labor force participation lags far behind men’s.

18 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 folkloric contraceptive methods have much higher fertility. There is significant unmet need for contraception.

19 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 What we’ve 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 The demographic dividend: Theory and evidence

22 Average annual growth rate of GDP per capita, Source: World Bank, World Development Indicators 2008

23 Changing age structure, Source: UN, World Population Prospects

24 Population growth rate time Death rate Birth rate The Demographic Transition

25 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 is attributable to the independent influence of changes in age structure. Income

26 Reaping the demographic dividend is not automatic, and may not be permanent Demography is not destiny – it just creates potential –for economic growth and poverty reduction –and also, for social, political, and economic instability March of the Silver-Haired Generation

27 Complementary policies Need to catalyze demographic transition Need to accelerate demographic transition – esp. fertility decline Need compatible policies in other areas –education –health –labor market –trade –governance –macroeconomic management Need good relationships with other countries

28 Is there a demographic dividend in Nigeria’s future?

29 Nigeria’s population is set to soar Source: UN, World Population Prospects, 2008

30 The fertility rate is expected to continue falling Source: UN, World Population Prospects, 2008

31 The infant mortality rate is projected to continue falling Source: UN, World Population Prospects, 2008

32 Life expectancy will continue to rise Source: UN, World Population Prospects, 2008

33 Crude birth and death rates will continue to fall Source: UN, World Population Prospects, 2008

34 Population growth rate will decline substantially Source: UN, World Population Prospects, 2008

35 The ratio of working-age to non-working-age people is set to increase dramatically Source: UN, World Population Prospects, 2008

36 Growth of the working-age to non-working-age ratio, ( under 3 UN fertility scenarios) Source: UN, World Population Prospects 2008

37 The bottom line: demographic change can lead to economic growth

38 Comparing the growth rates of the working-age and non-working-age population Source: UN, World Population Prospects, 2008

39 Changing age structure, : Nigeria compared with Indonesia and Pakistan Source: UN, World Population Prospects 2008

40 Changing age structure, : Nigeria compared with East Asia Source: UN, World Population Prospects 2008

41 The size of the 60+ population will increase dramatically Source: UN, World Population Prospects, 2008

42 Reaping the demographic dividend: cautionary points regarding Nigeria Not all of the general points about the factors needed to realize the demographic dividend necessarily apply to Nigeria. In particular: –Trade policy is important, but it may be more important to focus on diversification of the economy away from dependence on oil exports. –Minimum wage laws and unions may affect only a small portion of Nigeria’s labor market.

43 Take-home messages Demography matters. Demography matters a lot. There is potentially a sizeable demographic dividend in Nigeria’s future. But, will Nigeria collect this dividend?


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