Investing in Africa's Rise
By Svati PazhyanurPublished March 17, 2014By Svati Pazhyanur, 3/17/14
Over the past few years, "Africa's Rise" has been touted as a global economic success story paralleling the rise of China, India, and Brazil. For all of these countries, much of their growth is founded on their demographic dividend, which refers to a period of economic growth caused by decreases in fertility rates and a subsequent decrease in the ratio of dependents (young and old) to working-age adults. This has the potential to raise output and savings per capita, representing a golden opportunity for many developing countries. In the 1960's, many East Asian, Latin American, and African countries had fertility rates (or expected number of children) of 5.5-7.5. Now, countries like Brazil and China have seen these rates fall steadily to 1.5-3 children per women, while African countries have seen uneven — and sometimes even a lack of — progress.
The majority of Africa continues to see a rapid increase in population levels, the growth of cities to the point that they are unmanageable, and an oncoming "youth bulge" that, if not employed, can lead to increased crime rates and a deteriorating rule of law in unstable governments. From 1950 to 2010, 27 out of 40 countries in Africa have seen their fertility rates remain unchanged at 5.1-6.0 children per woman on average. As of 2012, 78% of Africa's people live in countries where the transition to low fertility and low mortality (characteristic of the rest of the world) is nowhere near finished.
This delayed transition brings Africa's story of sustained economic growth into question. While employment and incomes have been rising in the majority of Africa, manufacturing and private investment have barely changed, and African growth still depends heavily on commodity exports to China, where demand for raw materials is slowing. Without a substantial increased focus on the health of African countries, including family planning and improving contraception access, this growth will be short lived.
Over 60% of women of childbearing age use modern contraceptive methods in South Korea, Mexico, and Bangladesh. In most of sub-Saharan Africa, the rate is below 20%. On average, contraceptive prevalence has increased by approximately 0.5 percentage points per year over the last 20 years. While some of Africa's high fertility can be traced to cultural norms or rural demand, it is also a result of barriers to contraceptive access. Until recently, some governments, such as Uganda's, even discouraged family planning, though that is changing on the whole.
Family planning is one of the most cost-effective ways to invest in Africa's growth. It would cost about $1.5 billion a year to provide modern contraceptives to all African women aged 15-49 who do not get them. Rather than placing the "blame" for high fertility rates on cultural norms or weak rural demand, countries would be best served by improving access to family planning and information dispersion about its health and economic benefits, especially for women. Africa has an enormous opportunity to harness its demographic dividend and truly live up to its prophesized rise — and the policies that can get it there are well within reach.