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All's well that grows well?

Why economic growth alone cannot solve Africa's demographic challenges

Alisa Kaps, Daniel Hegemann, Catherina Hinz
Cover: All's well that grows well? Open image in Lightbox

© Berlin-Institut

Until recently, the African continent has been on a course of economic growth. Between 2000 and 2018 the African countries grew on average by more than four percent annually. Worldwide, the average growth rates of gross domestic product in Africa during this period were exceeded only in South and East Asia. However, high economic growth in the last two decades has not been sufficient to keep up with the high population growth on the continent. What is more, the economic upward trend has hardly translated into actual socio-economic progress that would be necessary to offer future prospects for younger generations and thus in the long term slow down population growth. This policy paper highlights the main reasons behind these issues and what economic opportunities are likely to arise for Africa if fertility rates decline and a change of age structure sets in.

The Berlin Institute would like to thank the Federal Foreign Office for funding the project. The Berlin Institute is solely responsible for the content of the study.

Themes: Focus on Africa, Demographic dividend, International population policies
published: 9th December 2020
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Selected Figures

Average annual growth rates of GDP in percent
As latecomers in terms of socio-economic development, many African countries have experienced comparatively high economic growth over the past 20 years – albeit mostly starting from a low level. While many industrialized countries and an increasing number of emerging economies have seen only low GDP growth rates, Africa has helped to keep the global economic engine running. However, Africa's economic growth has not been sufficient to adequately provide for the steadily growing number of inhabitants.© Berlin-Institut
Per capita income and average growth rate of GDP per capita
According to common economic theory, economic growth brings more prosperity for all. In Africa, however, this does not seem to be the case, or only to a limited extent. A look at the gross domestic product per capita shows that little of the wealth generated on the continent remains for each individual: The GDP per capita is on average only around 4,000 US dollars in sub-Saharan Africa, far below the global average of just under 18,000 US dollars. However, the regional differences on the continent are considerable. While Burundi has a GDP per capita of only 780 US dollars, it is 30,000 US dollars per person in the Seychelles.© Berlin-Institut
Schematic representation of the development of birth and death rates as well as total population in absence of migration
The demographic transition in Africa is progressing much more slowly than it did before in other regions of the world. This is delaying the change in the age structure which is always associated with this demographic transformation process and which has opened up new economic opportunities for states in other regions. When birth cohorts become smaller due to lower fertility rates, the gravity centre of the population shifts towards the young people of working age, who have few children and elderly to provide for. Under good framework conditions, this surplus of people of working age can be transformed into an economic upswing – into a demographic dividend.© Berlin-Institut

Contacts

Daniel Hegemann

Research Associate

Telefon: +49 30 - 31 01 68 35

Contact via Mail:hegemann@berlin-institut.org

Daniel Hegemann wissenschaftlicher Mitarbeiter

© Berlin-Institut

Catherina Hinz

Managing Director

Telefon: +49 30 - 22 32 48 45

Contact via Mail:hinz@berlin-institut.org

Catherina Hinz geschäftsführende Direktorin

© Berlin-Institut

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