All's well that grows well?

Why economic growth alone cannot solve Africa's demographic challenges

Alisa Kaps, Daniel Hegemann, Catherina Hinz

Until recently, Africa’s economies had been growing consistently. Between 2000 and 2018, African gross domestic product increased by more than four percent per year on average, only surpassed by countries in South and East Asia. However, high economic growth over the last two decades has not been sufficient to keep up with population growth on the continent. Moreover, economic growth has barely translated into the socio-economic progress needed to offer young generations better opportunities and thereby reduce long-term population growth. This discussion paper highlights the main reasons for this and highlights economic opportunities that are likely to arise for Africa if fertility rates decline and a change of the population 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.

Focus Areas: Demographic dividend, International population policies
published: 9th December 2020

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Selected Figures

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 base. While many industrialised countries and an increasing number of emerging economies have seen low GDP growth rates, Africa has helped to keep the global economic engine running. However, Africa's economic growth has not been sufficient to provide for its steadily growing population. © Berlin-Institut

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 gross domestic product per capita shows that little of the wealth generated on the continent remains for each individual: 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

The demographic transition is progressing much more slowly in Africa than previously in other world regions. This is delaying the change in the age structure associated which has opened up new economic opportunities for countries in other regions. When birth cohorts become smaller due to lower fertility rates, the population shifts towards young people of working age who have few children and elderly realtives to provide for. Under good conditions, this surplus of people of working age can be transformed into an economic upswing – a demographic dividend. © Berlin-Institut