IMF: Sub-Saharan Africa Won't Economically Grow Its Way Out of Its Overpopulation Crisis
April 12, 2017, 06:47 PM
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Sub-Saharan Africa has been doing fairly well in this century economically due largely to high Chinese demand for raw materials, plus a little development in traditional starter industries like textiles. (It’s not uncommon for my shirts these days to come from sub-Saharan Africa).

But a new International Monetary Fund paper argues that sub-Saharan African is unlikely to follow the development progress of even southeastern Asian countries like Vietnam, Laos, and Bangladesh due to … well … too many babies.

From the IMF:

Structural Transformation in Employment and Productivity: What Can Africa Hope For?

Louise Fox, Alun Thomas, and Cleary Haines

April 7, 2017

… Sub-Saharan Africa’s demographic trends are also different; fertility is higher and the demographic transition is happening much more slowly. Between 2000 and 2010 the labor force grew at a rate of only 1.2 percent per annum in east Asia and 1.7 percent per annum in south Asia, but 2.6 percent per annum in sub-Saharan Africa. The median age in sub-Saharan Africa is 18— seven years younger than the median age in south Asia, which is the next youngest region (Figure 3). These population trends suggest that the number of youth entering Africa’s working-age population will be rising for years to come. Between 2005 and 2020 the working-age population is projected to increase by over 200 million people, continuing the trend of the past decade. This trend is not expected to decline soon because a rapid, systematic reduction in fertility rates has yet to occur in sub-Saharan Africa.

In the 1970s the fertility rate in Asia and Latin America was identical to the rate in Africa today, but Africa’s fertility rate is falling much more slowly than in those regions at that time (Filmer and Fox 2014). …

The lack of jobs in export-oriented manufacturing is not the only factor setting Africa apart. As discussed, a sluggish demographic transition means that the labor force is growing much faster in Africa than in Asia or Latin America. This lack of demographic transition complicates the employment transformation, because even with non-agricultural, modern private sector enterprise growth as rapid and labor intensive as occurred in the past 20 years in east Asia, a similar employment transition could not occur in sub-Saharan Africa. The enterprises would not be able to absorb the same share of the labor force because the labor force would be too big.

For example, because Vietnam’s labor force grew at only two-thirds of the pace of Senegal’s over the past decade (2.1 versus 3.1 percent per annum), every dollar invested in creating labor-intensive manufacturing jobs will have a stronger effect on the structure of employment (measured as a share of the labor force) in Vietnam than in Senegal. In other words, Senegal needs 50 percent more investment in manufacturing than Vietnam needed just to bring its share of employment in industry to the level of Vietnam.

And, be honest, would you feel more optimistic investing $3 in Senegal or $2 in Vietnam?
The analysis shows that a major, and often underappreciated, factor behind the slow employment transformation in sub-Saharan Africa compared with the Asian benchmarks was demographics—a labor force growing much faster in sub-Saharan Africa.
Until very, very recently, economists used the word “demographics” as a talisman: Chad had good demographics because it has lots of children entering the labor force years, Switzerland has bad demographics for the opposite reason.

Now they are starting to admit that sub-Saharan Africa’s continued high fertility rate is … problematic.

Of all the problems facing the future of the planet, Sub-Saharan African population growth is probably has the highest ratio of Size of Problem relative to Times Mentioned. The UN’s 2015 population projections estimated that SSA would grow from a half billion people in 1990 to 4 billion in 2100. (Compare the Times Mentioned to, say, Climate Change.)

That’s a huge problem, but it’s not an insoluble problem. Almost all of the rest of the world has managed to get its fertility under control, but the rest of the world has largely stopped encouraging black Africans to do the same out of fear of being seen as racist.

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