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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 4-5, 2009. Structure of the presentation. Salient facts describing Nigeria’s economy and population

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  1. Prospects for Economic Growth in Nigeria:A Demographic PerspectiveNigeria: The Next GenerationFirst Meeting of the Task ForceAbuja, NigeriaDecember 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 average annual growth rate of GDP/capita (PPP), 1980 - 2006 Source: World Development Indicators, 2008

  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, 1950-2010: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, 1975-2005 Source: World Bank, World Development Indicators 2008

  23. Changing age structure, 1960-2005 Source: UN, World Population Prospects

  24. The Demographic Transition Populationgrowth rate Birth rate Death rate time

  25. Population age structure is a robust and powerful predictor of economic growth Demographics Income One third (about 2 percentage points) of the growth of income per capita in East Asia during 1965-90 is attributable to the independent influence of changes in age structure.

  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, 1960-2050 (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, 1960-2050:Nigeria compared with Indonesia and Pakistan Source: UN, World Population Prospects 2008

  40. Changing age structure, 1960-2050: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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