(Ecofin Agency) - The report recommends that international institutions like the UNFPA and the World Bank highlight the positive outcomes of fertility control for household welfare as a key driver for promoting family planning, rather than solely focusing on the argument of accelerated economic growth.

Households in sub-Saharan Africa have witnessed a rise in their wealth and a drastic drop in infant mortality, accompanied by a better education level for children from small-sized families, according to a report issued on September 20 by the publisher of open-access scientific journals, MDPI. This reality is attributed, the report later states, to the demographic dividend, which is much more perceptible at the microeconomic level rather than the macroeconomic one.

This indicator refers to the economic benefit a country could gain from a specific demographic transition, a period when the dependent population (those under 14 and over 65 years old) is smaller than the working-age or non-dependent population (those aged 15 to 64). With fewer annual births, the working-age population gradually grows relative to the dependent population. Such demographic changes can potentially lead to accelerated economic growth through increased production, consumption, investment, and savings, as stated in the "Where Are the Demographic Dividends in Sub-Saharan Africa?" report.

The term “demographic dividend” was coined about half a century ago and gained prominence in the early 2000s when it was used by international organizations like the United Nations Population Fund (UNFPA) and the World Bank to promote family planning in the African continent.

These organizations conveyed the idea that lower fertility rates would result in a reduction of the dependent population and an increase in the non-dependent population. And this evolution would ultimately lead to higher economic growth, just as a financial investment generates a yield.

Lack of statistical evidence

The report, authored by Michel Garenne, a professor at the Department of Statistics and Demographic Studies at the University of Western Cape and a researcher at the Institute for Research for Development (France), highlights that the key parameter in this relationship is the "dependency ratio," which is the ratio between the dependent/non-active population (consumers only) and the active population (producers and consumers). The lower the dependency ratio, the higher the expected economic advantage (more producers per consumer).

In SSA, where fertility rates have been declining in all countries since the 1950s, the average dependency ratio stood at 0.80 between 2015 and 2019, compared to a global average of 0.53.

Significant variations have been observed among countries in the region during the same period, with dependency ratios ranging from 0.40 in Mauritius (the country with the lowest fertility rate) to 1.15 in Niger (the country with the highest fertility rate).

At the national level, the links between the dependency ratio and economic growth are complex and can go in opposite directions, ranging from strongly negative to strongly positive during the period from 1950 to 2019. For example, the correlation coefficients between dependency ratios and economic growth rates over 5-year periods from 1950 to 2019 varied from -0.796 in Tanzania to +0.698 in Botswana.

The report concludes that the dynamics of the dependency ratio and economic growth over the period 1950-2019 in SSA appear largely statistically independent. Even when they appear correlated, it is often due to simultaneous occurrences of other factors such as fluctuations in commodity prices or foreign investments.

In Africa more than anywhere else, the impact of the demographic dividend on economic growth does not appear to be measurable, as economic growth is driven primarily by other factors.

Noticeable improvement in household well-being

The components of economic growth are complex, involving not only national-level savings and investments but also various other measurable factors such as foreign investments, remittances, exports of natural resources (oil, gas, minerals), international aid, as well as immeasurable components like innovation, governance, and the efficiency of the banking system. Consequently, the correlation between declining fertility rates and economic growth appears to be overshadowed by numerous other economic growth factors. Proving or measuring the effect of the demographic dividend is a very challenging task as it would require taking into account all these economic growth factors. It seems impossible to do. However, it should be noted that a lower dependency ratio should have positive effects on economic growth, even if they cannot be measured with accuracy.

The report does emphasize, though, that the demographic dividend is highly measurable at the microeconomic level, within households in sub-Saharan Africa. At this level, a decrease in fertility leads to a transformation in household structure, characterized by fewer children to provide for. This transition signifies a shift from emphasizing quantity (the number of children) to prioritizing quality, which translates into improved healthcare and education. Consequently, households tend to make more substantial investments in their children, ultimately culminating in increased long-term wealth. This positive aspect has been confirmed by demographic and health surveys conducted in 39 sub-Saharan African countries. The surveys categorized samples of fertile women aged 40 to 49 into five categories: low fertility (1-3 children), medium fertility (4-6), high fertility (7-9), very high fertility (10-12), and exceptionally high fertility (13-15). They found higher household wealth, reduced infant mortality, and increased education levels among adolescents aged 15 to 19 in families with lower fertility rates. Therefore, the report recommends using the proven positive impacts of lower fertility on household well-being as a compelling argument to promote family planning in sub-Saharan Africa, instead of solely focusing on the acceleration of economic growth.