1. 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

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),
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: Demographics: 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
Population growth 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 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. But, will Nigeria collect this dividend?
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?