1. Economic Development in Nigeria: A Demographic Perspective Committee on African Studies Harvard Africa Seminar, Economic Development in Nigeria: A Demographic Perspective Committee on African Studies Harvard Africa Seminar, April 13, 2010 David E. Bloom and Salal Humair Department of Global Health and Population, HSPH

3. Nigeria’s economy has stagnated: No growth in income per capita Source: World Development Indicators 2008

4. Indonesia and Pakistan have seen economic growth Source: World Development Indicators 2008

5. Nigeria’s economy compared with world regions Source: World Development Indicators 2008

6. Comparing economic growth rates average annual growth rate of GDP/capita (PPP), 1980 - 2006 Source: World Development Indicators 2008

7. Nigeria’s fertility rate has started to fall Source: UN, World Population Prospects, 2008

8. The infant mortality rate has fallen, but not steadily Source: UN, World Population Prospects, 2008

9. Life expectancy has risen, but not steadily Source: UN, World Population Prospects, 2008

10. Crude birth and death rates are falling Source: UN, World Population Prospects, 2008

11. Population growth has been rapid Source: UN, World Population Prospects, 2008

12. The ratio of working-age to non-working- age people has been pretty steady Source: UN, World Population Prospects, 2008

13. Changing Age Structure, 1950-2010: A 3-dimensional view Source: UN, World Population Prospects 2008

14. Average annual growth rate of GDP per capita, 1975-2005 Source: World Development Indicators 2008

15. Changing age structure, 1960-2005 Source: UN, World Population Prospects 2008

16. Population growth rate time Death rate Birth rate The demographic transition

17. Population age structure is a robust and powerful predictor of economic growth Demographic s 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. Income

18. Nigeria’s population is set to soar Source: UN, World Population Prospects, 2008

19. The fertility rate is expected to continue falling Source: UN, World Population Prospects, 2008

20. The infant mortality rate is projected to continue falling Source: UN, World Population Prospects, 2008

21. Life expectancy will continue to rise Source: UN, World Population Prospects, 2008

22. Crude birth and death rates will continue to fall Source: UN, World Population Prospects, 2008

23. Population growth rate will decline substantially Source: UN, World Population Prospects, 2008

24. The ratio of working-age to non-working- age people is set to increase dramatically Source: UN, World Population Prospects, 2008

25. Growth of the working-age to non-working-age ratio, 1960-2050 ( under 3 UN fertility scenarios) Source: UN, World Population Prospects, 2008

26. Comparing the growth rates of the working-age and non-working-age population Source: UN, World Population Prospects, 2008

27. Changing Age Structure, 1950-2050: A longer 3-dimensional view of Nigeria’s trajectory Source: UN, World Population Prospects, 2008

28. 1950

29. Source: UN, World Population Prospects, 2008 1960

30. Source: UN, World Population Prospects, 2008 1970

31. Source: UN, World Population Prospects, 2008 1980

32. Source: UN, World Population Prospects, 2008 1990

33. Source: UN, World Population Prospects, 2008 2000

34. Source: UN, World Population Prospects, 2008 2010

35. Source: UN, World Population Prospects, 2008 2020

36. Source: UN, World Population Prospects, 2008 2030

37. Source: UN, World Population Prospects, 2008 2040

38. Source: UN, World Population Prospects, 2008 2050

39. Changing Age Structure, 1960-2050: Nigeria compared with East Asia Source: UN, World Population Prospects, 2008

40. Changing Age Structure, 1960-2050: Nigeria compared with Indonesia and Pakistan Source: UN, World Population Prospects, 2008

41. Reaping the demographic dividend is not automatic, and may not be permanent Demography is not destiny – it just creates potential 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 March of the “silver hair” generation Inequality within Nigeria

42. The elderly will make up a larger share of the population Source: UN, World Population Prospects, 2008

43. Will demographic heterogeneity induce economic inequality and political instability?

44. Source: Population and Housing Census, National Population Commission, Nigeria, 1991 and 2006 Ratio, working-age to non-working-age population, by state

45. Take-home messages so far Demography can matter for the pace of economic development. It can matter a lot. There is potentially a sizeable demographic dividend in Nigeria’s future.

46. Estimates of the potential size and impact of Nigeria’s demographic dividend The 2030 economy can be 3 times larger than in 2010, instead of 2 times. The average Nigerian can enjoy an additional 30% income in 2030. Over 30 million additional people can be lifted out of poverty Source: Bloom et al. 2010. Nigeria’s demographic dividend. Background paper for the NGN project

47. Central questions How do we know how much demographic dividend Nigeria can expect? What challenges and opportunities does Nigeria face in trying to collect that dividend? What are some recommendations for the Nigerian government and civil society?

48. One major challenge in estimating the demographic dividend Source: Holly Reed, 2010. Capitalizing on Nigeria’s Demographic Dividend. Background paper for the NGN project Lack of data Dubious data quality Access to data difficult for academics outside Nigeria Few peer reviewed studies on Nigeria compared to similar sized countries like Bangladesh or Indonesia

49. Demographic data is also a big political issue Source: http://news.bbc.co.uk/2/hi/africa/4512240.stm

50. How much demographic dividend can Nigeria expect? Assembled panel data for 1965-2005 from World Development Indicators, Penn World Tables, Barro and Lee, Freedom House Estimated cross-country growth models using demographic and other variables Geographical (tropical location, landlockedness) Human development (education, health) Institutional quality (ICRG, SW, Trade openness) Projected economic growth to 2030 Source: Bloom et al. 2010. Nigeria’s demographic dividend. Background paper for the NGN project

51. Potential impact of demographic dividend on per capita income Source: Bloom et al. 2010. Nigeria’s demographic dividend. Background paper for the NGN project

52. YearGDPpC "business- as-usual" GDPpC with DD & added LE GDPpC improved IQ & LE 2010$2,070 2015$2,521$2,653$2,664 2020$3,070$3,435$3,461 2025$3,738$4,486$4,535 2030$4,553$5,882$5,966 Potential impact on per capita income with institutional and health improvements Source:Source: Bloom et al. 2010. Nigeria’s demographic dividend. Background paper for the NGN project

53. Potential impact of the demographic dividend on poverty Source:Source: Bloom et al. 2010. Nigeria’s demographic dividend. Background paper for the NGN project Year# lifted out of poverty with DD and added LE # lifted out of poverty with improved IQ & LE 2010 - - 2020 5.8 million 2030 31.8 million 34 million

54. What are the challenges and opportunities in collecting the demographic dividend? Jobs creation Education Health – infant/child mortality, maternal health, unmet need for family planning

55. YearWA popUnempl- oyment Jobs neededBetween years Jobs to be added 2010 85,525,40120% 52,358,719 2015 97,731,22315% 63,570,5792010-15 11,211,860 2020 111,088,85010% 76,509,7682015-20 12,939,189 2025 125,325,5138% 88,233,0362020-25 11,723,268 2030 140,036,2127% 99,661,4522025-30 11,428,415 Nigeria will need lots of jobs Source: Author calculations.

56. But jobs will also need to be productive: Nigeria’s economic lifecycle - individual Source: Mason et al. 2010. Population and economic progress in Nigeria. Background paper for the NGN project

57. Education will be key in making jobs productive: economic lifecycle - aggregate Source: Mason et al. 2010. Population and economic progress in Nigeria. Background paper for the NGN project Needs of children Labor surplus

58. And results can be achieved with little: Nigeria’s current education expenditures Source: Mason et al. 2010. Population and economic progress in Nigeria. Background paper for the NGN project

59. Nigeria’s education and health spending Source: Mason et al. 2010. Population and economic progress in Nigeria. Background paper for the NGN project. Actual ($)% of spending Education, Public 1427.33 Education, Private 92247.63 Health, public 392.01 Health, private 83343.04 Total 1,936100 Total Public 1819.33 Total Private 1,75590.67 Per capita spending (2004 $s)

60. Nigeria’s human capital investment compared to other countries Source: Nigeria: The Next GenerationTask Force secretariat, 2010.

61. Low health spending reflected in low level of maternal health Source: Nigeria 2008 demographic and health survey: key findings.

62. Low health spending reflected in high levels of child mortality Source: Nigeria 2008 demographic and health survey: key findings.

63. Low health spending reflected in low level of children vaccination coverage Source: Nigeria 2008 demographic and health survey: key findings.

64. Low health spending reflected in high level of unmet need for family planning Source: Unpublished background memo for the NGN project.

65. Unmet need in the context of current fertility Source: Nigeria 2008 demographic and health survey: key findings.

66. Nigeria’s untapped human capital: the diaspora Source: US Department of Homeland Security, Office of Immigration Statistics, 2008 Yearbook of Immigration Statistics. Number of persons obtaining legal permanent residents who were born in Nigeria, fiscal years 1961-2008

67. The Nigerian US diaspora is well-educated Source: Nigerian-born Population in the United States, unpublished background memo, NGN project

68. And the diaspora is a significant resource Source: The World Bank. Migration remittances factbook 2008. Updated Nigeria data from personal communication.

69. Summary of challenges and opportunities in collecting the demographic dividend Jobs The number needed … Low productivity … Education: Very low public investment … but quick gains … Low quality schooling … Health Very low public investment … but quick gains … Lower fertility can lessen pressure on services …

70. Other challenges and opportunities we have not touched on Institutional improvements, governance Infrastructure improvements Politics, conflict and youth exploitation Youth attitudes Regional disparities and cultural differences Macro-economics and international relations

71. Take home messages Nigeria’s demographic dividend opportunity is very significant - and can be crucial to Nigeria’s 2020 vision The demographic dividend could have a major impact on poverty in Nigeria Nigeria has several challenges to realizing the dividend, but many of these are also opportunities for quick gains

72. 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: –The development of well-functioning financial markets, as important as it is, may not be as high a priority for Nigeria as elsewhere. –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.

73. Backup slides

74. Estimation results Source: Bloom et al. 2010. Nigeria’s demographic dividend. Background paper for the NGN project