Africa's Demographic Boom Is The Continent's Greatest Resource
The futility of neo-Malthusian fear
According to some experts, African population growth will be an obstacle to the continent's economic development. Former Nigerian President Goodluck Jonathan said during the Dialogue of Civilizations Research Institute think tank forum in Oct. 2017 that "If we do not reduce the size of our families, our country will continue to suffer from poverty because the available resources will no longer be able to meet our needs." This reasoning is a fallacy — the fallacy of the fixed pie.
The wealth of the continent is not fixed. It is a false idea to assume that as the population grows, the share of each individual diminishes. In fact, the "pie" itself will expand based on the number of people. We have a reference point in history: it would be highly inaccurate to consider that the population growth in Europe during the 20th century, often referred to as the baby boom, had a depressing influence on Europe's economic development.
It is an immense reservoir of long-term capital for financing the real economy.
And the probability of having great thinkers and inventors actually increases as the population grows. Hence, the following thesis arises: with widespread education of children, African demographics will be an asset for the continent's development. Innovation is directly linked to the size of the population. This reminds us of the insightful statement from philosopher Jean Bodin: "There is no wealth except for men."
Ultimately, economic growth rests on two pillars: demographics and productivity. Here, the structure of the African population is an undeniable asset: it consists predominantly of young people, with a median age of about 19 years.
This is an opportunity for pension funds, as they could accumulate the savings of these individuals for the next 40 years without the pressure of payments observed in developed economies with an aging population. It is an immense reservoir of long-term capital for financing the real economy, particularly infrastructure and housing.
Matatu are privately owned minibuses that serve as the most popular public transport in Nairobi, Kenya.
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Family solidarity
Since the early 2000s, several African countries have initiated a contraceptive revolution to reduce the fertility rates among Sub-Saharan populations. The rate of contraceptive use is estimated to be 26% in Sub-Saharan Africa, compared to an average of 75% in wealthy countries.
Religion and culture are often cited as reasons for the low contraceptive rates. Additionally, contraceptives are regularly out of stock in medical centers, which are often located hundreds of kilometers away from households, discouraging some women who are otherwise eager to follow a contraceptive program.
It is now widely acknowledged that the near-absence of health insurance, old-age pensions and unemployment benefits, coupled with low incomes and limited savings capacity, leads Africans to rely on family solidarity. Therefore, from an economic perspective, it is perfectly rational for Sub-Saharan households to have high fertility rates.
Ultimately, fertility rates tend to decline in economically developed countries, a reminder of history's universal lesson: the best contraceptive method is economic development.
