Africa is poised on the edge of a potential takeoff to sustained economic growth. This takeoff can be abetted by a demographic dividend from the changes in population age structure. Declines in
child mortality, followed by declines in fertility, produce a ’bulge’ generation and a large number of working age people, giving a boost to the economy. In the short run lower fertility leads
to lower youth dependency rates and greater female labor force participation outside the home. Smaller family sizes also mean more resources to invest in the health and education per child
boosting worker productivity. In the long run increased life spans from health improvements mean that this large, high-earning cohort will also want to save for retirement, creating higher
savings and investments, leading to further productivity gains. Two things are required for the demographic dividend to generate an African economic takeoff. The first is to speed up the
fertility decline that is currently slow or stalled in many countries. The second is economic policies that take advantage of the opportunity offered by demography. While demographic change can
produce more, and high quality, workers, this potential workforce needs to be productively employed if Africa is to reap the dividend. However, once underway, the relationship between
demographic change and human development works in both directions, creating a virtuous cycle that can accelerate fertility decline, social development, and economic growth. Empirical evidence
points to three key factors for speeding the fertility transition: child health, female education, and women’s empowerment, particularly through access to family planning. Harnessing the
dividend requires job creation for the large youth cohorts entering working age, and encouraging foreign investment until domestic savings and investment increase. The appropriate mix of
policies in each country depends on their stage of the demographic transition.
