A nation’s working-age population begins to decline when it experiences a demographic shift brought on by aging populations and falling birth rates. Some countries such as South Korea already have an alarmingly low fertility rate, with a population decline expected in the coming years, while some countries such as Japan, boast an older demographic. This, however, is contrary to the case in Sub-Saharan Africa, which boasts the youngest population in the world.
Africa not only has a youthful population, but it also on average, as a continent has the world’s largest fertility rate.
According to the World Economic Outlook report by the International Monetary Fund, titled “Steady But Slow: Resilience Amid Divergence”, around the time of the global financial crisis, several significant economies, including those in Canada, China, the United Kingdom, and the United States, saw a turning point in their demographic trend.
The report notes that around 92% of the world economy has seen a decline in working-age population growth (ages 15 to 64) since 2008, and 44% has seen a negative trend.
However, low-income nations continue to benefit from the demographic dividend, and most advanced and emerging market economies are experiencing a demographic downturn.
As a result, Africa is poised to supply a significant portion of the world’s labor force moving forward, as the IMF estimates that almost 2 out of every worker in the world will either be from Africa or India.
“These demographic shifts have a direct bearing on global labor supply. Countries with a current demographic dividend could help support growth in the global workforce, in which nearly two in every three new entrants over the medium term will come from India and sub-Saharan Africa.” the report reads.
“First, aggregate labor force participation rates declined somewhat significantly between 2008 and 2021 in most world regions, except Advanced Asia and the Pacific, the Middle East and North Africa, Europe, and Canada,” the report adds.
While these trends were already apparent before 2019, the COVID-19 pandemic made the decline in participation more severe, particularly in emerging economies. The first shock of the outbreak caused a significant decline in participation rates throughout 2019 and 2020, particularly in Latin America and China, but they began to rise again in 2021.
Business Insider
