EXPRESSIONS Opinion

IMPACT OF THE DEMOGRAPHIC DIVIDEND ON GHANA’S ECONOMY

Ghana is a tropical country located in Sub-Saharan Africa with an estimated population of 24.87 million made up of 51.2% females and 48.8% males. According to the 2010 Millennium Development Goals Report, The population growth rate is estimated at 2.1% and a life expectancy of 56 and 57 for males and females respectively. Ghana’s economic growth performance has been touted as one of the best in Sub-Saharan Africa. However, this growth performance has not reflected in the availability of productive and decent employment and eradication of income inequality in the country. There is the need to make the economic growth much more evenhanded for sustainable human development towards the attainment of a better Ghana.

Fortunately, the demographic dividend that comes with demographic transition is a very good opportunity that Ghana can capitalize on to make significant improvements in the country’s development. With the falling total fertility rate in Ghana, it can be established that the country is undergoing a demographic transition. According to the UNFPA, the lead UN agency for sexual reproductive health issues, a demographic transition occurs when a population shifts from high fertility and mortality rates to low fertility and mortality rates. When a country’s demography undergoes such a change, historically, a rapid economic growth opportunity opens for the country. The opportunity for accelerated economic growth is termed demographic dividend, which occurs when a country’s working age population grows larger than the non-working age population.

Ghana could reap significant benefits from its demographic transition, given the decline in the fertility rate from 3.99 to 3.28 in 2000 and 2010 respectively, also considering the ratio of the working age class to the dependent class (children and elderly).

AGE STRUCTURE OF GHANA’S POPULATION
Age Group Population Percentage
0-14 9932274 38.6
15-24 4829602 18.7
25-54 8708416 33.8
55-64 1233198 4.8
65+ 1054618 4.1

Source: 2010 Ghana Population & Housing Census

Working Age Population (15-64) = 14771216 (57%)

It is very clear that investments made in the youth (the majority of which fall within the working class) today can position Ghana to take advantage of the demographic dividend to make explosive improvement in the country’s social and economic development. To make better use of the demographic dividend, the Government must make the right investments and policies in the following three key areas:

Education

Education is an important factor in achieving significant social and economic development. It is one of the three variables used in calculating the Human Development Index. Education is the process of acquiring knowledge, skills, values and attitudes to fully develop individual capacities for societal wellbeing. Ghana’s effort in educating its populace is worth commending as the country’s net enrollment ratio in primary school increased from 45.2% in the 1990s to 89.3% in 2014, as stated in the Ghana Millennium Development Goals Report. This is definitely a great achievement but there is the need for the Government to repeat this achievement in the secondary and tertiary levels of education. According to the Ghana Statistical Service, the agency in charge of production and management of quality official statistics in Ghana, only 17.7% of the total population as at 2010 had attained a level of education above the basic education level. Also, people with no formal, or only basic, education, which has a negative impact on the economy, dominate the working population. Considering the industrial needs of the country, Governments need to invest in raising the quality of education in vocational and technological training in order to adequately build these skills for the youth, which will help them adapt to changing workforce needs, making them more productive and employable. Education for females needs to be highly encouraged since it contributes to the decline in the fertility rates, which will further reduce the ratio of the dependent class. The link between education and economic development is already certain and the Government needs to attach much importance to the education system and ensure its effectiveness and efficiency.

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Employment

One of the factors that need immediate attention is the availability of jobs. A country can only benefit from the demographic dividend if the majority of the people in the working class are being productive by working. Unfortunately, in Ghana, the unemployment rate over the past years has risen from 2.5% in 1984 to 5.3%, according to the 2010 Population & Housing Census, National Analytical Report. Currently, the unemployment rate could be higher considering the embargo placed on employment in the public sector by the Government. Among the unemployed Population, 45.6% were between the ages of 15-24, 42.0% were between 25-44, 9% were between 45-64 and 3.4% were 65 and above. From the above, it can be concluded that the unemployment rate is high among the youth who form the majority of the working class, and have the strength to work and make significant contributions to the growth of the country’s development. Not solving this abnormality means a greater number of unemployed people will grow into the elderly stage and depend on a comparatively smaller working class due to the declining total fertility rate. When this happens then Ghana would rather benefit negatively from the demographic dividend, which is meant to be a window of opportunity for accelerated economic growth. The Government, therefore, needs to encourage entrepreneurship among the youth by providing them with start-up capital and business development training sections. In addition, Government should develop policies that ensure the creation and availability of jobs for youth, especially those that graduate from the tertiary institutions every year.

Health

The health of the people needs to be considered vital for the economic growth of the country. The Government has to invest in the health sector to reduce the doctor-to-patient-ratio drastically. Education needs to be carried out on diseases, such as malaria, HIV/AIDS, Cholera, Meningitis, etc. that are claiming many lives and reducing the human resource of the country. The Government should also focus on the sexual reproductive health issues by developing policies and programs that reduce unwanted and teenage pregnancies, ensure spacing of births, and prevent the spread of sexually transmitted infections among adolescents. As discussed at the International Conference on Family Planning in 2013, removing barriers to family planning and reproductive health information, counseling services, and providing youth-friendly services that include free contraceptive methods or at a reduced cost are essential to preserving the health of the youth and increasing their productivity.

The extent to which Ghana can benefit from its youth and reap the full rewards of the demographic dividend depends greatly on the favorable policies that are implemented towards the development of the youth in the areas of education, employment, and health. Successful implementation of these favorable policies will shift Ghana’s Economy from an uneven state to a more steady and promising state. The Government must treat this demographic dividend issue with all urgency since the opportunity will not last forever, and allowing it pass on without utilizing it will have a negative impact on the already troubled economy of our dear country.

Author: Jacob Amengor, threesixtyGh Writer

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